Clothing rental platforms are on the rebound
It’s been more than a year since the coronavirus brought events and socializing to a screeching halt, prompting much of the United States to settle into sweatpants and stay indoors for months on end. Yet in recent weeks — and particularly in parts of the country where life is edging back toward normalcy — a post-pandemic ebullience is emerging in how Americans are dressing.
Traditional retailers such as T.J. Maxx and Macy’s have reported a surge in apparel sales. And clothing rental platforms such as Rent the Runway say they are reaping the benefits after a perilous year of layoffs and slashing budgets.
Rent the Runway CEO Jennifer Hyman said this month that users have been returning to the service in droves. Since a pandemic low last May, there has been a 92 percent increase in active subscribers — lured in part by recent discounts — and the number of customers was on track to outpace 2019 levels by the end of the year.
Traditional rental hubs in the South such as Texas, Florida and Georgia were the first to show signs of recovery this year, although they are not yet back to 2019 subscriber counts, she added. New subscribers have increased in cities such as Charleston, S.C.; Charlotte, N.C.; Nashville, Tenn.; and Phoenix. Growth has also come from smaller cities where the company had not done as much business, such as Chapel Hill, N.C., and Knoxville, Tenn. In the New York metro area, the company’s average number of new subscribers each day in May was 4 ½ times higher than in February.
Daring new trends have also started to emerge in terms of what women want to wear — bolder, brighter and sexier styles than ever before. Some companies are calling the trend “peacocking” or “hedonism.”
“This is something we are seeing across the country in every age segment and is so different from anything we’ve seen in our 13 years of business,” Hyman said. The company’s data offers a near realtime view into what people are wearing — or not wearing. For example, it has seen four times the demand for crop tops in 2021, compared with 2019, including triple the demand from women 35 and older, plus a 44 percent increase in searches for outfits with cutouts. Cutouts aren’t just for the nightclub — they’re also making appearances at baby showers, the company said.
“It is truly surprising that women above the age of 35, women in their 40s, are renting crop tops at the exact same rate as our teenagers
on the platform,” Hyman said.
And as quarantines have lifted, so have hemlines. From coast to coast, mini dress shipments have doubled this year versus 2019. Neon colors and “loud prints” are on the rise.
Consumer psychology has shifted irrevocably over the last 15 months. Along with a growing reliance on e-commerce and online services, greater concern for sustainability has prompted millions of consumers to reconsider their previous spending patterns. And the sharing economy continues to reshape numerous aspects of society, such as the prioritizing of access over ownership. According to
Claudia D’Arpizio, a partner at Bain & Co., the pandemic could actually make apparel rental — and its sister industry, fashion resale — some of retail’s biggest winners in a new era of consumption.
“When you ask young people in particular about secondhand and rental fashion, it is clear they believe it is the future,” D’Arpizio said. “Of course, as this market grows, efficient delivery, returns and logistics — which have an environmental footprint of their own — become a more complex and expensive consideration. But the fact that you now have an increasing number of old-guard brands and retailers entering the space underscores the fact that the industry thinks it is an opportunity that is only going to grow.”
Apparel sellers were pummeled last year, and Rent the Runway was no exception. Before COVID-19, the New York-based company was rapidly expanding, with mailrooms at Wall Street companies piled high with its bags of returns Mondays and an expanding network of dropoff points at WeWork locations.
The spread of COVID-19 halted that momentum, ushering in a period of paranoia around sharing and touching common surfaces. Rent the Runway, which had allowed customers to put their subscriptions on hold for a few months, scrambled to offer an indefinite pause so customers wouldn’t drop the platform.
Of all the changes Rent the Runway made to its business last year, the biggest was the shift from its unlimited offering, which had allowed subscribers to swap as many items as they wanted for a monthly fee. Now, it offers a few different tiers — users can rent up to four items per month, in one shipment, for $89, or up to 16 items, and up to four shipments, for $199. The new model appeals to a broader array of customers and is more cost-effective and better for the environment, Hyman said, as it cuts down on the nonstop deliveries and dry cleaning.