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Rental clothing is the next big retail boom

One person’s trash is another’s treasure – and the saying also reflects our current shopping habits. While traditional retail went into freefall last year, the secondhand market experienced fast growth. Now it’s forecast to hit $64 billion in the next five years, and will overtake fast fashion, according to data from online thrift store thredUP.

The turnover of London-based peer-to-peer social shopping app Depop – the Gen Z go-to for 90s chunky boots and iets frans hoodies – doubled between April and June 2020. The app, which has 27 million users in 147 countries and was acquired by Etsy for £1.6bn in June, reported that it had 20 new sign-ups every minute in July 2020. Meanwhile, peer-to-peer fashion rental app By Rotation's user numbers have grown by 425 per cent in the year since March 2020.

Gen Z used to shop for low-cost fashion on the high street, now its purchases are made online. Eighty per cent of Depop’s active users in the UK are 26 or younger. Paris-based Vestiaire Collective, which raised $216 million in March, has 11 million members and a core customer base between 20 and 40, while the majority of Vinted’s users are between 18 and 35.

The rise of circular platforms is a reflection of the unique nature of some of the merchandise as well as a reaction to fast-fashion. Users also see it as a way to make money by selling off their own preloved wares. During lockdown, these apps offered a community, too. Companies set up a space for people to connect with one another, support each other’s online shops and rotate clothes with one another.

And there’s money to be made outside of Gen Z. Rental sites don’t only cater to working professionals, bargain hunters and fashion obsessives – there are startups targeting parents too. Bundlee and thelittleloop are rental services for baby and toddler clothes, while Whirli enables its customers to share children's toys. Kids O’Clock is a platform renting second hand designer clothing for kids. Launched in early 2021, it was founded by former Net-A-Porter and Moda Operandi buyer, Laura Roso Vidrequin, who plans to roll out a rental offering for baby gear, children’s clothing and specialist items such as ski-wear from retailers.Such services minimise waste and clutter in the home, as well as saving users money.

“There is no shame in wanting to be smart about our spending. Secondhand is here to stay,” says Vidrequin, who also predicts that when Depop customers start having children, they will fuel even more demand for rental retail.

With Whirli, customers pay £10 a month to access around £80 worth of toys, from educational and STEM toys to garden slides and ride-ons, with the option to swap multiple times a month. In a year, you might pay £120 for access to hundreds of toys, a figure most parents would typically spend on a few toys for one child at Christmas. Hygiene is of the utmost importance: these platforms say that all items are thoroughly sanitised.

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“That’s how rental and sharing can become more mainstream, by really giving customers a lot more convenience, a lot more flexibility versus a traditional retail channel. Everyone understands the power of sharing, especially in the kids’ space,” says Nigel Phan, the CEO of Whirli.

Phan likens consumer behaviour during the pandemic – being willing to try something new, such as secondhand and rental models – to what we saw in 2008, when cash-strapped customers started flooding to “super discounter” supermarkets like Lidl and Aldi.

Big-name brands are also starting to see the potential of the pre-used marketplace. In March, Ralph Lauren became the first luxury label to launch a subscription rental service, “The Lauren Look”, in North America.

“Brands are embracing the idea of renting out their clothes and also diversifying their audience. They’re looking at rental to get a new audience,” explains Eshita Kabra-Davies, founder and CEO of By Rotation. Some brands are dipping a toe into the rental space to stay relevant: Kabra-Davies gives the example of a £1,000-and-up dress label being interested because the alternative – selling past-season garments to discount retailers such as TK Maxx – was considered a risk to the brand’s reputation.

Rental platforms are also expanding to more prosaic product areas – everyday necessities including reusable nappy rental schemes and furniture rentals. Founded in 2016 with the aim of connecting renters with lenders, Fat Llama partnered with John Lewis to kit out those who suddenly found themselves working from home, providing items such as desks, which are available in stretches from three to six months. US furniture rental platform Feather stylishly furnishes the flats of city dwellers. Meanwhile, Rise Art will ensure those bare walls get an upgrade, giving customers access to four-figure-and-up artist prints and photographs for under $100 a month.

If you’re willing to rent your wardrobe, your sofa and your toddler’s LEGO sets, why not rent cosmetics, too? US skincare brand Ace of Air, co-founded by model Petra Němcová, is betting people will. Launched in February 2021, it requires its customers to rent the initial packaging for products (from $2), which is then sent back to be refilled, for a zero-waste service.

When bricks and mortar fashion brands work to reinvent themselves after the pandemic, they will have to adapt to a new set of rules to remain competitive, as consumers increasingly value sustainability and value-for-money. “That lends itself naturally against a kind of thesis of ownership and into more sharing ways of consumption,” Phan says. “We’re on the precipice of a fundamental change in consumer behaviours.” 

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This article was originally published by WIRED UK

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