Posted by Alex Jackson on 30th Aug 2019
The prescription to fight flagging sales that many retailers in the apparel world have embraced recently is the subscription program. In recent months a large swath of brands such as Banana Republic, Urban Outfitters, Ann Taylor, American Eagle, and Vince have all announced plans to launch their own clothing rental programs. What's behind this move by so many big players getting into the rental business? It's simple; it's a play to stay relevant in a wildly competitive retail environment where online sales seem to gobble up more market share each year from these traditionally brick and mortar retailers. The subscription service model is not a new one, but it's gained significant popularly in recent years. Consumers have acclimated themselves to the concept and have gotten used to seeing that monthly charge on their credit card statements. It's quite an appealing concept for retailers as its guaranteed revenue in their doors each month in the form of the flat monthly fee. Plus more potential sales if the goods are kept or if the consumer forgets to return them. This is the kind of income that retailers crave. It's far easier to forecast revenue in a subscription-based program, and guaranteed income even if the consumer does not end up purchasing that particular month's items.
Let's return to the initial question of this article. As independent retailers should you be concerned about clothing subscription services replacing online or brick and mortar apparel retail anytime soon? The answer, in my opinion, is no for several reasons. For starters, subscription services are most appealing to consumers when they offer a solution to a particular problem. Need entertainment? Subscribe to one of the multitudes of streaming services now available to consumers, millions of hours of entertainment are now at your fingertips. Need some quick homecooked meals? Subscribe to one of the many home delivery meal kits currently available and save yourself the headache of figuring out what's for dinner tonight. These are both solutions to a particular problem, and that is their main appeal. Now I am not saying having no clothes is not a problem, but the concept of buying all of your clothes from a single brand seems like quite a stretch. Do you have a closet comprised of exclusively a single brand? And if not, are you willing to start up a half dozen or more subscription services to give your wardrobe the variety you crave? I highly doubt it. Clothing selection is a very personal thing; it's a form of self-expression that very few consumers are willing to leave in the hands of anyone or anything else. Some of these models may have some initial success, in particular, those able to offer a variety of brands and styles. There are several well-established players in the arena like Rent the Runway that will probably be around for some time to come, but most of these new rental options will burn out quickly as the fad loses its appeal. Consumers want variety and choices; that's why there will always be room for independent retailers like you that offer their customers a multitude of options. You know too that you can rely on Foxliquidation a leader in the liquidation industry that can deliver all of these options. Keep one thing in mind. Clothing rental subscription services are a solution to a retailer's problem, not a consumer's problem.
January in retail is a pivot month, the holidays have passed, and retailers are making some last-ditch efforts to entice a few more customers to spend on winter wear options before they are pushed out. Pushed out? Aren’t there a few more months of winter left here you may ask? And yes, you are quite correct. As strange as [...]