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data e-commerce Editor's pick Retail

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.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. The Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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business Campaigns digital snippets e-commerce product Retail Startups sustainability technology

ICYMI: Chinese moguls rebooting fashion, biotech shaping the industry, smart checkouts rising

China’s internet moguls are rebooting fashion
China’s internet moguls are rebooting fashion

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

TOP STORIES
  • How China’s internet moguls are rebooting fashion [BoF]
  • How biotechnology is reshaping fashion [BoF]
  • Smart checkouts will process $45B in transactions by 2023, study says [MobileMarketer]
  • 5 tech innovations we’re talking about from fashion week season [TheCurrentDaily]
TECHNOLOGY
  • When it comes to technology, fashion is still a laggard [BoF]
  • How Diageo is using Amazon Echo and Google Home [Digiday]
SUSTAINABILITY & PURPOSE
  • John Lewis invests in plastic reduction [Drapers]
  • Why does so much ethical fashion look the same? [Fashionista]
RETAIL & E-COMMERCE
  • Express is the latest retailer to launch a clothing rental service [CNBC]
  • Fruit of the Loom celebrates Seek No Further with interactive shopping experience [FashionUnited]
  • Forever 21 invests in online styling service DailyLook [RetailDive]
  • Is the future of online deliveries allowing drivers access to your home? [TheIndustry]
MARKETING & SOCIAL MEDIA
  • Hollister partners with Sit With Us [WWD]
PRODUCT
  • Why mainstream brands are embracing modest fashion [CNN]
BUSINESS
  • Revolve officially files for IPO [Fashionista]
  • Walmart buys Eloquii for undisclosed amount [RetailDive]
  • Anya Hindmarch losses mount to £28.2m [Drapers]
  • Payments startup Klarna raises $20M from H&M, its second backer from the fashion world [TechCrunch]
CULTURE
  • The London Underground is getting vending machines to clean all your dirty clothes [Wired]
  • Meet the robotic museum guide that will turn art into sound for the visually impaired [FastCompany]

How are you thinking about innovation? We’re all about finding you the perfect partners to do so. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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Editor's pick Events technology

Sitting at the edge of culture: How SXSW has moved from tech to brand playground

Viceland's baby goats at SXSW
Viceland’s baby goats at SXSW

How do we know when we have hit peak SXSW? Was it the year grumpy cat stole all the headlines? Was it the hotel-sized vending machine from Doritos? Was it when homeless people were rather uncouthly set up as wifi transmitters?

Or will we look back and think about when baby goats grabbed our attention in 2018? With a solid dose of irony, Viceland went above and beyond to get people to pay its parking lot spot a visit this year, with a pit full of real-life “kids” available for petting. How else are you going to spend your time in between hopping from keynote sessions to tacos and barbecue. after all?

Jokes aside, that move represents quite a significant shift that’s happened over the past five-plus years at the Austin-based festival. At one point the Interactive portion of the show, which precedes Music and runs alongside Film, was really about new tech launches – the place to discover the latest startups, and the big event for the likes of Twitter, Foursquare and beyond to get off the ground.

Where once it was really a haven for geeks, and a playground for all things B2B, slowly but steadily it has shifted to become more and more about marketing, and then carried through to be a representation really of broader culture and society.

Let’s not forget how much more pervasive the internet has become in our lives during that time. SXSW Interactive is really about everything cultural because tech infiltrates that in every single way today. In doing so, the festival has therefore simultaneously ended up being phenomenally consumer-facing.

2018 is the perfect culmination of that evolution. On the one hand, the big speakers on stage this year are discussing everything from female empowerment, diversity and transparency, while out and about around the city there’s a mass takeover by fashion brands, not to mention the most impressive activation from entertainment entity Westworld, that has ever been seen at SXSW.

TheCurrent's founder, Liz Bacelar, "wanted" at the Westworld SXSW experience
TheCurrent’s founder, Liz Bacelar, “wanted” at the Westworld SXSW experience

The audience mark-up of the event is inevitably behind this shift as well, with that focus on culture driving it. No longer is it just comprised of developers or startup entrepreneurs, but rather a perfect slice of the typical “millennial” target consumer. Is it fully representative of America? Perhaps not. But there is certainly diversity on the ground in many more ways than you would have imagined from a tech conference, and than you would have seen 5-10 years ago.

The big consumer-facing activations used to arrive only for music. Doing them during Interactive isn’t entirely new – Nike, Levi’s, Game of Thrones, even Warby Parker have had a presence in previous years – but 2018 stands out for its pervasiveness.

In terms of hype, the big activation is Westworld, as mentioned. Today, there are people lining up for hours to get a secret shuttle out to Live Without Limits, where HBO has built a replica of the fictional town of Sweetwater to kick off marketing activity around the show’s second season.

