Apparel-as-a-service gained recognition nearly a decade ago with the debut of Rent the Runway, giving fashionistas everywhere the option to rent a designer dress at a fraction of the cost it would otherwise take to own it. Since then, the company has added monthly subscription offerings to serve the growing trend of renting clothes, recently reaching a valuation of $1 billion.
Taking notice of an increasing popularity for apparel-as-a-service, other companies such as Gwynnie Bee joined the race. The company now offers business-to-business data and logistics services to leading brands, including Ann Taylor and American Eagle, enabling them to launch and manage their own clothing subscription services.
Longstanding views on ownership are changing
The success of companies like Uber and Netflix are just a few examples of how consumer views on ownership are shifting. Younger, more digitally savvy and socially conscious generations such as Millennials and Gen Z (those born between 1983-2002) are starting to have a significant influence on companies’ business models.
This strongly opinionated age group cares about the impact of a company’s social and environmental footprint, which greatly influences their purchasing habits. According to Deloitte’s 2019 Global Millennial Survey, 42% of Millennials/Gen Z report that they have started or deepened a business relationship because a company has products or services that positively impact the environment or society. Moreover, the survey reveals 38% have stopped or lessened a business relationship because a company has products or services that negatively impact the environment or society.
The degree to which these shifts in consumption habits will impact the business model of traditional apparel manufacturing remains to be seen. The fact that apparel-as-a-service gives younger consumers a way to try new fashion while reducing the harmful effects of manufacturing on the environment and society seems to support the growing interest in the market. Renting results in fewer garments manufactured – saving water consumption, decreasing CO2 emissions and reducing the number of garments that ultimately end up in a landfill – which is a win for younger demographics, and the world.
Looking at the impact on product development
Making this shift will require apparel companies to reexamine their product development processes. The following is just a glimpse of how offering subscription services could affect the various stages of the product lifecycle.
- Ideation and design: When designing for apparel-as-a-service, designers need to estimate the garment’s end of life based on the quality of the raw material used. For instance, the number of expected rentals per garment would impact the fabric choice to ensure that the design aesthetic and quality would remain the same over the lifetime of the garment. The estimated rental period would also influence the seasonality or trendiness of the design.
- Merchandise and business planning: During the planning stages, merchandisers need to determine how many rentals would need to occur in order to make a profit. Financial forecasts would need to include costs for cleanings between rentals, shipping costs and any repairs associated with wear and tear.
- Product specification: Material developers would need to ensure that the materials are durable enough to sustain the cleanings between each rental. A garment with intricate beading or chiffon, for instance, may not be able to withstand many cleanings between rentals, necessitating a higher rental price for the garment or a different choice of material and design.
- Product sourcing: Consumers are increasingly interested in knowing whether products are made with sustainable, organic or recycled materials. Apparel manufacturers would need to take these factors into account when making sourcing decisions.
- End of life: Once a garment has reached its end-of-rental cycle, apparel manufacturers would need to determine which part of the garment could be cleaned for reuse in future products. This information would need to be tracked, so that product designers and sourcing teams would know when the cleaned material is available for repurposing.
Whether designing apparel for a one-time sale or to support the emerging apparel-as-a-service market, using a modern process- and design-driven Product Lifecycle Management (PLM) solution is essential. With PLM, design and development teams benefit from greater collaboration and transparency, based on end-to-end connectivity, visibility and traceability across data, people and processes. Armed with this information, product development teams can make better and faster business decisions throughout all stages of the product lifecycle.
What are your thoughts on apparel-as-a-service? Is it a fleeting trend, or here to stay? Share this post and your thoughts below.