Why Renting Could Be The Best Thing That Happened To Retail

About ten days ago, Sapna Maheshwari wrote in the New York Times about the rental boom. The point of ownership, she writes, is not to own at all, but rather “to experience the thing.” The article goes on to talk about the rental boom and brands starting their own rental programmes, the latest being Urban Outfitters with their rental service, Nuuly, which launched this month. Renting clothing is a natural consequence of the experience economy which is why brands and retailers must consider making the shift themselves — and it might just be the best thing that happened they did for their business. Here’s why:

Rent Today, Buy Tomorrow

Your future consumer is renting today. Additionally, the shift towards rental doesn’t mean the end of purchasing. Millennials will continue to purchase, but more carefully and thoughtfully. Rental allows customers to try the brand and products for less of a commitment. If the customer truly likes the brand and what it has to offer, they will move towards purchasing it.

Greater Margins

Rentals allow retailers and brands to earn significantly higher margins on their products, especially clothing. If a dress that costs $50 can be rented out for $10, ten times before it starts showing signs of wear and tear, the brand has already made double than it would have, selling it. A significant component of Rent The Runway’s success has been its dry-cleaning team who hand-remove stains at a rapid pace to ensure that the garment can be shipped out again in no time. The rental company’s dry cleaning practices are so efficient that the average garment on their site is rented out a whopping 30 times.

Data and Production

Offering a rental programme or box allows retailers and manufacturers to assimilate direct, real-time data from customers on what they prefer and what they are seeking. Retailers can feed this data directly into their manufacturing and supply chain processes to create only what their customers are interested in. Instead of relying on buyers and merchandisers to dictate trends, brands can work directly with their customers. The end result? Clothes that customers love, fewer clothes in landfills and a sustainable future.