Can a startup undercut Rent the Runway in the clothing rental space?
A new women’s clothing rental startup, Haverdash, is billing its $59 a month subscription plan as the most affordable unlimited rental service on the market. The question is whether the company’s pricing message will enable it to stand out against established players such as Rent the Runway and well-known newcomers like Urban Outfitters soon joining the market.
Haverdash subscribers are allowed to swap out their three rented items as frequently as they want, and the service comes with free shipping, returns and dry cleaning. Clearly aimed at a younger demographic, the company’s curated collection includes brands such as Cupcakes and Cashmere, French Connection, J.O.A., Lush, Moon River and Sanctuary Clothing.
“Forget your mother’s rulebook that says fashion is only worth it if it gets worn multiple times,” said Jessica Kahan Dvorett, general manager of Haverdash, in a statement. “Haverdash gives you permission not to wear the same thing twice.”
While Haverdash may not be factually correct that its service is the most affordable — American Eagle Style Drop is $50 a month — it’s clear that price is central to its differentiation strategy in the rapidly expanding clothing rental market. GlobalData Retail, The Wall Street Journal reports, has forecast the clothing rental market to grow from $1 billion in sales in 2018 to $2.5 billion by 2023.
Urban Outfitters is also looking to cash in on rentals with its own women’s clothing service named Nuuly, to launch this summer. The service draws from the retailer’s own Anthropologie, Free People & Urban Outfitters’ brands as well as a wide variety of other vintage and current fashions from outside designers.
Nuuly will initially offer a selection of 1,000 styles and grow that three times over by the end of the year. The service, which offers sizes ranging from 00 to 26, is priced at $88 for one box, with six pieces per month.
Richard Hayne, chairman and CEO of Urban Outfitters, said that Nuuly is his company’s “next step” in fulfilling its mission to provide “the creative, compelling shopping experience” for today’s consumers.
David Hayne, Urban Outfitters’ chief digital officer, will run Nuuly. In an interview with the Journal, Mr. Hayne said that the company isn’t concerned with cannibalizing retail sales. He forecasts Nuuly growing to 50,000 subscribers and generating more than $50 million in annual sales.
- Introducing Haverdash: The Most Affordable Fashion Rental Service On The Market For Millennials Looking To Experiment With Style, Color and Trends – Haverdash/PR Newswire
- URBN Launches Nuuly, a Subscription Rental Service for Women’s Apparel – Urban Outfitters, Inc.
- How It Works – American Eagle Style Drop
- Urban Outfitters to Start Renting Clothes – The Wall Street Journal
- Rent the Runway sees new program leading to a ‘closetless’ future – RetailWire
- Will Rent the Runway become all the fashion for kids? – RetailWire
DISCUSSION QUESTIONS: How big an impediment is price for consumers subscribing to monthly clothing rental services, and what’s the right price point? Do you see an opportunity for startups such as Haverdash, or has the die already been cast for the competitive lineup?