In our hyper connected world, patience is no longer a virtue – rather instant gratification is the new norm. Waiting for things is now viewed as archaic in the business world and failure to get on board will see your service based business model lagging behind the competition. Dubbed the ‘Now Generation’ (a specific type of Millennial), these young social media exuberant individuals can be identified by their love of selfie taking and documenting every move through Snapchat, and are now the ones most apt in their demands for instant gratification. The consumer habits of the Millennial generation, who are set to make up 75% of the UK’s workforce by 2020, is one of the driving factors shaping the future of retail and fashion.
This culture of instant gratification has forcibly caused many outdated business models to adapt and has altered what was previously considered to be a standard convention. An example of an outdated convention? Saving money. Now to explain this bold claim, this is by no means to say the average 20 something does not see the importance in saving, but as the Millennial generation came of age during the recession, for many their present situations do not allow them to save and often short-term spending is prioritised over long-term saving.
Commitment Issues?
The sharing economy in fashion has been slow to take off when compared with other industry sectors. Despite this, the fashion rental market has the potential to grow. If it does, the effect on traditional brick and mortar retailers and the luxury fashion industry could be profound. Fashion rental services such as Rent the Runway, Armarium and Rent Frock Repeat are already seeing the benefits of bringing the sharing economy into the fashion market.
These luxury rental services run on the access to ownership models, which resonates with non-committal Millennial consumers. The nature of these services mean it is no longer necessary to save for months for that designer handbag or dress you have your eye on, and forgo life’s other necessities whilst you scrimp or take on the responsibility of purchasing and owning something outright. Instead, you can scroll through a database of carefully selected designer items, rent it out at a fraction of the price, use it for the desired event/perfectly staged Instagram shot and return it once you’re done. The appeal of luxury fashion rental services to Millennial shoppers is clear to see; they give them access to aspirational brands that their disposable income would usually not allow for.
Keeping Up with The Kardashians?
The fashion rental service model is on track to increase in popularity within the next five years. The reason why? It capitalises and aligns itself with three converging trends: the sharing economy, social media and our celebrity-driven culture. And these trends are not going anywhere soon. Social media has given us daily access to the lives of our favourite celebrities in ways that were once unimaginable. This more personal access has resulted in a desire to recreate celebrity looks and keep up with the Joneses – or rather in this modern day, the Kardashians on an affordable budget.
Wanting to recreate high fashion looks on a modest salary often results in one of two scenarios for fashion conscious Millennials. Either you splurge on the item and commit to living off one basic meal a day, walking everywhere and defaulting on your phone bill for the month. Or you begrudgingly listen to your rational thinking, use the money for bills and head down to the high street in an attempt to recreate the look with alternatives from fast fashion brands. Once the outfit has been purchased, it is worn, the mandatory #OOTD Instagram picture is posted and is never worn again.
The luxury rental model means these two scenarios need not occur. Rather than splurge on the designer item and spiral yourself into even more debt, or buy a cheaper high street version that tries its best to nail the designer look, younger cash strapped consumers can use these rental services to temporarily own high quality, seasonal designer items.
Millennials marketing buzzword?
Despite frequently referring to this demographic as Millennials, it is important to remember that this term can be extremely misleading and general. Millennials are more ethnically and racially diverse than any age generation that preceded them, so whilst of course there are some identifiable behaviour habits belonging to this group, there isn’t a concrete set of universal characteristics that could describe a generation that spans over a 15 year age range.
Redefining Luxury?
Critics of the luxury rental service will be quick to proclaim that luxury designer items are something to be cherished, and to rent them out at a low price is an insult to the designer’s creative craftsmanship. Others will state that these services cheapen the brand; what good is a designer item if it is no longer exclusive but rather something that is accessible to all?
Experiences that can be shared with friends and loved ones holds more value than momentary material goods. The connotation of luxury, which may have been defined by the previous generation, has evolved to something more for the average Millennial shopper. A high price tag and recognisable name does not necessarily warrant a luxury title.
Marketers must also accept some responsibility for the shifting definition of luxury to Millennial consumers – how much value does the word still hold when pretty much anything brazenly categorises itself as a luxury product? Given this, the scepticism of young shoppers can hardly be blamed. The scepticism in big name luxury brands has driven an interest in independent and local brands. This has led to many Millennial’s feeling that these brands’ products are more genuine as they offer a more personal experience. Ultimately, this has a knock-on effect as these consumers recognise their ability to relate to the brand’s integral values.
So what does this all mean?
The future of luxury is by no means in jeopardy as a result of rental services. But luxury brands will need to come to terms with the fact that coming of age Millennials are redefining pre-conceived notions to fit in with their lifestyle.