Hire or buy clothing?

Two US entrepreneurs set the trend in motion when they opened Rent the Runway, a designer clothing-for-hire business in 2009. The idea was to offer women (and, later, men) the opportunity to hire a fancy outfit for several days, at a fraction of the purchase price.

The one-time hire price includes shipping plus cleaning as a complete package. Just choose an outfit, click to hire and return postage-free after the special occasion. Rent the Runway and other US rivals also offer subscription pricing, so customers can choose a certain number of everyday outfits per month at one low for-hire fee. In other words, for-hire isn't just for special occasions.

Now clothing for hire is going global. UK businesses that offer designer frocks include Girl Meets Dress. 'Customers had never hired before, so the main thing was getting them to do this', says Girl Meets Dress founder Anna Bance, whose data systems had to account for the time clothing spends in transit and in cleaning between hire periods.

In Australia, GlamCorner offers women's designer clothing for hire. The company, founded in 2012, markets via email and digital campaigns. It's experienced significant growth as more customers try for-hire clothing and appreciate the benefits.

In China, YCloset is growing as it educates the market about the benefits of clothing-hire and erases doubts about wearing clothing previously hired by others. A social-media influencer recently created a viral video in which she visited YCloset's cleaning facility, to reassure customers that any clothing they hire will be quite clean and presentable. Will consumers choose to hire more clothing or will they remain committed to buying?

Updated: Fashion for hire

One increasingly important aspect of pricing strategy linked to changing customer behaviour is the option to hire rather than buy. In Chapter 7 of Essential Guide to Marketing Planning, I profiled two high-profile high-fashion hire businesses. This post updates the mini-case on p. 131.

• Rent frock Repeat is based in Canada and markets fashion frocks and accessories for hire online. Like US-based Rent the Runway, Rent frock Repeat operates store showrooms for personalized attention and rentals. The company plans a third showroom and also offers Skype consultations, not just phone conversations, for customers who want to ask questions face to face. When customers know they'll need a certain outfit for a certain day, they can reserve that item up to four months in advance. Looking for ideas? Check the firm's Pinterest boards.
• Rent the Runway began in 2009 as an online-only marketer of for-hire upmarket fashion and accessories. Today it operates stores in Chicago, Las Vegas, New York and Washington D.C. One customer, browsing in Chicago, commented: 'This is a procrastinator's dream!' In fact, the stores offer in-person appointments with stylists who can help customers identify suitable fashions and demonstrate how to create an outfit for a special occasion. With weddings, graduations and other celebrations on the May and June calendars, Rent the Runway provides a cost-effective alternative to buying clothing that will be worn only once or twice. The company's busiest day is Wednesday, when it receives returned dresses from the previous weekend, cleans them and repackages them for the next set of weekend customers. Of course Rent the Runway has an iPhone app (see above).