Renting isn’t just for your prom clothes anymore.
Customers have flocked to the startups’ offerings. Rent the Runway reached its annual goal of $US100 million in sales last November, according to Forbes. As of January, The Black Tux was doing $US2 million in sales a month with a two-fold increase year over year.
It seems that shoppers are increasingly seeing renting as a good opportunity to step outside of their normal style, or to obtain a fancy garment for an upcoming event.
Now department stores, looking for a way to draw in a younger crowd who is more likely to be interested in renting, are partnering with these brands to offer more options to shoppers. In November, Neiman Marcus made a deal with Rent the Runway for a store-within-a-store concept in San Francisco. The Black Tux recently began a trial partnership that calls for the creation of rental locations within six Nordstrom stores around the country.
It’s the first rental partnership for both stores, which are hoping that before and after appointments, shoppers will browse the aisles and walk out with more products than just a rental. The rental companies, on the other hand, are just happy to be associated with well-known, established, and trusted brands that have more locations to service potential customers.
“We’re a purchase people are making for a very important day. We need as much trust as we can possibly get,” Andrew Blackmon, cofounder of The Black Tux, told Business Insider.
Though it may seem that these rental outposts in Nordstrom and Neiman Marcus could potentially steal sales from the department stores’ existing offerings, the startups don’t think that will be the case.
“It’s a totally different market,” Blackmon said. “The price points for [Nordstrom’s] tuxedos are fairly high, so there isn’t really any cannibalization.”
A typical Nordstrom tuxedo carries a price tag of at least $US800, while the store’s private label sells one for $US430. Compare that to The Black Tux, where an average tuxedo rental will cost you $US125.
Blackmon said he sees his competitors as other suiting companies that sell their suits in the $US150 to $US300 range — firmly fast-fashion territory. “A lot of people are using us after having an experience there,” Blackmon said.
Rent the Runway founder Jennifer Hyman told Forbes that she has also seen her customers move away from fast fashion and turn to renting from her company, often supplementing those rentals with buying investment pieces.
“Rent-buy is the new high-low,” Hyman told Forbes, noting that a customer may buy a black dress but rent a hot pink one for a special event.
Fast fashion, which is clothing made and sold cheaply with a condensed supply chain so that it can capture current trends, used to be considered the “low” end of that equation. Since it’s only in style for a season or two at best, fast fashion is often seen as quickly disposable and only worn a few times before being discarded.
It’s being pushed out by rental in these formal categories, however, as the prices are similar, but the quality and perceived quality is miles apart. And if customers are only going to wear the garment once anyway, it makes a lot of sense to rent something that looks and feels better. Plus, the company will take care of dry cleaning.
Both founders agree that customers are looking for quality in the garments they wear, and they’re not finding it in fast fashion offerings. There’s a large gap in price between renting and buying luxury and high-quality garments, which makes rental an attractive proposition.
“I wouldn’t go so far as to say the future of fashion is rental, but I would say rental will be a major component of the future of fashion,” Blackmon said.