Under Armour's Hovr activation at SXSW (Image via AdWeek)
Under Armour’s Hovr activation at SXSW (Image via AdWeek)

Back in downtown, meanwhile, technology isn’t entirely missing from the experiences put together, but a lot of it is on consumer tech for today, rather than tomorrow. Highlights include the Google Assistant house touting the future of voice tech on the one hand, and Under Armour’s push for its latest cushioning technology, Hovr, on the other. The latter was teased as a zero gravity experience, but turned out to be a group of trampolines to take photos on, proving the value of Instagram-worthiness remains (with long lines out the door to back it).

The move to represent the technical ability in product, has also been the case for L’Oréal this week with the launch of its Custom D.O.S.E. skincare line – a technological service that can scan and evaluate an individual consumer’s skin and create tailor made serums as a result.

And tech is a consideration for Outdoor Voices too, with the launch of an augmented reality campaign that encourages SXSW attendees and locals to get outdoors into a park to get access to exclusive product. In addition, Bose has also been thinking about AR, but this time demonstrating a pair of smart glasses that use audio rather than visuals as the overlaid digital information. The result is that you can hear what you see – when you look at a building for instance, it tells you what it is in your ear.

Our friend @jennifer outside the Hermèsmatic store in Austin for SXSW
Our friend @jennifer outside the Hermèsmatic store in Austin for SXSW

Some of the other experiences meanwhile are more traditional in their programming. A line-up of talks, a store and a DJ for happy hour does the job for fashion brand Express, for instance, while the Create & Cultivate pop-up, which is focused on “women to watch” and backed by watch brand Fossil, is not dissimilar.

Laying on top of all that is also some truly lo-fi consumer focus. Wrangler has teamed up with Modcloth to offer denim customization in the latter’s store, for instance. Meanwhile, Hermès is probably the most surprising attendee. The luxury brand has brought Hermèsmatic – a laundromat-inspired customization and repair service – to this year’s festival to offer fans the chance to update their vintage scarves via washing and dip-dying services.

SXSW may not be the place to discover the latest big tech before anyone else anymore, but it is certainly somewhere to come for a jump into how modern culture is evolving at the hands of our connected era, and inspiration around the kind of brand activations targeting tuned-in millennials accordingly.

Categories
data digital snippets e-commerce mobile social media technology

Digital snippets: all about chatbots, Burberry’s ‘Snapcode’ products, Ralph Lauren’s connected fitting rooms

chatbots-illo-hed-2016

If there’s one story dominating tech titles at present, it’s the role of chatbots in our messaging apps. That was especially the case following Facebook’s F8 developer conference Tuesday, but is also reflected through numerous other recent stories focused on brand uptake across messaging channels. Read on for your round-up of all that, as well as other latest fashion and technology stories to know about…


  • Shopping start-up Spring launches one of first bots on Facebook Messenger [Forbes]

  • Kik launches a ‘Bot Shop’ because bot shops are the new app stores [Fortune]

  • Why brands from Barbie to Uber are so hot on chatbots [AdWeek]

  • Sephora launches chatbot on messaging app Kik [Forbes]

  • WTF is all the fuss with chatbots? [Digiday]

  • Chat bots, conversation and AI as an interface [Benedict Evans]

  • Snapchat takes on Facebook with huge new upgrade – messaging is the focus [Vanity Fair]

  • Data alone can’t decode the fashion consumer [BoF]

  • Is fashion ready for the AI revolution? [BoF]

  • Burberry first to create a ‘Snapcode’ on their products to nudge shoppers onto Snapchat Discover [The Drum]

  • Inside Ralph Lauren’s connected fitting rooms [Digiday]

  • Express leverages Snapchat with in-store checklist campaign [Mobile Commerce Daily]

  • Snapchat is ‘increasingly important’ for Asos customers [Marketing magazine]

  • Your ad here: why Grindr, Pornhub and YouPorn are fashion’s new billboards [It’s Nice That]

  • Even in a mobile world, retailers aren’t convinced social media can sell [AdWeek]

  • Facebook said to face decline in people posting personal content [AdAge]

  • Pinterest opens up Promoted Pins for UK advertisers, with John Lewis and Made.com among launch partners [The Drum]

  • Flush with tech wealth, San Francisco warms to fashion [BoF]

  • Manufacture NY and FIT partner to bring revolutionary textile innovation to New York [Manufacture NY]
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Digital snippets: Stella McCartney, Chanel, Express, Nowness, Amazon, Shopkick

Triathlete Holly Avil for Stella McCartney's adidas Team GB collection

Some more great stories from around the web surrounding all things fashion and digital this week:

  • Behind-the-scenes on Stella McCartney’s adidas Team GB Olympics collection shoot [VogueTV]
  • Chanel joins list of luxury advertisers on online video service Hulu [Luxury Daily]
  • US fashion retailer Express begins selling entire catalog on Facebook [Mashable]
  • Amazon launches fashion site MyHabit.com to compete with flash sales services including Gilt Groupe and Vente Privée [All Things D]
  • Location-based shopping app Shopkick partners with Crate and Barrel [Mashable]