The rental market growth: why is renting the future of retail?

The rental market is offering consumers high quality, trendy clothing without the price tag. It’s eliminating buyer’s remorse while giving shoppers a regular dose of dopamine with each rental. So, it’s no surprise that the global online clothing rental market is worth $1,215 million in 2021 and is expected to grow at an average annual growth rate of 10.6% to reach £2,247 million by 2026.

Though the pandemic affected the demand for outdoor clothing, rental companies have seen growth in engagement and renting. By Rotation, for example, recorded a 600% increase in rental since the beginning of November 2020; it also saw a 60% increase of app users as well as 10,000 new Instagram followers during the pandemic. Similarly, Rotaro’s rentals increased by 200% in the run up to Christmas.

Established retailers such as H&M and Ganni had also started to trial the rental model back in 2019; and new brands such as Hurr Collective and My Wardrobe HQ have introduced pop-up stores to educate consumers on clothing rentals. With Selfridges just launching its first in-house and online wardrobe rental service, in partnership with Hurr Collective, we will no doubt be seeing more and more rental companies on high streets and shopping malls.

So yes, the rental market is in fact here to stay. Let’s explore why:

Environmentally conscious shoppers:

Environmentally conscious shoppers existed, and were growing, well before the pandemic. However, the pandemic gave people time to think about the environment and thus accelerated the growth of shoppers who are concerned with sustainability and their fashion footprint.

Fast fashion has recently come into the spotlight as the destroyer of the planet, responsible for generating 1.2 billion greenhouse gasses, which is more than all international flights. Taking the UK as an example, the Telegraph states, the average woman in the UK owns around 95 items of clothing, only 59% of which they actually wear. As a result, each year, the UK alone ditches £100 million worth of clothing in landfill.

The millennial and gen z shoppers in particular are educating themselves on the impact of fast fashion on the environment and becoming more purposeful consumers. This is where clothing rental companies provide a solution. In fact, Forbes budded Hurr Collective as, “the clothing rental app that wants to end fast fashion”.

Millennials and Zoomers:  

The younger generation are shopping differently: they are rejecting excess clothes knowing the harm it causes to the planet, but also require a variety of trendy and expensive clothing for vlogs, Tiktoks, Instagram etc, without having the money to purchase them. 

The rental industry is solving the big problem of affordability among the young consumers by giving the, access to quality clothing at a fraction of the price; for example, Rotaro’s rental price starts at £15 for a four-day loan. This allows for more glamorous social media content where the shoppers themselves promote the brand to other borrowers and even byers.

The double win for the brand is: 1) being able to enter the millennial and gen z market; 2) having the shoppers market the brand to more consumers. Furthermore, through renting, retailers can create brand loyalty among younger consumers who will purchase more as their disposable income increases.

Furthermore, the pandemic shifted the demand for clothing rentals from occasion wear to casual wear. Of course, this is due to the lack of events but also because influx of younger consumers subscribing to rental platforms; it is the millennials and zoomers who pressure to keep up with fashion trends on a day-to-day basis causing the rise in demand causal wear rentals.

Convenience:  

The inconvenience of having too many clothes, some with tags still on, has also driven consumers into the rental market. The Mari Kondo lifestyle is being adopted by those who live is small spaces as well as the environmentally conscious. 

Occasion wear bought for parties, proms, weddings etc are often worn once. Perhaps they are too formal to wear again, other attendees have seen it, or they’re no longer in fashion – we often see these pieces of clothing on resale sites like eBay and Vinted. Whatever the reason, it is more convenient and hassle free to rent clothing rather than purchase.

In summary, renting is a solution-based concept: it is environmentally friendly, affordable, and convenient all at once. With the rental market becoming more socially acceptable, it will certainly be the norm post pandemic to buy less and rent more. Occasion wear in particular is forecasted to see a boom as gatherings and events become more frequently but casualwear will also see a boom among young consumers.

The USA is currently the largest consumers of the rental market followed by Western Europe. However, India and China are showing the fastest growth due to the increased consumer awareness and internet access. Since India and China make up over 34% of the world’s population, their increased use of rentals will contribute significantly to the growth of the rental market.

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