24 Jan, 2023 Rising awareness of sustainability will drive apparel rental market by 101.2% to $9.9bn between 2022 and 2026, forecasts GlobalDataPosted in Retail
As consumers strive to reduce their fashion consumption to become more sustainable, they are becoming increasingly involved in the circular economy. More are turning to rental operators like Rent the Runway and Hirestreet, rather than purchasing brand new items that they will only wear once, with 8.6% of UK clothing shoppers renting apparel for Christmas 2022*. Consequently, the market is expected to grow by 101.2% between 2022 and 2026 to reach $9.9bn, forecasts GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Global Apparel Rental Market & Forecasts to 2026,” reveals that between 2016 and 2022, the rental apparel market grew by 89.3% to $4.9bn.
Pippa Stephens, Apparel Analyst at GlobalData, comments: “Though rental suffered during the COVID-19 pandemic as events were cancelled so consumers had little reason to rent occasionwear, the boom in weddings and other formal occasions in 2022 hugely boosted demand, with spend rebounding above pre-pandemic levels.
“The emergence of new rental platforms like By Rotation and Nuuly since 2019 has also driven the apparel rental market’s growth over the past few years, alongside the fact that many operators have started to introduce other product segments which are worn infrequently or have a short life span, such as skiwear or childrenswear. More brands and retailers are also getting involved, including H&M, which introduced rental to its London flagship, and Flannels, which launched its own rental platform, both in November 2022.”
Rental platforms also offer consumers a way of accessing more expensive brands that they cannot afford to buy from outright. This is particularly appealing given the cost-of-living crisis as consumers cut their spend on apparel, with 66.0% of UK consumers citing this as an important driver when renting apparel for Christmas 2022*.
The ongoing inflationary pressures also create the opportunity for more platforms to introduce a consumer-to-consumer (C2C) option, allowing consumers to lend out products that would usually be left unworn in their wardrobes to make extra money.
Stephens concludes: “The rental market is expected to experience strong growth out to 2026, as awareness of rental operators rises, and renting becomes normalised. However, it will be limited by hygiene and fit concerns, as well as rental’s focus on occasionwear and formalwear, which have both fallen out of favour among consumers because of the casualization trend. It is also often difficult for operators to become profitable, due to high delivery, maintenance and cleaning costs, meaning it is likely that some players will struggle to survive.
“These limitations will hinder the potential of the rental market, with resale remaining a much more popular circular shopping method due to being more accessible and established, with spend forecast to reach $338.4bn in 2026.”
*GlobalData’s UK monthly survey of 2,000 nationally representative respondents conducted in January 2023.