You’d think clothing subscription services like Rent the Runway and Trunk Club would be thriving alongside Netflix and Blue Apron, since people aren’t leaving home to shop (or eat or see a movie). But the clothing rental market is expected to tank 50%, reports InStyle.
💎 Data Digs
Rent the Runway was one of the first fashion rental platforms to make it big, and it might also be the first to go. RTR’s LinkedIn data shows a 23% decline in employee headcount from April.
The company laid off half their employees in late March according to the Wall Street Journal, and has lost at least a thousand followers on Instagram and Twitter.
⚔️ Big Picture
- People mainly rent formal and workwear, not casual basics. With the country working from home and spending nights inside, rental companies haven’t been benefitting from the current e-commerce boom.
- It’ll be a long time before concerts and big events return, even as lockdowns lift. Rental may continue to suffer without consumers dressing to impress.
- COVID contamination concerns are plaguing rental services. Around 55% of American shoppers are already hesitant about the cleanliness of secondhand and rented clothes.
- To make matters worse, Gen Z isn’t on board. Although teens are dedicated to sustainability — one of clothing rental’s biggest selling points — a UK study shows that only 20% of respondents ages 16-24 had ever rented clothing.
⚡ Get Ahead
Rent the Runway has raised new financing, restructured terms with suppliers, and started offering more ready-to-buy second-hand clothes to expand appeal, the Wall Street Journal reports. They may survive, but they’re falling behind their sustainable cousin: online secondhand shopping.
The online resale industry, led by Depop, Poshmark, ThredUp and the RealReal, is expected to grow by 69% and hit $64 billion in worth by 2021, while the broader retail sector shrinks by around 15%, according data from thredUP and GlobalData, a retail analytics firm.
Why are online thrift stores thriving? Some saw a quarantine clean-out frenzy, according to InStyle. Cooped up at home and hungry for cash, people are purging their closets, enriching and diversifying secondhand listings. Resale’s emphasis on bargains and value also makes sense for shoppers tightening their belts, while their flexible inventory is perfect for our whimsical shopping demands.
Depop, which takes a 10% cut of sales, saw its listings increase by 150% and triple-digit growth between April and June, per InStyle. Depop has also become a a form of social media, with its own culture of influencers, memes and blog-style captions According to a survey, shoppers plan to up their spending over the next five years on second-hand clothes more than any other retail sector.