Can Clothing Rental Recover From COVID-19?
All previously worn clothing is not created equal in the coronavirus era. Resale is booming, and rental — not so much.
For years, sustainability experts have touted rental and resale as eco-friendlier modes of consuming fashion. With a deadly disease ravaging the nation, once bustling thoroughfares reduced to ghost towns, and a long-overdue racial reckoning sweeping all corners of industry, one question looms large: Who has the appetite to shop, let alone the focus to do so more ethically?
Certainly enthusiasm for new threads has waned as shoppers focus on more important issues. Months of shuttered storefronts, vaporized foot traffic, and shrinking discretionary incomes have conspired to bring even formerly recession-proof giants like H&M and Zara owner Inditex to their knees. Clothing sales have nosedived 63% from a year ago. Pandemic-driven forces have pushed tens of millions of Americans out of their jobs, and with everyone tightening their belts and stocking up on essentials, toilet paper drops have become the new sneaker drops. Even people with the mental wherewithal for retail therapy are buying fewer clothes because they’re stuck at home with nowhere to go. Until there’s a COVID-19 vaccine, every night is Netflix-and-chill night.
“I’m definitely not thinking about what I wear as much as I used to,” says Olivia Begalla, 18, who just graduated high school in Florida. “Where am I going?”
You’d expect people to feel less eager about rental and resale, too, and for the most part, you’d be right. Conventional retail is poised to tumble by 23% this year, according to analytics firm GlobalData. The clothing rental market — that is, companies like Rent the Runway, Le Tote, and Gwynnie Bee — is expected to tank by nearly 50%. Secondhand clothing sales, as a whole, are facing a decline of 13.3%. The bright and perhaps surprising spot is online thrifting, which in isolation — that is, teased apart from offline secondhand like Goodwill et. al. — looks to tick up 22%.
Neil Saunders, managing director of retail at GlobalData, expects rental and resale’s trajectories to diverge even farther as the pandemic progresses. Even as lockdowns ease in certain parts of the country and people get the shoppies again, rental may struggle to close the gap. “The trends are very firmly against it because a lot of rental was for occasions, was for work, and of course those two things aren’t normalized at the moment,” Saunders says. “People aren’t going out to socialize like they once did. Most of us are working from home in some form or another, or even if we’re going into the office, we’re not going out for work-related events and conferences and things.”
Meanwhile, resale sites boast double- even triple-digit growth.
In contrast to the rental market, online resale is doing brisk trade, in part because furloughed-at-homers and the newly jobless are using the extra time to KonMari their closets in search of a small spark of joy — and perhaps some extra pocket change. They can get that from virtual consignment stores like ThredUp and ReBag, which are facing a deluge of stock, not only from these castoffs but also unsold inventory from boarded-up stores with no other outlet. (Poshmark users alone now share 60 million listings daily, up from 30 million before mid-March; at Depop, listings have leaped 150% since April.)
For cash-strapped bargain hunters, these are halcyon days, when they can snag deep discounts on new or like-new products they’ve had their eye on, especially investment pieces like handbags or watches they can resell down the road. Birkins have proven especially pandemic-proof, as desire for so-called “high-value” handbags, according to luxury consignment store The RealReal, have jumped 20% month over month. Demand for men’s vintage watches has ballooned 184% year on year. Sales of statement earrings, necklaces, and Hermès silk scarves — perfect for flaunting during video chats — have similarly spiked. “Resale gives [consumers] the ability to buy products at lower prices, and to get good discounts on brands that they might want,” Saunders says. “We've seen this in the wider economy; it’s one of the reasons why off-price retailers have done so well as things have opened back up.”
Indeed, resale platform representatives I spoke to, including those at ThredUp, Depop, Poshmark, and Vestiaire Collective, all bragged about double- to triple-digit growth in the past few months. COVID-19 is only accelerating a prior trend of ascendant growth. In 2019, resale grew 25% faster than the broader retail sector to hit $29 billion, GlobalData has noted. As traditional retail continues to cede ground, resale is expected to quintuple in market share over the next five years. By 2029, the firm predicts, resale will surge past $80 billion in value, outpacing fast fashion’s estimated $43 billion for the first time.
Sustainability is frequently cited as a key consideration in the recent embrace of resale, which makes sense because the trend’s leading adopters — Gen Z-ers born between 1997 and 2012 — are characterized as being more “woke” about social and environmental issues than even their already-more-progressive millennial forebears. Studies consistently show, however, that cost and value remains the No. 1 motivation for resale’s acolytes. That’s not to say saving clothing from the landfill doesn’t matter — it does. It’s just that people like Gen Z-ers have fewer cash reserves to tap into. With a painful recession on the horizon, budget-friendlier prices are going to give resale a significant leg up.
