One of the big trends among Millennials is the embracing of a mentality of renting goods rather than purchasing them outright – hence the growth in market leaders like Rent the Runway. The obvious assumption here is that these organisations will take sales away from traditional retailers.
This is not entirely correct. Hence the counter-intuitive move by US-based department store chain Neiman Marcus to devote part of its San Francisco store to showcasing a constantly changing selection of clothes and accessories from Rent the Runway.
The idea being that this will introduce a much younger customer into its stores and potentially entice them into buying items to complete their Rent the Runway look. Consider that the average Neiman Marcus customer is 51 years old versus a mere 29 for Rent the Runway.
There is also another factor at play here and it is the finding by Rent the Runway that a massive 98% of rentals are for brands that customers have never worn before. Therefore it is clear that renting items is a great way of introducing younger shoppers to brands that they would not have previously bought – but could potentially do so in the future when they have become accustomed to the range (and acquired a little more disposable income).
Filipa Neto, co-founder of rental business Chic by Choice, suggested at the recent Wired Retail conference in London: “Retailers can benefit from this because it’s a way for customers to sample. It gets a generation in front of a product. Although they have lower disposable incomes we believe they will want to wear the real deal and we enable them to access these premium products. We give the brands exposure to younger customers.”
The Neiman Marcus and Rent the Runway tie-up suggests that we could be moving towards a scenario where the rental and purchase options sit comfortably side-by-side in-store and a mix-and-match situation develops. We’ve clearly had the phenomenon of Prada and Primark products being worn together so it should not be seen as too surprising a potential development as the ways people shop continue to evolve.
Glynn Davis, editor of Retail Insider
K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.