Rentals Bring Some Into Luxury Clothing Market
You’ve probably heard some variation of the following: “She/he paid what for a dress/tux she’s/he’s only going to wear once?”
Many looking to dress to impress these days are faced with a fairly sizable obstacle: to look like a million, you’re likely going to have to spend thousands on clothing and accessories. But, what happens if you’ve only got to look like a million for a night or two? What happens when you need $4,000 to help pay for your kid’s college or braces and really can’t afford to spend it on a designer jacket or a watch?
For many, The Wall Street Journal reports, the answer is to rent luxury designer items.
Companies such as Bag Borrow or Steal, wardrobe-nyc.com, borrowedbling.com and others specialize in matching high-end goods with consumers that may aspire to purchase luxury designer garments but don’t have the financial wherewithal at the moment.
Not surprisingly, some designers believe the rental business opens up the possibility of future purchases for their goods while others see sales being lost for those choosing to take the least expensive way out.
Rentals also pose limitations on consumers. For example, the WSJ report said size availability is often limited. Women’s garments at wardrobe-nyc.com typically come in sizes between zero and six.
Discussion Questions: Are market conditions right for the rentals of luxury designer clothing and accessories to continue growing? Do you see the rental business opening up new opportunities for luxury goods or is it more likely to eat into future sales?
While there are some “aspirational” customers who might rent from time to time, I would agree with Ryan that those who can afford the products are less likely to want to wear clothes worn by others. I see this to continue to be a niche market that will probably be best served by online companies like Bag Borrow or Steal. The impact on the luxury market will be minimal. I believe that those who can’t afford it will probably continue to turn to knockoffs and look-a-like products.
The rental market for couture rentals will grow into a thriving business. Rentals allow for women in the second quintile of income to look like they belong in the top quintile, during social “moments of truth.” Further, it allows women in the top quintile to project their membership in the top 1% of income, while they are “on stage” socially.
Achieving social status in lower income quintile groups doesn’t pivot around renting couture. However, in the world of high end charity functions and celebrity parties, having a designer outfit (even a casual outfit) is part of the key to social success.
Why hasn’t this rental market been this vibrant in the past? The answer lies in income disparities, which are greater now than they have been since the era of the robber barons. And income disparity is only increasing (meaning the differential between the low and the high is getting more extreme). This economic reality has a social impact: upward mobility is harder to achieve. Hence, if you ain’t got it–rent it.
I was just having this conversation with a group around Mother’s Day dinner. As women, we all agreed it was a great idea to have rentals for wedding gowns and formal evening wear. (My own mother was married in a beautiful rented wedding gown in 1938). However, like any good idea, it has to be executed well and tweaked for the target audience. As a woman, I can say the first thing is that there must be a wide selection of sizes. The average woman wears a 14-16, and these are especially the people who don’t want to invest a lot of money in a dress they will wear once or infrequently. The second thing is that if a rental business is brick and mortar, catering to the local market (NY taste is different than Chicago or Dallas), it can do well. This is not just an idea for the party set in NY. It can filter down successfully to real people. If it was not a factor in the past, it’s probably because it wasn’t executed right or the time was premature.
Renting jewelry is not necessary, as there is so much great costume jewelry around these days.
As for the women who buy evening dresses and return them–this is a bad practice tolerated by the stores who allow it. Stores should enforce a no return policy for worn dresses–and you can always tell if it’s been worn. In fact, maybe the stores should have a new service of formal dress rentals themselves.
So, if I have enough money to plunk down $305 to “rent” a set of Vera Wand earrings and an extra $100 to rent a Fendi bag for a week, am I the kind of person who wants to be wearing clothing that’s been previously draped across a dozen or so bodies? This may be an idea that works for a handful of Cinderellas and Prince Charmings trolling for a human annuity but at some point the carriage turns back into a pumpkin and the Prince reverts to being a toad.
I would expect the rental clothes phenomenon to become centered around cities like Washington DC (3 Parties Every Night), NY and LA.
This is the land of the “poser,” where people have a hunger to appear as important and influential as possible to others. Check out the number of escort services, specialty rental cars, limousine companies, etc., and you will find that they abound in these places.
Except for men’s tuxedos, apparel rental hasn’t been a significant market. Although the rental of women’s special-occasion clothing and accessories has gotten some press, this market remains a tiny novelty. Many people buy something nice for a special occasion and return it afterwards. Saks puts a special tag on its formal gowns telling customers that returns will only be accepted if the tag is still attached. Other people wear something for a special occasion, then sell it on eBay.