The share economy is all around us. From a stranger’s spare bedroom to their under-used car, it seems those of us seeking convenience, value and flexibility seem willing to explore new ways of consuming goods and services. The business model is catching on in a variety of sectors and the number of start-ups entering the market with novel ideas is booming. So, what next?
My top tip for 2018 is retail fashion. Since it was set up in the US nine years ago, Rent the Runway has been a huge success and continues its impressive expansion. The concept was straightforward – adapt their traditional formal wear rental business to everyday fashion items, offering subscription packages that allow a fixed level of consumption each month for a flat-rate fee. The company even managed to enlist Beyoncé in its marketing campaigns, the star being one of the first celebrities to endorse a clothing rental service and select its new season fashions for it. The result: turnover of around 100m and a declared aim to cause major dents in the profitability of rivals Zara and H&M.
Could it catch on here? It certainly could and it’s already beginning to happen in London. A survey for the FT recently found that 20% of consumers in the capital were willing to sign up for an ‘all-you-can-wear’ deal and outlets are beginning to appear. Typically, subscriptions are being pitched at an impressive £200 per month, for which consumers have unlimited access to clothing and accessories at a rate of four items at a time. It’s anticipated that the potential market for more niche segments (e.g. plus sizes) is likely to be huge, too.
If renting clothes seems unlikely, think again. That’s exactly what they said about the Airbnb model and others. Consumers love to signal, both for status displays and to attract a mate, and quick access to the latest fashions fits the bill perfectly. This will be a key growth area in retail fashion over the coming year, though in the UK this is more likely to be a threat to budget chains such as Primark more than Next or River Island as those consumers most receptive to the idea here are those who currently opt for bottom-end items they view as disposable.
Not so much the ‘throw away’ society, more the ‘take back’ one perhaps Question is – whatever next?