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Four effective ways brands are tapping into the rental market

The rental market boom is sending a clear signal to brands struggling to survive in the current retail climate: it is time to adapt to changing purchase behaviors, or risk losing market share.

The numbers don’t lie. Globally, the online clothing rental market is expected to reach $1.86bn by 2023, according to Allied Market. Disruptive fashion rental startup Rent the Runway, one of the first on the scene in 2009, has recently received a $20m funding injection from Alibaba’s founders and is now said to be valued at just under $800m.

The growing appeal of the rental market is largely due to the fact that it caters to such a large audience of consumers: from fashion-conscious shoppers who don’t want to own something they will likely only wear a handful of times, to the sustainability-focused consumer who is trying to do their bit for the planet by simply consuming and wasting less.

Globally, brands are now pursuing their own rental strategies in order to own the ecosystem in which the consumer shops. Whether the consumer is buying one day, and renting the next, they are being given the flexibility to choose while remaining within a brand’s universe, which is key to long-term loyalty. Here, we highlight three effective approaches when choosing to tap into the rental market.

Sustainability
Filippa K's Lease program
Filippa K’s Lease program

Swedish furniture company IKEA has recently announced it is piloting a furniture-leasing program at one of its Switzerland stores, starting with office furniture. The program, which includes refurbishing items once returned and leasing – or even selling – them again, is part of the company’s efforts to develop a circular business model.

Meanwhile Stockholm-based clothing label Filippa K leases its clothes as a way of promoting a more sustainable consumption model within the industry. Customers can rent anything they want for four days at 20% of the full price, with the cost of cleaning the garment included. According to the brand’s sustainability director Elin Larsson, the rental program grew 123% in 2017.  

Like Ikea, the initiative is just one part of the brand’s effort to achieve a circular business model by 2030, which also includes goals such as all garments being fully recyclable, achieving a traceable supply chain, and making the business as a whole more resource-efficient, meaning it will produce only what is needed and purchase the right amount of materials to do so.

Data-capturing
Rent the Runway designer collections
Rent the Runway’s designer collections

Many established brands dipping their toes into the rental market are doing so by teaming with new or more established players in the field in order to gather data about how customers are shopping and behaving.

After years of receiving data from Rent the Runway on how well their clothing is performing as rentals, US designers Prabal Gurung, Jason Wu and Derek Lam are introducing exclusive collections to the platform driven by consumer preferences. For example Gurung’s inaugural line, sold exclusive on RtR, will feature adjustments from different cuts to colors and prints that respond directly to customer feedback.

Another retailer trying to better understand how consumers are behaving is luxury department store Browns, which last year teamed up with rental startup Armarium on a two-week in-store pop-up presenting past season party pieces from designers such as Alexander McQueen and Erdem.

Customer acquisition
Ba&sh's NY store rental
Ba&sh’s NY store

French brand Ba&sh is expanding its US presence and hoping to garner the attention of a wider audience with a concept store in New York offering a rental program where customers can rent pieces entirely free of charge, for the whole weekend. Customers can visit the store and borrow a curated rack of garments from the current collection on a Friday between 5-7pm, as long as they are returned by Monday at 7pm.

With the service, the brand’s founders wanted to make guests feel like they are borrowing clothes from their friends’ closets. “This is an ideal place to test a concept we’d like to try in other major cities where Ba&sh also has a presence,” said Sarah Benady, Ba&sh’s CEO for North America, to French website, Frenchly.

New revenue streams
Aoki's Suitsbox service rental
Aoki’s Suitsbox service

Express and Ann Taylor are major retailers that have both recently introduced a subscription service for renting their clothes. Following the success of Rent the Runway’s business model and the many alternatives that have flooded the market since, customers to both retailers can rent a limited number of items a month for a set fee.

“The consumer who is more interested in access versus ownership is happening across many industries,” said Jim Hilt, Express’ chief customer officer, in an interview with CNBC. “We looked at this evolution and asked, ‘how do we participate?’.”

In Asia, a region where used clothing often carried negative connotations, brands and retailers are also in on the action, particularly targeting urban workers. Menswear brand Aoki is offering a subscription service, Suitsbox, where for 7,800 yen a month customers can rent a complete outfit composed of suit, shirt and necktie. Retailer Renown, meanwhile, is offering a suit rental service for a flat month fee with a minimum six-month contract. “From the age of buying clothes, we have entered the age of renting them,” said Renown’s corporate communications head, Tomohiro Nakagawa.

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What you missed: Alibaba’s Singles’ Day record, ASOS try before you buy, unpaid Zara workers

Alibaba on its Singles' Day success, as posted on Twitter: "#Double11 2017: As of 24:00, total GMV has exceeded RMB168.2 billion - more than USD25.3 billion. Mobile GMV: 90%."
Alibaba on its Singles’ Day success, as posted on Twitter: “#Double11 2017: As of 24:00, total GMV has exceeded RMB168.2 billion – more than USD25.3 billion. Mobile GMV: 90%.”

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past week.


