More and more large American retailers are optimistic about the potential of the clothing rental market and are venturing into the clothing rental business. The Associated Press published “Retailers try clothing rental business, but is it right?” on February 10, 2020. “The article pointed out that high-end department stores Bloomingdales, clothing retailers Banana Republic, Urban Outfitters, etc. have all been involved in the clothing rental business. At the same time, they face many challenges and it is still unclear whether they can continue.
According to data from the research company Global Data, the current market size of the clothing rental industry is approximately US$1 billion and is in an upward development stage. It is estimated that it will reach US$2.5 billion by 2023. Together with the apparel resale business, it will account for 13% of the total US apparel market of $360 billion within ten years, up from 7.3% currently.
The president of Retail Metrics, a US retail industry consulting company, pointed out that clothing retailers are currently facing many pressures, including large-scale promotions, long-term decline in consumer traffic, e-commerce, etc. The clothing rental market is small but has room for upward growth, and clothing retailers must invest in it.
Clothing rental belongs to the Sharing Economy. Steve Barr, head of consumer markets at the American consulting firm PricewaterhouseCoopers, pointed out that the target customer group of the clothing rental market is age group. In their 20s and 30s, consumers in this customer group are less interested in owning or making large investments, but they also want to obtain different brands and services. When traditional retailers enter the clothing rental market, they face many challenges, including marketing, rental clothing cleaning, logistics, and others, such as consumers complaining about uneven services.
CaaStle CEO H said that traditional retailers are used to marketing products rather than providing services, so it is important for them to know which customers to send messages to and how often. It’s a challenge. Another challenge for retailers is that there are too few return locations.
Retail expert Melissa Gonzalez said that retailers should have self-service rental kiosks in stores in major cities, but most retailers currently do not have such rental kiosks. Kiosks, consumers must take the clothes they want to return to UPS or the post office. Some experts also doubt whether it makes sense for low-price clothing chains to enter the clothing rental market, because consumers can only buy second-hand clothes or buy them when they are on sale.
