Is Online Rental Retail Threatening Stores?

Cindy Ciura talks about the changing apparel scene.

There’s a dramatic change occurring in the apparel business as customers buying habits are shifting toward “renting clothing.”  What was once very small business- a $1 billion dollar industry (less than 1% of the total apparel market in 2017) has grown into a $24 billion dollar business in less than 2 years!  While the structure of this business varies, most customers pay a $89-$159 fee per month to wear borrowed clothing.

The interesting fact is that much of the sales for this emerging trend is in the luxury goods area.  And ninety percent of luxury goods sales still occur off line.  Now there is a growing demand for new brick and mortar stores all over the country to keep up with this new way of purchasing clothes for women, men, children, and perhaps the home category.

Two brands that have become leaders in this movement are The Real Real and Rent the Runway.  The Real Real currently has 10 stores and will be adding 7-10 stores per year.  Rent the Runway has 5 locations with plans to open many more, and is currently setting up shop inside Neiman Marcus stores and We Work locations.  Dozens of other companies are popping up: Poshmark, Thread Up, ReBag for purses, and the list goes on.  And to showcase the immensity of this new business, San Francisco-based fashion rental service, Le Tote, just purchased the operations of all Lord & Taylor stores from Hudson Bay Company.






So, the future of fashion, both financially and environmentally, is the ability to try new styles and brands, without a buying commitment.  And to the delight of us in the retail world, it offers a new range of opportunity.

What does this shift in rental clothing do to the already changing habits of the consumer where shopping habits and falling prices have been affected by the impact of Amazon and others?  To those of us in the retail world, the one certainty that we can always rely on is change.  Our industry will continue to evolve, and will likely be a mix between on-line and brick and mortar sales experiences-whether new merchandise or rentals.  But one thing is for sure, never underestimate the impact of the tactile shopping experience.  While shopping online is convenient, it can never replace the immediate gratification of touching and feeling a garment that you can immediately take home with you.  And that is the reason that you are seeing on-line companies looking for brick and mortar locations.


With over 25 years experience in the real estate field, Cindy Ciura has been involved in some of the country’s most high profile retail developments and urban revitalizations. Cindy has been named one of Real Estate Forum’s Top Women in Retail Real Estate. She has been recognized as a professional whose achievements have made her a standout performer across the retail real estate spectrum, including development, investment, brokerage, management and in-house retail real estate executives.