Rebecca Minkoff recently made it possible for customers to rent clothing without a subscription.
Source: Rebecca Minkoff
To get more customers, some clothing brands are starting to rent their clothes – without a monthly subscription.
Fashion designer Rebecca Minkoff was recently the first to offer a “loan option” on its website, powered by the rental technology platform CaaStle. Customers can wear the item as often as they want during the rental period and have the option of buying it at an adjusted price.
Subscriptions, on the other hand, usually have a fixed monthly fee for a certain number of items at the retailer. While some brands have subscriptions just for their clothing, companies like Rent the Runway and Stitch Fix offer a variety of designers.
“In reality, how many different subscription services will you be on?” Minkoff recently told CNBC.
“It will be untenable.”
Zoom In Icon Arrows pointing outwards
Product sold on the RebeccaMinkoff.com website.
RebeccaMinkoff.com
Retailer Vince will be introducing the “Borrow” button for men’s and women’s clothing on July 13, and designer brand Rebecca Taylor is expected to introduce the service for their women’s clothing later this summer. Both already have subscription programs.
“We envision the ‘Borrow’ button to be ubiquitous with anyone selling clothing,” said Christine Hunsicker, founder and CEO of CaaStle, which also provides rental-based subscription services for Banana Republic, Express and Destination Maternity.
“You can expand your consumer reach,” said Hunsicker.
Hunsicker said she expects larger brands to offer subscriptions in addition to one-time rentals, while smaller businesses could just stick with the rental.
“When you think about the percentage of the population that can afford $ 300 or $ 400 overalls, you’re really talking about the top 1%,” Hunsicker said.
For Minkoff, it’s an opportunity to get new customers to try the brand, or even existing customers to delve a little deeper. Her dresses typically cost between $ 98 and $ 378.
“It was an opportunity to meet our women where their wallet is, but also people who have sustainability in mind,” said Minkoff, author of the new book “Fearless: The New Rules for Unlocking Creativity, Courage and Success”.
It’s the younger customers who are more interested in sustainability.
“Right now, every brand’s goal is to get younger customers, but the price points don’t work for everyone,” said Jefferies retail analyst Janine Stichter.
In a recent customer statement, Stichter said that one-time rentals “are a logical step for brands trying to attract new, younger (often emerging) customers, as they can ultimately become buyers of the brand.”
Renting an item three or four times also helps a retailer monetize their inventory better, she told CNBC. Retailers just need to make sure they aren’t cannibalizing their existing business.
In a way, the concept has come full circle. Rent the Runway started as a one-time rental company in 2009 before expanding to monthly subscriptions in 2016. Overall, the subscription business took a hit during the pandemic but is now recovering.
Nevertheless, Hunsicker of CaaStle believes that there is potential for growth in both models.
“There comes a tipping point where enough people have experimented and tried with renting and realizing that it is not a substitute for ownership,” she said.
According to data from analytics firm Second Measure, the market size for fashion subscription boxes decreased 22% year over year in the second quarter of 2020. By the fourth quarter of 2020, sales had almost recovered to 2019 levels.
People will still buy their core items and rent those that are out of their reach or trending, Hunsicker believes.
“As more consumers age, and this becomes an option, it becomes simply the way people interact with clothing,” she said.
