DVD Netflix is a leading movie rental service — you choose the movie online, have it delivered to your doorsteps within two business days, watch, then return using the prepaid envelope. It’s as simple as that. You can rent as many movies as you want for only $7.99 or $11.99 a month, depending on how many discs you want at a time. Such rental services save the money in our pockets. Not only are there DVD rental services like Netflix, but also cars and rooms are available for rent. But then, why not rent the clothes we wear? If there was a Netflix for clothing, it would take the burden off of having to shop for new clothes in season and trying to catch up with the rapid change of fashion trends. Even just having the opportunity to wear absurdly expensive designer clothes like Valentino dresses or Balenciaga suits would be a short but wonderful dream come true. Well, news alert! Now you can with both online and in-store clothing rental stores.
Rent The Runway is a rental service that offers designer dresses and accessories for rent. It was launched in 2009 by two Harvard Business School classmates, Jennifer Hyman and Jennifer Fleiss. When questioned about the reason behind launching the company, Hyman said, “Everyone deserves a Cinderella experience.” With over 65,000 clothes and 25,000 accessories, women are able to be the Cinderella that they have been dreaming of with the help of Rent the Runway fairy godmother. (Bibbidi-Bobbidi-Boo!) So how? Set the date of delivery, choose the clothes, select two sizes from 0 to 22 (another size for back-up, in case it does not fit), rent, and return, using the prepaid envelope. The rental cost depends on the popularity, availability, and age of the dress. The clothes are clean to wear with the company’s dry cleaning service. You can pay each time you rent or subscribe on a monthly plan for $65 or $139, depending on a four-day or eight-day rent.
Mr. Collection is also a rental service, but for men with free shipping and dry-cleaning services. However, unlike the aforementioned service, Mr. Collection personalizes your own style based on a survey you fill out, and has it delivered. Starting from $49 a month, you now have your own personal style team. In addition, you may keep the clothes as long as you want, and also purchase the style you love with membership benefits.
Last November, with the accelerating popularity of clothing rental service, SK Planet adopted the idea and launched an application called Project Anne, Korea’s first ever clothing rental service. It offers both clothing and bag rental services. For clothing rental, it costs 80,000 won per month for 4 items, one at a time, and 130,000 won for two at a time. With hundreds of fashion brands, the choice is all yours. If you love what you have rented, you can easily buy by clicking “purchase” on your smartphone application. Fascinated by this new concept, more than 30,000 people registered and over 4,000 have purchased for the past three months, exceeding the company’s initial expectation.
Clothing rental services are currently receiving the spotlight for being a “rational consumption” — but are they really? These rental services might just be another scheme plotted out by marketing strategists. Besides, they would not bequeath such services if they did not bring them profit. Endowment effect — a circumstance in which an individual ascribes more value to something they already own than to something they do not yet own — is one of the anomalies that economists find hard to fathom. One of the commonly used marketing strategies using endowment effect is letting customers take a test-drive when buying a new car, or a full money-back guarantee. Once you take it home, engraved with the idea of ownership, it is hard to return. Endowment effect can be explained by loss aversion; as Kahnemna, Knetsch, and Thaler explained in their thesis, “Losses loom larger than gains.” People dislike parting from what was once theirs, giving more meaning to the item that they already possess.
Similarly, clothing rental services use this marketing strategy. Look at how they have set the rental days: four, eight, as long as you want. Why not make the rental for a day or two? By offering longer service, consumers might think that they are rendering kindness, but in a sense, it is a way of forming a false sense of “ownership” for consumers. If endowment effect and loss aversion work in the perfect formula, it will lead more consumers to purchase, contradicting with the idea of rational consumption.
Marketing strategists have also written the original price and the reduced price tag. Therefore, when contemplating whether to buy or not, or doubting if you are making the right choice by renting, consumers are engaged with the thought that they are making a rational consumption by looking at the retail price. Here’s an example. A Dolce & Gabbana dress that costs $1400 is available for rent at $200. For a couple more hundred, you can own them. Then automatically, your so-called rational brain starts to think, “I am making a rational choice. This is a bargain.”
Clothing rental service is a tempting and a seemingly perfect idea. The merit of rational consumption exists only if you use it wisely. Do not be easily fooled by the traps that they have set. Use the service when you need clothes for a special night out or a day of celebration. The Sogang Herald is keeping an eye out on how this relatively new clothing rental service will turn out, especially
, with the launch of Project Anne in Korea. Will this become the new platform for shopping? Let’s wait and see.