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Online Clothing Rental Products Market Size, Share, & Trends Analysis Report (2023 – 2030)
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Report Overview
The global online clothing rental products market was valued at USD 15.9 billion in 2022 and is projected to expand at a CAGR of 21.5% from 2023 to 2030. The rising awareness of sustainable fashion, along with increasing disposable income, is one of the key factors driving the market. Apart from that, the convenience associated with online rental services and the growing millennial population are some of the other factors propelling the market growth.
The increasing demand for rental products from end-use industries such as weddings and events is a major factor driving the market growth. For instance, in November 2021, GlamCorner, Australia’s largest online rental platform for designer fashion, announced a new range of apparel specifically targeted at brides and grooms. Furthermore, increasing demand for rental apparel from the corporate sector is also driving the market growth. Companies are encouraging their employees to opt for rental apparel for meetings and conferences, as it helps to reduce the expenditure on clothing and helps to maintain a professional look.
The growing preference for subscription-based services is also a key factor propelling the market growth. Subscription-based services offer the advantage of renting clothes at a fixed price and provide a huge selection of clothes to choose from. Furthermore, the convenience associated with these services is also driving the market growth. For instance, in March 2022, LeTote, a leading fashion rental subscription service provider, announced the launch of the LeTote Style Lab, a virtual styling service for its customers. This service allows customers to select the clothes and accessories they want, and the company’s personal styling team creates complete looks for each customer.
Furthermore, the increasing trend of sharing and exchanging clothes is also driving the market growth. The sharing economy is gaining traction, with a growing number of startups offering rental services for apparel. For instance, in April 2022, Closet Collective, a startup based in the U.S., announced the launch of an online platform that allows users to rent each other’s clothes. The platform also offers users the ability to rent designer clothes at an affordable price.
Apart from that, increasing investment in the online rental platform and the increasing trend of personalization and customization are also driving the market growth. For instance, in June 2021, GlamCorner announced a series of investments worth USD 5.7 million from various investors, including Blackbird Ventures and Tuhua Ventures. This investment was used to further develop the company’s product line, build a personalized experience for customers, and expand its presence in the market.
Product Insights
The dresses segment accounted for the largest share of the market in 2022. The increasing trend of renting dresses for special occasions, such as weddings, parties, and proms, is driving the market growth. Moreover, the cost-effectiveness of renting a dress is one of the major reasons for the increasing demand for dress rentals. According to an article published by the University of Sydney in April 2020, 62% of people are more likely to rent a dress for a special occasion.
The casuals segment is projected to grow at the fastest CAGR of 8.9% during the forecast period. The growing trend of fashion rental services, such as fashion rental subscription boxes, is driving the demand for casuals. Furthermore, the increasing number of e-commerce websites, such as Rent the Runway and Style Lend, which provide online clothing rental services is also driving the market revenue. According to an article published by The Washington Post in May 2019, nearly 40% of people in the US are using online rental services for casual clothing.
Distribution Channel Insights
The online segment has been dominating the global online clothing rental market and is estimated to account for over 89.2% of the total market share in 2022. The increasing penetration of the internet and the availability of the latest technology, such as augmented reality (AR) and virtual reality (VR) in the fashion industry, have been driving the growth of the online segment. Furthermore, the rising prevalence of mobile devices and the emergence of e-commerce websites and mobile apps have further propelled the demand for online clothing rental products. According to a study by Statista, the number of online shoppers worldwide is expected to reach 2.14 billion by 2021.
The retail stores segment is expected to expand at the highest CAGR of 15.3% over the forecast period. The growth of this segment is mainly attributed to the increasing presence of specialized retail outlets for renting clothing. Moreover, the presence of renowned luxury brands, such as Gucci, Versace, and Dolce & Gabbana, in rental stores has been contributing to the segment’s growth. Additionally, the increasing number of brick-and-mortar stores offering discounts on rental clothes is likely to fuel the segment’s growth over the forecast period.
Type Insights
The subscription segment held the largest share of the market in 2022, with a share of 85.2%. The growing demand for rental clothing is primarily driven by increasing fashion trends, the desire to access a vast range of styles, and a shift towards minimalism and sustainability among the younger generation. The subscription model offers convenience, with customers able to select items, try them on, and return them without leaving their homes. In addition, subscription models offer additional discounts and incentives, such as free shipping and returns, which further boosts the popularity of online clothing rental products.
The single-purchase segment is expected to register the highest CAGR of 14.2% during the forecast period. Family members and friends of customers who have subscribed to the service can purchase items from the same website, thus increasing the demand for the single-purchase segment. Furthermore, increasing awareness of the eco-friendly and cost-effective benefits of online clothing rental products is expected to drive the single-purchase segment.
Regional Insights
North America held the largest market share in 2022. The presence of prominent players such as Rent the Runway and Le Tote, in the region, is expected to drive the growth of the market in the region. Moreover, the growing demand for sustainable fashion and increasing awareness among consumers are expected to have a positive influence on the market. For instance, in March 2022, Rent the Runway launched an online store in the U.S. offering an assortment of clothing, accessories, and home goods.
Europe is expected to witness the fastest growth in the coming years, due to the presence of several startups in the online clothing rental market in the region. For instance, in January 2022, Glamcorner, an online clothing rental company, launched its operations in the UK. The company provides rental services for women’s clothing and accessories. Moreover, the increasing demand for affordable and sustainable fashion is also expected to drive the market growth in the region.
Financial Projections
In this part of the online clothing rental product business plan, we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your rental business. Usually, these projections are drafted for a 5-year period.
Revenue Assumptions
The main sources of revenue for an online clothing rental product business will come from subscription fees, one-time rentals, and product sales. Here you will find a list with a description of each of them and other possible sources of profit such as marketing and advertising, referral programs, and partnerships.
