On borrowed time: the brands that loan customers free products

Feb 15, 2019

As brands in multiple sectors are exploring new rental schemes this month, GDR’s John O’Sullivan looks at the retailers who are going even further and inviting customers to borrow their products for free.

 

Right now there seems to be more and more brands and retailers dabbling with rental schemes. Just last week Ikea announced that it was trialling a furniture rental scheme in Switzerland, while American Eagle launched Style Drop. This is a clothing rental service for women that gives members “access to endless styles for one flat monthly fee”, kind of like a single brand version of Rent The Runway. In the same space YCloset is a Chinese clothing rental company backed by Alibaba that, for a monthly fee, gives its 15 million members unlimited access to pieces from luxury brands like Acne Studios, Self-Portrait, Pinko and Versace.

 

AE Style Drop

 

For some of these companies sustainability is a factor. Indeed Ikea and YCloset both allude to this in their marketing, chiming with ethical Dutch fashion brand Mud Jeans, which for years has been inviting customers to lease jeans. But it is also clear that, as ideals of access over ownership and experiences over things grow, coupled in some places by the changing attitudes of recession-hardened consumers, traditional ownership models are no longer working as they once did. Brands are having to work harder to convert customers and so these rental schemes provide a softer, more flexible access point to the brands involved, giving customers a chance to road test products at lower price points before fully committing.

 

Free trial and discovery

In some regards this presents a long-term tactic as brands are looking to prove their worth to customers and tie them into their ecosystems. A more radical model that we’re starting to see more of is brands inviting customers to borrow products for free, with no strings attached.

 

Gu

 

This is an approach that we first saw from Uniqlo’s more affordable sub-brand Gu back in 2014. Customers in its Shibuya store in Tokyo could take three items, give their name and phone number to a member of staff and just walk out. There was no need for a deposit, no commitment to purchase, but they did need to return within 24 hours to purchase or part with the clothes.

This example fascinated us at GDR when we first heard about it, but it wasn’t until late last year we started to see a few other retailers turning to the concept. At French fashion brand Ba&sh’s New York flagship, customers can borrow clothes for the weekend for free between 5-7pm every Friday, so long as they return them by closing time on Monday.

 

Arc’teryx Gear Library

 

Similarly, premium outdoors apparel brand Arc’teryx has just launched the Gear Library initiative in its North American and London locations. Customers can borrow clothes for up to four days, take them on hiking and skiing expeditions and, even if they get damaged, return them for no charge.

At Canadian retailer Groupe BMR’s urban, millennial-focused La Shop hardware store in Montreal, customers can also borrow tools for their DIY projects for free for up to four hours.

 

La Shop

 

Some might argue this unfettered access to products is counter-intuitive, but it’s a really interesting brand building move. Not only do these initiatives create pathways for new customers to explore expensive, high-end, aspirational brands and provide a platform to nudge undecided customers over the line, they’re also potentially a really great way to turn used, returned and display stock into a powerful asset.

As retailers continue to tweak their business models to align with the rapidly-changing retail landscape, I’ll be interested to see how many other brands follow suit and borrow from this playbook.

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