This weeks discussion topic is relevant to a number of chapters that we have covered in this class: consumer behavior (Chapter 4), market segmentation (Chapter 8), services marketing (Chapters 9 and 10), and pricing (Chapter 11).
Clothing rental is relatively a new attempt by clothing companies to get consumers to rent, rather than purchase, clothing is a fascinating phenomenon. Urban Outfitters is the latest clothier that is jumping into clothing rental, trying to tap one of the fastest-growing areas of fashion without discouraging customers from shopping at its stores. The new business, Nuuly, will be run as a separate entity. There will be over 100 brands for rent with 1,000 styles. Rent the Runway, a pioneer, has been in operation since 2009 and offers over 450 designer brands, 20,000 styles and hundreds of new styles added weekly. Nuuly will focus on lesser-known brands to set them apart. Fast fashion, online shopping, and Instagram are the driving force behind the rental market. It is growing by more than 20% annually. Nuulys objective is to attract new shoppers and increase purchases by current ones. The goal is to add 50,000 subscribers and $50 million in annual revenues. Rentals involve infrastructure for dry cleaning, laundering, and shipping.
Mall retailers are also joining the rental trend. Ann Taylor and American Eagle rent clothing using CaaStle which handles the web platform and logistics. Rental can be more lucrative than selling clothes. Fashion and lifestyle consultants, data scientists, and product / supply chain managers have been developing service models to deliver clothing rentals anytime and anywhere, as needed, comparable to service delivery by Dominos Pizza.
1. Discuss the reasons why people would prefer to rent clothing as opposed to buying. Explain how a clothing rental service works.
2. Do you thing renting clothes is a fad or here to stay? Explain the reasons why clothing rentals are a growing market.
3. Discuss clothing rentals business model and service structure. Can you think of other products or services that might adopt a similar business model?
Urban Outfitters to Start Renting Clothes (Links to an external site.)Links to an external site.
By Khadeeja Safdar
May 22, 2019
The Wall Street Journal
Urban Outfitter’s Plan to Jump Into the $1 Billion Clothing Rental Business (Links to an external site.)Links to an external site.
By Anna Meyer
May 21, 2019
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