TOP STORIES
  • Alibaba’s Singles’ Day goes global with record $25bn in sales [Bloomberg]
  • How Alibaba makes Singles’ Day appealing to luxury brands [Glossy]
  • Will the power of Singles’ Day ever truly capture the West? [The Drum]
  • Alibaba tests 60 futuristic pop-up stores across China for Singles’ Day [Digiday]
  • ASOS launches try before you buy service [TheIndustry]
  • The real story behind those desperate notes that Zara workers left in clothes [Fast Company]

BUSINESS
  • Inside LVMH’s executive reshuffle [BoF]
  • Burberry operating profit jumps 24% in half, boosted by new Coty deal [WWD]
  • Yoox Net-a-Porter Q3 sales jump 17.7% [Fashion United]
  • To reach consumers, Richemont’s new leaders need to embrace digital [BoF]
  • Laying out fashion’s new supply chain vision [CFDA]
  • One of fashion’s most prominent investors is someone you may never have heard of [TheFashionLaw]

SOCIAL MEDIA
  • ASOS launches virtual Gift Assistant on Facebook [TheIndustry]
  • Why Maybelline is winning at social media [Glossy]

MARKETING
  • The new marker of luxury is feel-good marketing [QZ]
  • For Nike, augmented reality is the perfect way to sell hyped sneakers [Engadget]
  • Gwen Stefani fronts Westfield’s Christmas campaign [Fashion Network]
  • Cue the reindeer: Kohl’s, Nordstrom launch holiday campaigns [MediaPost]
  • Fruit of the Loom goes totally 80s with comical freeze frame ads for sweatpants [AdWeek]
  • Fashion wakes up to podcasts [BoF]

RETAIL & E-COMMERCE
  • The Alibaba warehouse where fake goods go to die [Sixthtone]
  • You can now rent Ann Taylor clothes for a monthly fee [Today]

TECHNOLOGY
  • Amazon’s app now lets you place items inside your home using AR [The Verge]
  • Apple said to be working on AR headset aimed for potential 2020 ship date [TechCrunch]
  • Zalando to open new tech hub in Lisbon [TheIndustry]

PRODUCT
  • Is mass customisation the future of footwear? [WSJ]
  • These 10 brands are killing it on the fabric innovation front [HighSnobiety]
  • Ford just made a trucker hat that uses technology to save truckers’ lives [Fast Company]

START-UPS
  • Glossier, Stitch Fix among most disruptive companies [RetailDive]
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Blocks film

Comedy sketches from SRSLY duo anchor LOFT holiday campaign

loft_srsly2
LOFT has teamed up with the duo behind a web comedy series called SRSLY to bring some funny to its fans this holiday season.

The “Put the Happy in Your Holiday” campaign sees a series of four short sketches featuring stars Alexandra Fiber and Danielle Gibson.

The once NYU classmates focus on a variety of different humorous scenarios including getting trapped in a red dress in the fitting room; deep in conversation with a dog at a party; choosing to reject the multitude of holiday invites that have come through the door on any given night and stay in instead; and discussing their ever-so stylish ‘gingerbread boyfriends’.

“We’ve been huge fans of the SRSLY girls for a while and knew we wanted to partner with them on a fun video series and what better time than during the holidays when everyone is scrambling to do it all. They nailed it with the different dilemmas they chose to poke fun at. And who hasn’t been in at least one of the situations the SRSLY girls spoofed during the holidays,” Michelle Horowitz, SVP of marketing at LOFT, told us.

Fiber and Gibson, who have partnered in the past with the likes of Glamour, Refinery29, Birchbox and Bare Minerals, told WWD: “We love working with brands that have a great sense of style and humor, and LOFT let us eat cookies and hang out with a puppy. We also made videos at some point… Can the entertainment and fashion industry ever merge with such delicious and fluffy results again? We don’t know. We don’t think so. It was one of the most fun shoots we’ve ever done, and we’re psyched for the rest of the world to see what happens when you put the LOL in LOFT.”

The duo are also appearing in a “12 Vines of Christmas” series, with new clips being released each day like an advent calendar on the “Loft.com site”, where some curated gift picks as well as a FalalalaLoft playlist from the SRSLY girls exist for further perusal.

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Uncategorized

Tumblr losing its fashion sheen?

Having only ever read positive reports about the fashion industry’s use of Tumblr, such as this one and this one, not to mention interviewed the blogging platform’s fashion director Rich Tong myself a few months ago (and walked away feeling very encouraged about it), it’s interesting to hear things aren’t quite as rosy in the eyes of brands as they seem.

Over the past few days, numerous industry reps have voiced their opinions:

A blogspost from Jessica Coghan, director of digital marketing at Starworks Group, about Tumblr’s proposed sponsorship deals surrounding New York Fashion Week kickstarted the outcry. She called for the platform to provide brands with an analytics dashboard, rather than this “flash in a pan fashion week nonsense”.

Soon followed all manner of comment, including that of Julie Fredrickson, who manages digital and social media at Ann Taylor, highlighting a certain favouritism is at play.

Raman Kia, head of digital marketing at Starworks, pushed the debate further with regards to “one of the largest online retailers of luxury fashion globally” (three guesses as to who that refers to), suggesting that Tumblr’s actual problem is a cultural one based on both prejudice and a lack of empathy. Strong words.

Rather than repeating it all here, check out Lauren Indvik’s incredible analysis over at Mashable: Fashion marketers voice public outcry against Tumblr.

Interestingly, when I interviewed Tong and questioned him ab0ut monetisation, he said the VC funding the company has had is enabling them to focus primarily on growth, rather than on making money. He explained how Tumblr didn’t want to become one of those start-ups that in concentrating on revenue, ends up changing what they do, losing direction and ultimately failing. Looks like he maybe didn’t take his own advice.