Rebecca Minkoff, retailers renting clothes with no monthly commitment
Rebecca Minkoff recently began allowing customers to rent clothing without a subscription.
Source: Rebecca Minkoff
In an effort to attract more customers, some clothing brands are starting to rent their clothes, without a monthly subscription.
Fashion designer Rebecca Minkoff recently became the first to offer a ‘borrow’ option on her website, powered by rental technology platform CaaStle. Customers can wear the item as many times as they want during the rental period and have the option to purchase it at an adjusted price.
Subscriptions, on the other hand, usually have a fixed monthly price for a number of items from the retailer. While some brands offer subscriptions just for their clothes, companies like Rent the Runway and Stitch Fix offer a plethora of designers.
“In reality, how many different subscription services are you going to belong to? Minkoff recently told CNBC.
“It is becoming unbearable.”
Product sold on the RebeccaMinkoff.com website.
Retailer Vince will introduce the ‘borrow’ button for men’s and women’s clothing on July 13, and designer label Rebecca Taylor is expected to launch the service later this summer for its women’s clothing. Both already have subscription programs.
“We envision the ‘borrow’ button being ubiquitous with anyone selling clothing,” said Christine Hunsicker, Founder and CEO of CaaStle, which also provides rental-based subscription services to Banana Republic, Express and Destination. Maternity.
“They can extend their reach to consumers,” Hunsicker said.
Hunsicker said she expects big brands to offer subscriptions in addition to one-off rentals, while small businesses can stick with rentals only.
“If you think about the percentage of the population that can afford a combination of $ 300 or $ 400, 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 current customers to dig a little deeper. Her dresses typically range between $ 98 and $ 378.
“It was a way to meet our wife where her wallet is, but also people with sustainability in mind,” said Minkoff, author of the new book “Fearless: The New Rules for Unlocking Creativity, Courage , and Success “.
It is young clients who tend to be drawn to sustainability.
“For every brand right now, the goal is to get younger customers, but the prices don’t work for everyone,” said Janine Stichter, analyst at Jefferies.
In a recent note to clients, Stichter said one-off rentals are “a logical step for brands trying to acquire new, younger (often ambitious) customers, as they may ultimately become buyers of the brand.”
If an item is rented three or four times, a retailer is also able to better monetize inventory, she told CNBC. Retailers just need to make sure they don’t cannibalize their existing business.
In a sense, the concept has come full circle. Rent the Runway started as a one-off rental company in 2009 before expanding to monthly subscriptions in 2016. Overall, subscription business was hit during the pandemic, but is now rebounding .
Still, CaaStle’s Hunsicker believes there is room for growth in both models.
“There is an inflection point ahead where enough people have experimented and tried leasing and realizing that it is not a substitute for ownership,” she said.
The market size for trendy subscription boxes fell 22% year-on-year in the second quarter of 2020, according to data from analytics firm Second Measure. In the fourth quarter of 2020, sales were almost back to their 2019 level.
People will continue to buy their basic items and rent the ones that are out of reach or fashionable, Hunsicker believes.
“As more and more consumers age and this is an option, it will just become the way people interact with clothing,” she said.