How does the future of renting luxury fashion business look like?

The rise of many fashion rental companies is proving that the sharing and sustainable economy is taking over the luxury landscape. This new consumption model has taken the fashion world by storm, and many big investors are putting their money in this business. Renting luxury fashion is a very lucrative business, and you can use technology and create a web-based platform to connect with users.

It’s not just women who are using these fashion subscription services. There are many rental companies catering to men’s clothing also. According to a report by PriceWaterhouseCoopers, the sharing economy is expected to be worth $ 335 billion by 2025, and the luxury fashion rental market is going to grab a major chunk of that share.

You can start a business of renting luxury fashion, by working out a subscription-based model. This will eliminate the need for the buyer to purchase the accessories or apparels, and make high-end brands accessible to all. From shirts and skirts to dresses, bags and shoes-the options are endless, and anyone in India can borrow them for a fee. Isn’t the business idea exciting?

1. Reasons behind the shift to luxury fashion subscription

One of the major reasons for the growth in the luxury rental business is a culture shift and the explosion of disposable and fast fashion. Access is the new ownership, and renting a luxury piece removes the burden of physically owning that piece. It is a great money-saver and a very easy process.

Most people actually use around 20 per cent of their wardrobe. So, renting, instead of buying is a good option for customers. After using the clothes for a special occasion, you send it right back-it won’t clog your closet. There are a lot of options and price points for customers now, with many companies vying for their attention.

2. How does a luxury fashion rental business work?

You have to keep yourself abreast of the latest trends in fashion and know what is cool right now. You should also have a deep understanding of the customer.
You can have a one-time rental plan, where a customer can rent an outfit for a specified number of days. Or, you can have a subscription-based business model, where a customer can get 3-4 clothes, and keep them for a month or so.
You can get in touch with your customers on social media like Instagram or Facebook.
The business model is a fee-based one, where you will charge a percentage of the price of the item as rent.
It usually ranges from 7 to 15 per cent, depending on the brand and the style. This will cover the service charge and other costs like dry cleaning, delivery, etc.
A small monthly payment will appeal to the millennial buyers, who won’t have to shell out a huge amount upfront. Also, it might be a good idea to enable a customer, who likes a rented garment, to buy it at a discount.
In these times of flat retail sales, it will be a win-win situation for you and the luxury brand.

There is a good market for the fashion rental of accessories like luxury watches and leather goods. Ideally, you should offer a combination of clothes and accessories for renting. For example, a handbag might look very chic with a particular dress. So, if a lady customer wants, she can rent the two as a combo.

3. Designer Shoes Renting Business

The fashion rental market for shoes is booming. This is because designer shoes are costly, and people are realising that spending a lot of money on a pair that you are going to wear only a few times, is not a smart idea. Apart from the rental service, you can also provide shoe repair facilities.

4. How to start a luxury fashion rental business?

You can offer a range of luxury brands-from the archival and contemporary ones to the experimental and sustainable. They should be perfect for a special occasion.
When a customer orders apparel, you should try to send it in two sizes-the customers can try and keep the one that fits well.
To differentiate from your competitors, you must invest in branding and marketing. You should have a specific product range for a specific target market.
Consumer data is essential to understanding the customer and is very important in the renting business. You can take the help of algorithms and professional stylists to curate the perfect line.
In our age of social media, people don’t want to be photographed in the same dress twice. So, change is the name of the game, and your collection should reflect it. Apart from fashion, you should have a deep understanding of the customer, logistics and technology as well.
You have to find out who is your target customer. For instance, it can include the demography of women who don’t visit designer stores but would like to possess a luxury item.
You have to sign on high-end designers, whose brands have got an aspirational value and also makes people look beautiful. Also, there should be a lot of styles at different price points.
Remember that when people, especially women, rent instead of purchasing a garment, they tend to get more experimental. For example, if your target customer is a college girl, then a sequinned dress with a fashionable design will do better than a plain one.
If you are into the luxury fashion rental of handbags, be sure to stock them in different sizes-women generally use a smaller handbag for going to a party, and a larger one for a more professional setting.
To start a fashion rental business, you have to invest a lot of money, mainly to stock inventory. Also, a particular style should be available in multiple sizes. Managing inventory can also be a challenge because certain sizes sell off more quickly.
You would need a warehouse to keep the clothes and install a barcoding system to keep track of inventory. You have to process the orders, clean the clothes, and ship them to customers. The rental process should be seamless with return bags and prepaid postage. and your website easy to navigate.
One of the risks in the fashion rental business is that the customers might tear the clothes, or spill coffee on them. So, you must have a tailor to repair the torn clothes and special cleaning solutions to remove the stains. An in-house dry-cleaning facility with a trained spotter will help you to finish the worn clothes very quickly.
In the backdrop of the pandemic, cleanliness should be a priority for any luxury fashion rental business. Any used piece of apparel or accessory should be thoroughly disinfected before it goes to a new customer.
Before you send out any dress or jewellery to the customer, you have to do a final check of whether it is in perfect condition. You should iron the clothes, fold them nicely in reusable packages, and send a pre-printed return label along with it.
Each item of clothing should be separately packed. To make it a hassle-free experience for customers, you can provide free shipping with both ways.
To reduce the risk of theft, you can ask for a photo-id of the customer. Also, the membership fees that you will charge upfront, should cover the cost of the items that you will be sending out.

It is important to get feedback from your customers and be sure to add this column in your webpage. You can feature user-uploaded photos of dresses, to give other customers an idea of how the dress will look on them.

5. How do fashion rental companies help designers?

Your luxury fashion rental company can form an alliance with other designer brands. You can work directly with fashion designers, and report to them about the popularity of any item, and also provide data about your customers. You can inform the designers if any customer has some special requirements.

Subscription-based businesses are all around us. With movies it is Netflix, and with apartment sharing it is Airbnb. Similarly, renting is the future of luxury fashion, and this business has a lot of potentials. Apart from making profits, you can also make someone feel beautiful and happy, by experiencing a piece of luxury.

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