Not too long ago, clothing rental services were seeing a decline in demand as consumers hunkered down at homes and stopped engaging in social events. But now, with businesses ditching remote work policies and inflation impacting consumers’ spending abilities, fashion rental platforms are once again having a moment.
Rent the Runway, for example, is experiencing a surge in its number of active subscribers, reaching a record high of 141,205 in April. Meanwhile, the Black Tux, a company specializing in renting formalwear, also reported a 35% increase in revenue compared to pre-pandemic levels. And, Nuuly, which Urban Outfitters owns, expects 200,000 subscribers by the end of 2023.
However, as inflation worsens and consumer spending habits shift due to factors such as rising interest rates and decreasing savings, rental services face the challenge of retaining their customers while also dealing with their own rising costs. This makes it essential for them to provide customers with greater value for their money.
But that does not come without its challenges.
For instance, in an effort to maintain operations, Nuuly recently announced that its standard monthly plan would increase by $10, from $88 to $98, for new subscribers starting April 26, 2023. Existing subscribers will see the billing change on August 1, 2023.
In a statement addressed to its subscribers and app visitors, Nuuly explained that since its launch in 2019, the costs of providing its subscribers with high-quality brands, styles, and services have increased. Therefore, to continue providing the complete Nuuly experience, the service needs to raise its subscription price.
To address concerns about inflation and keep subscribers engaged, some rental startups are offering more benefits. For example, Rent the Runway changed its subscription plan in March 2023 to provide members with “more value” and enhance retention. As part of its “Era of Extra” perk, the company now offers subscribers one more free item per order.
Fashion rental enthusiasts are drawn to the concept because it aligns with their wallets and values and allows them to switch up their wardrobes as in-person events, and even office mandates, become more common.
Taking advantage of this newfound demand is ReSuit, a new peer-to-peer clothing-sharing app that was launched last summer, just as consumers were returning to social events.The app, which is based on fit-sharing, allows users to rent, purchase, lend, or sell items while ReSuit takes a percentage of sales as a fee. Users reportedly earn 80% of sales and 75% of rentals.
“The present economy has been beneficial for re-commerce,” Nada Shepherd, the co-founder of ReSuit, told Modern Retail.
Shepherd noted that ReSuit’s unique features include a scheduler enabling item owners to block dates when the piece is unavailable for rent. Currently, the app finds that users mainly search for high-end accessories and outfits for social events like parties and nightlife.
But despite what consumers are looking for on dedicated apps or platforms, the ability to rotate wardrobe is what many are gravitating toward, whether it be through rental services or purchasing through preloved marketplaces. The model allows consumers to obtain various brands without the major expense of ownership. And that seems like a model that is here to stay.