Contamination concerns and empty calendars conspire against the rental model.
How rental performs depends on a slew of unpredictable factors: How soon will lockdowns end? Will we be returning to our offices? Will events like bridal showers and cocktail parties slide back onto our schedules?
Hygiene concerns may stymie rental’s recovery, too, since contamination is top of mind for so many, and cleanliness had begun raising eyebrows even before the pandemic reared its head. A 2019 Mintel survey of 2,000 American Internet users aged 18 and up found that 55% were iffy about the sanitary nature of secondhand and rental products. The number is liable to be higher now that we’re practically embalming ourselves in Purell.
Although the U.S. Centers for Disease Control and Prevention says it hasn’t found cases of the coronavirus being transmitted through contaminated clothing — absorbent textile fibers appear to cause the contagion to dry up faster than it does on hard surfaces — not everyone is comfortable taking that chance. A secondhand blouse might have one, maybe two previous owners, compared to a rental blouse that likely passed through significantly more hands. For deal chasers buying that top through a peer-to-peer platform, being able to put a name and face to the preceding wearer may allay their worries. With its built-in system of anonymity, rental offers no such balm.
“I think that's really going to be a barrier for participation and for growth going forward for rentals,” says Alexis DeSalva, senior research analyst at Mintel. “Consumers are going to want to have some type of control over what they're buying, and what they're bringing into their home.”
The hassle of having to return an item before you can check out another may also be a turnoff for some people, like Leah Walkiewicz, 26, a product manager for Square who lives in New York City and prefers to shop vintage because she feels like she’s supporting small businesses. With its more complicated logistics, rental creates another stress point: “I’m still not comfortable getting on public transportation,” Walkiewicz says, noting she doesn’t live within walking distance of a UPS store or Rent the Runway return location.
So what's a subscription service to do?
Rent the Runway, Urban Outfitters’ Nuuly, and CaaStle, the logistics platform that powers such clothing subscription services as Vince Unfold and Infinite Style by Ann Taylor have ramped up communications assuring customers of the germ-squashing efficacy of their cleaning and steaming processes. They’re tightening up precautions at warehouses, where workers are required to socially distance and wear personal protective equipment like masks and gloves. They’re minimizing human-to-human touchpoints. And they’re keeping their fingers crossed that customers who paused subscriptions at the start of the outbreak will filter back once they get a handle on our new normal.
“All our garments, accessories, hangers, and reusable packaging are meticulously cleaned and steamed each time they are returned to us, and then sealed in plastic to protect them from any elements — including human touch — that they may encounter in transit to the next customer,” Jennifer Hyman, CEO of Rent the Runway wrote in an email.
Representatives for the companies I spoke to declined to provide specific membership numbers, but some say they’re beginning to see a slow-but-sure increase in reactivations. Subscribers recognize the “value proposition” of rental, says Brendan Hoffman, CEO of Vince, which operates Vince Unfold, i.e., a way to get the shopping “high” of receiving new clothes on the regular without spending a lot. “I think the longer quarantine lasts, the more people will crave some semblance of normalcy,” Hoffman says. “And for us that presents an opportunity.”
“Opportunity” is the operating word, says Melanie Shreffler, vice president at Cassandra, a trend forecaster that focuses on millennials and Gen Z. “We’re starting to see this a little bit with young people who have gone so long without being able to get dressed, so they’re creating opportunities, even if it’s just five friends getting together to have a mini-party that they’ll take to the nines,” she says. “So there’s an opportunity for rental companies to shift their messaging from, ‘Hey, you’ve got a big event coming up’ to, ‘Aren’t you bored of wearing the same thing every day?’”
Ashlee Wisdom, 30, the founder of a healthcare startup in New York City, is one of them. In the Before Times, she was a self-described “heavy user” of Rent the Runway’s $160-per-month “unlimited” tier. When she started sheltering at home, she put her membership on pause. “It just didn’t make financial sense [to continue] because I wouldn't be using it as often,” she says.
But Wisdom found herself missing her membership — and dressing in something other than sweatpants. She’s restarting her subscription so she can look pulled together for Zoom calls and the growing number of virtual events she’s booked for without blowing her budget. “I’m like, OK, I can’t wear the same top over and over,” she says. “So I’m going to start renting blouses.”
Ashley T Brundage, a 40-year-old Florida resident who speaks to organizations about equality, leadership, and inclusion, never gave up her Rent the Runway subscription. In fact, she’s been wearing it out — literally — as her training services find bigger audiences online. “For me, it’s all about the attitude behind [a look]; I want to really feel like I’m there.”