Designer Rental Services Threats and Opportunities

June 11, 2010 by Abigail Zhu  
Published in Fashion

Threats and opportunities that are associated with the development of designer rental services for the designer fashion industry.

As consumers have the tendency to believe that they are entitled to have the best things in life, there is a growing market for rental luxury goods as not many of these consumers have the ability to purchase a lifestyle that is beyond their purchasing power. (Evers 2006) “Now, instead of consumers having to trade down expectations to mainstream versions of luxury products, or forgoing essentials to afford one premium brand” (Evers 2006, p8), they can rent the luxury  goods they want, whenever they want.

BAG BORROW OR STEAL, SAC DE LUXE and FASHION HIRE are some examples of companies that rent designer fashion items, providing value to consumers who want the associated affluence, glamour and status, that accompanies designer fashion, but are either lacking in purchasing power or reluctant to purchase an item they think might be passé the next fashion season.

The following are threats and opportunities that are associated with the development of designer rental services for the designer fashion industry:

  •   Threats:
    • If there are more consumers who are willing to rent rather than purchase designer fashion items, sales for designer fashion companies may drop.
    • The once exclusiveness of certain designer fashion items may be lost on consumers as more designer fashion rental companies make these easily available to consumers. As a result, the perceived value of the brand of the certain designer fashion items may decline amongst consumers, resulting in fewer sales.
    • As most designer fashion items are produced in limited quantity, if designer fashion rental companies manage to purchase most of the stock, it may limit the amount that consumers who wish to purchase the items can purchase, resulting in dissatisfaction as majority of the designer fashion would be available for renting.

 

  • Opportunities:
    • The market for rental luxury goods is growing (Tan 2007), with more companies providing such service, as there is an increasing amount of consumers who want the associated affluence, glamour and status, that accompanies designer fashion, but are either lacking in purchasing power or reluctant to purchase an item they think might be passé the next fashion season. Thus, they look to renting instead of owning designer fashion items.
    • Being easily available and accessible through the web, such rental services reach out to a wider target audience globally as consumers are more tech-savvy nowadays. The use of the internet enables consumers to be more aware of upcoming designer fashion items, and may even heighten consumer awareness and interest in new lines of designer fashion items.
    • Renting designer fashion services may also discourage consumers from purchasing imitation designer fashion items, as they can afford the genuine designer fashion item, even if it is only for a period of time.

 

 

References:

Barlyn, S 2008, ‘The skinny on handbag-rental services’, Wall Street Journal – Eastern Edition,  Vol. 252, Issue 20, pp. 2.

Evers, R 2006, ‘It’s nice to share’, Brand Strategy, May, pp. 8.

Fenton, S 2008, ‘China’s rich have insatiable appetite for haute couture’, Reuters News, 29 May

Han, J 2008, ‘Pocket-pinched opt for rental luxuries’, Korea Times, 4 July 2008

Maslow, A H 1943, ‘A theory of human motivation’, Psychological Review

Tan, C L L 2007, ‘Nice dress – is that a rental?‘, Wall Street Journal – Eastern Edition, Vol. 249, Issue 111, pp. 1-8.

Bag Borrow or Steal, viewed 21 August 2008 <http://www.bagborroworsteal.com>.

Fashion Hire, viewed 21 August 2008 <http://www.fashionhire.co.uk>.

Sac Deluxe, viewed 21 August 2008 < http://www.sacdeluxe.fr>.

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