Clothing Rental Takes Aim At Traditional Apparel Sales - 9/24/19

From the Simplr studios in San Francisco, this is your weekly briefing.

Introduction

With your E-Commerce Retail Briefing for today, Tuesday, September 24, 2019, I'm Vincent Phamvan.

The clothing rental industry has seen a lot of growth as consumers seek sustainable and affordable options. Traditional retail sales may take a hit as clothing rental services gain steam.

First, here are some retail headlines.

Sephora Tops Sailthru's Retail Personalization Index

Sephora topped Sailthru’s annual Retail Personalization Index for the third consecutive year. According to a survey, Sephora earned high marks for their mobile and email customization. The RPI ranking indicates that Sephora is the brand to emulate when it comes to personalizing the user experience, especially on mobile. Nordstrom ranked second on the list, seeing an improvement in its mobile score versus last year. Urban Outfitters and The Home Depot were also among the top performers.

Macy's Piloting Same-Day Delivery

Last week, Macy’s announced they would be piloting free same-day delivery in select markets. They also revealed that free same-day delivery on orders over $75 would be available in 30 markets by October 1st. Macy’s will be partnering with Deliv to fulfill same-day orders. They didn’t say when the pilot would end, but Andrew Lipsman, an e-commerce analyst for eMarketer, sees it as a temporary play to win over holiday shoppers.

Trigo Raises $22 million in Series A Funding

Computer vision startup, Trigo, has raised $22 million in a Series A funding. The company uses a series a cameras throughout a store to monitor shoppers and their baskets, similar to Amazon Go. The startup wants to connect with grocery retailers that have watched Amazon Go’s development and want to implement AI without getting involved with Amazon. The company also has plans to implement their technology in 280 stores in the next five years.

Clothing Rental Takes Aim At Traditional Apparel Sales

Clothing rental services are a growing trend, which may affect traditional retail sales. Brands like New York & Company, Bloomingdale’s, and Banana Republic are offering to rent their clothing for a monthly rate. Even H&M, with almost 5,000 stores globally, announced in August they were launching their own rental service.

While most services are online, some brands are creating physical spaces for people to drop off, pick up, or browse available clothing. Fashion rental service Le Tote bought the operations of Lord + Taylor stores. In the next nine months, it plans to build drop-off lockers and display areas in 38 Lord + Taylor department stores. Rent the Runway has also expanded its physical presence with partnerships with WeWork and Nordstrom.

The risk for retailers is that rental services could take spend away from more traditional sales. Changing shopping habits and falling prices have nearly halved the spend on apparel by the average U.S. consumer over the past 30 years. In 2018, In addition, the U.S. apparel rental market was worth $1 billion in 2018, less than 1 percent of total apparel market. But, it grew 24 percent in that year compared to 5 percent for the wider clothing market.

Though clothing rental seems to be well liked among consumers, it comes with risks, so it remains to be seen if rentals will chip away at traditional retail sales over the longer term.

Closing

Thanks for listening to the latest episode of the E-Commerce Retail Briefing. Don't forget, Simplr can help you scale up your customer service with 24/7 support. Find out more at Simplr.ai. Until next time.