Starting a new trend, Banana Republic launched its own rental services in 2019. However, the road ahead seems challenging as even big rental companies like Rent the Runway have been facing tough times of late. The company faced several service glitches in 2019 and even had to shut down its subscription facilities for a while.
Demand for rental grows despite challenges
Besides managing their shipping and inventory costs, rental companies also have to deal with washing and dry cleaning of their apparels. Yet, the demand for rental fashion seems to be growing with brands like Banana Republic, Vince, American Eagle and Bash launching their own rental services.
In November 2019, fast-fashion brand H&M also announced its intention to enter clothing rental services. The brand recently launched a flagship store in Stockholm that allows customers to rent a piece of clothing for $37 from a collection of 50 pieces that it currently holds. The store will first test waters for three months before expanding operations. Meanwhile other retailers like Banana Republic plan to expand their rental services by learning the intricacies of business and adding new customers. The company launched its service Style Passport in September and customer profile is increasing every month as the company allows customers to rent three items at a time with unlimited exchanges and free shipping and returns for $85 a month.
Best services at affordable rates
Growing rapidly, the online clothing rental market is expected to reach $1.96 billion by 2023. New companies are entering the space which is attracting many new customers. Opportunities for women customers are increasing as the entry of new players enables them to avail the best service at most affordable rates. A recent survey from JDA Software says, while 25 per cent of the surveyed consumers had used a rental service, about 75 per cent of them, traditionally used it to rent something for a special occasion. Customers prefer to rent more from retailers who offer a strong assortment of products at a good price point Brands like Banana Republics and Urban Outfitters offer customers strong loyalty programs which gives them a rich data that they can leverage to predict demand and choose products that have the highest potential to be successful.