The future will see as many consumers renting merchandise as buying it, panelists predicted at an ICSC New York Deal Making panel. “We believe that half the closet will be owned and half will be rented,” said Gabby Etrog Cohen, senior vice president of brand, communication and business at Rent the Runway, which provides apparel and accessories. The company, founded about 10 years ago, now furnishes everyday designer clothing to thousands of subscribers.
The same goes for home furnishings, said Kendra Ovesen, head of merchandising at Feather, a subscription furniture business. She predicts half of future retail transactions will involve renting. “The world is changing,” she observed during the How Resale & Rentals Are Changing Retail panel.
These changes are national and generational, said Ovesen. “The American Dream has changed; it’s really not about the white picket fence anymore,” she said. Moreover, a younger generation is more mobile, she noted, and its members do not wish to be encumbered with possessions as they move from job to job and from location to location.
Gaby Etrog Cohen, Kendra Oversen, Philippe Lanier and Michelle Zhao
There is also a strong environmental argument for renting. Feather notes on its website that some 9.7 million tons of furniture winds up in U.S. landfills annually, according to the Environmental Protection Agency, the equivalent of a couch thrown out by each person every year. It is much better, argued Ovesen, that furniture be recovered and reused by someone else. Rebag — which buys, sell and exchanges gently used luxury bags — makes the case that handbag reuse similarly consumes fewer resources.
Though all three companies rely heavily on the internet for listing their inventory, Rent the Runway and Rebag have extensive brick-and-mortar ambitions, as well. Rebag is looking for spaces that measure about 2,000 square feet and are exposed to healthy tourist traffic, said vice president of retail expansion Michelle Zhao. “We see a halo effect every time we open a location.” She noted that each new store drives a surge in online business.
Rent the Runway wants to make picking up and dropping off as convenient as possible for its growing customer base. This drives traffic that benefits the other tenants, as well, Cohen observed. Rent the Runway also is putting drop boxes in Nordstrom department stores and at WeWork office complexes. And a recent deal means W Hotels guests can have apparel from Rent the Runway waiting in their rooms.
Philippe Lanier, principal and vice president of Washington, D.C.–based Eastbanc, wondered aloud whether Nordstrom, though, views Rent the Runway as a competitor. Absolutely not, Cohen said, explaining that it would be “foolish” for any retailer to assume tomorrow’s customer wants to own his or her clothing in perpetuity.
By Edmund Mander
Director, Editor-In-Chief/SCT
