Sustainable Retail: Growth in rental
Welcome to the sustainability column that takes a look at what retailing is doing to address the issues in its industry. Much of the ongoing focus will be on fashion but not exclusively.
This month’s column takes look at how the rental model is moving beyond cars, tuxedos and ball gowns to encompassing a wide variety of categories and all types of clothing as increased awareness of sustainability impacts consumer behaviour.
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Historically the mainstream rental of goods has been limited to a very modest mix of items – predominantly cars during holidays and formal wear clothing for special occasions including weddings and black-tie dinners.
But things have been changing over recent years as greater awareness of the environment has been driving greater acceptance of the renting of goods and this has contributed to a broadened out of the range of products that can be hired.
In recent months we have seen Decathlon roll-out sports goods rentals across all its UK stores that involves not just bikes but also kayaks, paddleboards and tennis rackets. The company has committed products worth over £1 million to the scheme this year. Bikes have come in for an overhaul of their rental models with subscription services now de rigueur. Bikeclub involves children’s bikes, which can be changed over time to larger models as the child grows, for a monthly subscription fee.
In the US, mainstream jewellery chain Zales has teamed up with rental platform Rocksbox that typically provides the hire of three pieces of jewellery for a monthly rental fee of $21 but in the joint-venture it is offering the rental of high-end items for 14 days for 10% of the purchase price. The price range of the rental jewellery is $1,000 to $10,000.
It’s probably not surprising but it is clothing where you will find most of the rental action. This is reflected in the numbers from GlobalData that forecasts the UK rental market will grow by 62% this year and a cumulative 164% in the years up to 2026, which will contribute to the 19% CAGR that is predicted for global growth from 2022 to 2026. This will take the market size well beyond its current $4.9 billion.
Contributing to this serious growth are new brands coming into the market who are teaming up with the rental specialists including Rent the Runway, Hirestreet, HURR and Le Closet. Indicative of this is the partnership between Flannels and HURR that involves ready-to-wear items and also accessories for rental periods of 4, 8, 10 and 20 days.
Another instructive move involves the recently announced tie-up between Asos and rental specialist Hirestreet. It involves the first ever rental collection from Asos and encompasses 180 styles focused on women’s occasionwear with items that retail from £275 offered for hire over 4, 10 and 30-day periods, with the starting price at £20.
Jan Weatherley, corporate transformation director at Asos, says: “Our customers love our wedding and occasionwear ranges designed for special events. We’re delighted our new partnership with Hirestreet enables even more people to enjoy Asos’s unique fashion-led styles. Clothing rental is a growing market offering exciting commercial potential while supporting our goal to be more circular.’
Hirestreet has already worked with other players to launch rental collections including Marks & Spencer and various brands in the Boohoo stable including Warehouse, Oasis and Misspap. With the lower price-points of these brands it highlights how the rental market is broadening out across the clothing sector.
It now also includes childrenswear with The Little Loop providing a rental platform that helps parents deal with the cost of children’s clothing as their offspring grow. The inspiration behind the company was to help save parents money and also provide them with a sustainable way of consuming children’s clothing. The company has a tie-up with John Lewis & Partners online and will shortly be opening a pop-up within the group’s Oxford Street flagship for school half-term.
Amid all this activity it was especially interesting to see the recent performance of rental pioneer Rent the Runway. The company was very early in the market in offering a subscription service for hiring goods and to move the rental model away from just occasionwear and to include the likes of workwear.
It has had some tough periods since its formation in 2009 when it was ahead of the curve but its recent quarterly results were strong and revealed that 28% of subscribers paid more to add at least one additional rental item each month. This has been driven by customers opting to rent rather than buy certain items of clothing. To some extent this will be a result of the cost-of-living crisis but it will also undoubtedly be recognition that consumers are increasingly conscious of making decisions based on sustainability.
Glynn Davis, editor, Retail Insider
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