Report: Clothing rental market to grow by 3 billion dollars from 2021 to 2026
Technology research and advisory company Technavio released a report on the growth of the clothing rental market, pointing out its estimated increase by 3 billion dollars from 2021 to 2026 and highlighting key findings on this development.
Vendors have latched onto experiential marketing as a beneficial tool, actively involving the consumer in their strategies, such as live marketing, participation marketing, and loyalty and event marketing, which seem to generate more purchases for online (sale and rental) fashion platforms according to the report. A big key factor in the rising numbers are in this context Millenials and their engagement.
A crucial obstacle slowing down the rental market’s growth will be accurate and timely inventory management. Logistic systems will need to be able to keep up with high demand and returned items. Not to forget the element of checking garments for damages upon return in order for the customer to be traced back and held accountable. A record of SKUs for clothes of different categories, such as new, old, damaged and ready for laundry items, needs to be set up.
The market has been split up into the two categories - end-users and geography - by Technavio and further segmented into women, men and children and APAC, North America, Middle East and Africa, Europe and South America.
The report explains that the women’s segment will contribute significantly to the market’s growth. This is on the one hand due to the fact that women prefer to select outfits depending on the occasion. However, as this specific wear is within a higher price range, they prefer to rent selected items instead. On the other hand, the number of bought products being returned by women has risen as stated by a number of branded clothing retailers.
Last but not least, a growing amount of working women are boosting the demand for online luxury apparel which is connected to their busy lifestyle and their preference to shop digitally.
Geography-wise, it is worth mentioning APAC’s input to the market’s growth, which is expected to contribute to 44 percent of it during the forecast period, rising faster than in other regions. This is attributed to the strong interest in affordable fashion and a wide range of available products.
The selection of global and regional vendors offering rental options, results in an overall scattered market at present. Examples of prominent brands are Urban Outfitters, TheDressBank, Wrapd, and Girl Meets Dress, among others.
A promoting factor is the growing e-commerce market in the fashion industry and consumer’s preference to shop online due to broader product selection and convenient delivery options. Rental services are currently offered by both existing brands as well as startups.