Urbanoutfitters Parent Company Enters Rental Service Area And Pushes Lease Service Website.

How can traditional fashion retailers compete with the new generation of Internet based start-ups? The answer may be: hatching your own business!

It is through this way that the US youth apparel group URBN (Urban Outfitters, Anthropologie and Free People brands) has entered the competitive market of garment leasing. In July 30th, the URBN women's renting service website Nuuly was formally launched. Users can pay $88 a month to rent 6 costumes. While launching Nuuly, URBN also appointed chief digital officer David Hayne as president of Nuuly.

The price of $88 / month is a normal entry price in the current rental market. For example, Le Tote, the Internet rental company, has two packages: $79 / month and $89 / month, which can rent 8~10 items. Users can choose to buy these items at a price below 50% of retail price; Haverdash is 59 dollars / month, and can rent 3 clothes at a time, and can also buy clothes at a discount price. The Rent the Runway, the originator of American online renting clothing, mainly provides designer luxury goods such as designer brand, and offers a variety of package options, such as 159 dollars / month unlimited package (one can rent 4).

Unlike competitors who rely on well-known fashion brands to attract users, Nuuly provides niche brands that users are interested in and want to try to create unique competitive advantages. According to David Hayne, the principle behind this concept is that people usually do not buy a brand name product, but they are willing to try it. And if customers want to buy a product at last, it's OK.

According to the current introduction of Nuuly's official website, its products are divided into three categories: classic brand, new designer brand and rare ancient. It covers more than 100 brands and third party brands including Urban Outfitters, Anthropologie, Free People, Levi s, YUMI KIM, Love Love, Outfitters, etc.

Nuuly all operations are made by the internal team, and a team of engineers, data scientists and product managers is set up to create and improve the skills required for renting services. The company also has separate warehouses, executive centers and laundry services in Philadelphia. Compared with start-up companies, Nuuly has a lower cost of acquiring customers. The popularity of existing brands and the data of internal group customers can be used to attract potential users.

CaaStle, a renting and start-up company in New York, is the renting service operator of the famous American brand retailers such as Ann Taylor and American Eagle. Its founder and chief executive, Christine Hunsicker, said: a well run rented garment company can contribute 25% of the business profit to the garment retailer, whereas on the contrary, it can only contribute to the low single digit operating profit.

As a new comer in the fashion rental industry, Nuuly hopes to further expand the user base of rentals. David Hayne points out that Nuuly expects to attract 50 thousand subscribers in the first year, bringing in annual sales of over $50 million. "We do not think that customers will terminate their purchase behavior and buy products that are suitable for frequent use. Leasing is applicable to goods that they want to try."

The introduction of Nuuly is not only a way for UBRN to develop new sources of income, but also a trace to the source of the company's founding. In 1970, college students Dick Hayne, Scott Belair and Judy Wicks opened a shop in the school, selling old clothes and old furniture.

Nuuly at this time on the line can be said to be "Sheng Sheng Sheng Shi" - rental clothing market is developing rapidly. According to data from research firm Allied Market Research, in 2017, the global online rental market reached US $1 billion 10 million and is expected to grow to US $1 billion 850 million by 2023. The McKinsey Co's 2019 report said that young consumers who want new clothes regularly but who care about "sustainability" will be the main driving force behind this development.

Rent the Runway completed a new round of US $125 million financing in March this year, with a total of US $337 million in financing and a breakthrough of 1 billion US dollars. Since April 15th, Rent the Runway has officially launched children's rental services Rent the Runway Kids.