Projecting Expenses
In this section, all the regular expenses related to keeping the online clothing rental product business running will be described. The list of operating expenses includes hosting and data storage costs, wage expenses, marketing and advertising, legal fees, insurance policies, and others.
Key companies & market share insights
Some of the key companies operating in the online clothing rental market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:
– In February 2022, Rent the Runway launched its first physical store, offering customers the ability to try on and rent apparel.
– In March 2022, Le Tote launched a subscription-based rental service for its maternity line.
– In April 2022, Gwynnie Bee launched a new service, Gwynnie Bee Live, which provides customers with a virtual shopping experience.
Some of the prominent players in the online clothing rental market include:
– Rent the Runway
– Le Tote
– Gwynnie Bee
– CaaStle
– Nuuly
– The Ms. Collection
– FashionPass
– Armoire
– Hurr Collective
– My Wear Club
Global Online Clothing Rental Market Segmentation
This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global online clothing rental products market based on product, distribution channel, type, and region:
1. Product Outlook (Revenue, USD Million, 2017 – 2030)
– Dresses
– Tops
– Bottoms
– Outerwear
– Accessories
2. Distribution Channel Outlook (Revenue, USD Million, 2017 – 2030)
– Online
– Offline
– Others
3. Type Outlook (Revenue, USD Million, 2017 – 2030)
– Mass
– Premium
4. Regional Outlook (Revenue, USD Million, 2017 – 2030)
– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa
Frequently Asked Questions
[Q]: What are the Major Trends Shaping the Online Clothing Rental Market?
[A]: The online clothing rental market is driven by increasing disposable income and changing consumer preference for sustainable fashion. The growing demand for convenience and affordability is also driving the market. Additionally, the emergence of rental-based subscription models, such as monthly and yearly subscriptions, is expected to further drive market growth. Moreover, the emergence of innovative rental models such as peer-to-peer rental services, rental-based subscription models, and rental-only stores are also expected to drive the market.
[Q]: Who are the Key Market Players?
[A]: The key players operating in the online clothing rental market include Le Tote, Inc., Rent the Runway, Inc., Gwynnie Bee, Inc., Armoire, CaaStle, Inc., Hurr Collective, Inc., The Black Tux, Inc., and Nuuly LLC.
[Q]: What are the Benefits of Online Clothing Rental?
[A]: Online clothing rental helps to reduce clutter and waste, as well as provides a more sustainable alternative to buying new clothing. It also offers cost savings, as consumers do not need to purchase as many new items of clothing. Furthermore, it provides access to a larger variety of clothing, as consumers can rent them from a wider range of brands.
[Q]: What are the Factors Driving the Growth of the Online Clothing Rental Market?
[A]: The online clothing rental market is driven by an increase in disposable income, which has enabled customers to purchase more items of clothing. Additionally, the emergence of rental-based subscription models, such as monthly and yearly subscriptions, is also driving growth. Furthermore, the increasing focus on sustainable fashion is also expected to drive the growth of the online clothing rental market. The emergence of innovative rental models such as peer-to-peer rental services, rental-based subscription models, and rental-only stores are also expected to drive market growth.
Research Methodology
Impact Analytix employs a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. The company utilizes a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. In Addition, a recurring theme prevalent across all our research reports is data triangulation which looks market from three different perspectives. Critical elements of the methodology employed for all our studies include:
Preliminary data mining
Raw market data is obtained and collated on a broad front. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. For a comprehensive understanding of the market, it is essential to understand the complete value chain and in order to facilitate this; we collect data from raw material suppliers, distributors as well as buyers.
Technical issues and trends are obtained from surveys, technical symposia, and trade journals. Technical data is also gathered from an intellectual property perspective, focusing on white space and freedom of movement. Industry dynamics with respect to drivers, restraints, and pricing trends are also gathered. As a result, the material developed contains a wide range of original data that is then further cross-validated and authenticated with published sources.
Statistical model
Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously. These factors are studied on a comparative basis, and their impact over the forecast period is quantified with the help of correlation, regression, and time series analysis. Market forecasting is performed via a combination of economic tools, technological analysis, industry experience, and domain expertise.
Econometric models are generally used for short-term forecasting, while technological market models are used for long-term forecasting. These are based on an amalgamation of the technology landscape, regulatory frameworks, economic outlook, and business principles. A bottom-up approach to market estimation is preferred, with key regional markets analyzed as separate entities and integration of data to obtain global estimates. This is critical for a deep understanding of the industry as well as ensuring minimal errors. Some of the parameters considered for forecasting include:
Market drivers and restraints, along with their current and expected impact
Raw material scenario and supply v/s price trends
Regulatory scenario and expected developments
Current capacity and expected capacity additions up to 2030
We assign weights to these parameters and quantify their market impact using weighted average analysis, to derive an expected market growth rate.
Primary validation
This is the final step in estimating and forecasting our reports. Exhaustive primary interviews are conducted, face to face as well as over the phone to validate our findings and assumptions used to obtain them. Interviewees are approached from leading companies across the value chain including suppliers, technology providers, domain experts, and buyers so as to ensure a holistic and unbiased picture of the market. These interviews are conducted across the globe, with language barriers overcome with the aid of local staff and interpreters. Primary interviews not only help in data validation but also provide critical insights into the market, current business scenario, and future expectations and enhance the quality of our reports. All our estimates and forecast are verified through exhaustive primary research with Key Industry Participants (KIPs) which typically include:
Market-leading companies
Raw material suppliers
Product distributors
Buyers
The key objectives of primary research are as follows:
To validate our data in terms of accuracy and acceptability
To gain an insight into the current market and future expectations
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