Eased Covid-19 Restrictions Raise Optimism at Clothing Rental Services

Rental-mageddon seemed inevitable when Covid-19 wiped weddings, music festivals, and corporate conferences from the calendar in 2020. Those IRL events could call for multiple outfit changes—back-to-back Zooms, not so much.

Closet check: Rental services took some tough hits, but they weren’t rendered obsolete. Closet share companies told Retail Brew that over the past year, consumers shifted from renting the runway to renting for their home hallways.

• At Nuuly, Urban Outfitters’ rental service, 2020’s top performers included sweatshirts, joggers, and waistless dresses. “One of our sister brands, Free People, has an amazing casual assortment, so we were able to react quickly there,” David Hayne, Nuuly president and CTO at URBN, told us.
• Christine Hunsicker, CEO of rental tech platform CaaStle, told Retail Brew that renters across its services developed the same casual preferences as shoppers.

Category check: Joshua Luft, CEO of children’s subscription rental platform Everlasting Wardrobe, told Retail Brew requests from parents for comfortable kids' clothing steadily rose across its 300+ brands.

• Children grow regardless of prevailing trends, Luft said, and parents see rental as a way to dress their changing kids without spending a fortune.
• Last year, brands sent excess inventory to Luft’s platform for free. The goal: to use apparel they couldn't sell to build brand awareness with rental clients.

Men’s rental also gained momentum in 2020, Hunsicker told us—so much that CaaStle extended its partnership with Express to include menswear in September. “On average, [men] stay with the service longer and are more focused on rotating pieces,” she said.

Hot rental summer

Rental companies are just like us: After months in the same groutfit, they’re finally ready to dress up again. Memberships at rental services are ticking up alongside formal apparel sales and travel plans.

• Hayne told us Nuuly has noticed “considerable improvement in subscribers” since the winter. Interest in dressier dresses is trending up.
• Luft said Everlasting Wardrobe has recorded “continuous growth,” though he declined to provide a specific membership count.

Driving the trend: “Rental services deliver a real value proposition to consumers looking to get dressed without making commitments to a post-pandemic wardrobe,” Hunsicker told us.

Jessica Ramírez, retail research analyst at Jane Hali & Associates, added that as shoppers are more mindful of sustainability, “we believe rental and resale will continue to gain momentum with brands.”

What retailers gain: “Even throughout the pandemic, we have found that once consumers join a service, they are highly loyal,” Hunsicker said. And more loyalty = more consistent monthly revenue = higher e-comm retention, no matter the category.