Brands Must Prioritize Sustainable and Affordable Options to Entice New Shoppers
CGS, a global provider of business applications, enterprise learning and outsourcing services, announced findings from its 2019 Future of Fashion & Retail Consumer Survey affecting the apparel rental market. The results show that the sharing economy is disrupting fashion and apparel brands – start-ups and established – as well as the retail industry, as they enter the rental subscription services business.
A number of brands and retailers introduced apparel rental services this past year, yet consumer adoption rates remained low. Of the more than 17,000 consumers surveyed, only three percent have used a rental service. Many consumers (39 percent) did not understand or were unfamiliar with these services, and another 19 percent believe they are too expensive. Despite these findings, the survey found a tremendous opportunity for brands willing to address the interests of their customers and provide affordable options.
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When looking at the 1,000+ consumers that have used rental services, they noted several reasons for exploring secondhand clothing options:
Sustainability and Affordability for the Secondhand Clothing Market
Consumers are seeking secondhand clothing due to a desire to find affordable options (41 percent) and to be more environmentally friendly (13 percent). The younger generation is even more likely to prioritize sustainability as a reason to buy secondhand items. In fact, 64 percent of Gen Z consumers would pay more for sustainable products. As brands look to master the emerging rental services market, they must consider demographics such as age, gender and location for attracting the most likely users of the service.
Sharing Drives the Apparel Rental Trend
The ridesharing market (e.g., Uber and Lyft) continues to grow rapidly. A survey of U.S. citizens found that 36 percent of people used ridesharing services in 2018. The consumer willingness to share rides is translating into a willingness to embrace other shared models, especially in the retail space. The CGS survey found that 79 percent of consumers using rideshare services were also willing to pay $50 or more per month for a clothing rental service. Brands should market rental apparel services to sharing economy consumers as a way to grow business, and long-term brand loyalty.
Holiday Season and Formal Events Bring New Rental Services Opportunities
With the holiday season right around the corner, a new wave of potential rental services customers will be entering the market. Of the consumers surveyed, 36 percent are most likely to rent apparel for formal events such as holiday parties and weddings. For these consumers, these rental services present the opportunity to try out a new brand (31 percent) or luxury item (23 percent) for the first time. Renting can also be a direct path to new customers: 45 percent of respondents voiced their consideration for buying an item after renting it. Brands should ensure they’re heavily marketing rental options as a way to generate new interest in their products.
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“Consumer expectations are changing, and our survey results reinforce that apparel brands must find new ways to encourage brand loyalty,” said Paul Magel, President, Business Applications division, CGS. “Take Gen Z consumers for example. These individuals are used to rental models – whether that’s Netflix or Airbnb – so marketing sustainable and eco-friendly options in a rental format is the perfect way to engage them. Whether it is a wholesale or retail brand, the transformation in the fashion and apparel market requires next-generation technology to support the supply chain. From inventory management and consignment to order allocation and fulfillment, CGS has a history of partnering with customers to guide them through these ever-changing trends and opportunities.”
The CGS BlueCherry Enterprise Suite provides clients with a powerful, comprehensive set of tools to drive their fundamental business processes. It focuses on the needs of high-growth organizations operating in the consumer lifestyle products, retail and apparel industries. The BlueCherry Enterprise Suite’s built-in capacity addresses the needs of all core management, planning, product development, manufacturing, logistics, finance and sales functions.