From environmental concerns to constant desire for new items, wealthy consumers are shifting towards the economy of sharing instead of owning luxury goods. This article examines the psychological reasons why consumers value renting luxury fashion items and describes the negative influence rentable luxury might have on a brand’s image.
Values supporting rentable luxury
The fashion industry is experiencing a fundamental shift in customer behavior, that is influencing the business model and retail distribution of many luxury brands. Customers are keen on renting items and using them only for a short period of time. In the following paragraphs, we will examine the main values and trends that make sharing luxury goods an undeniably needed service from a conscious consumer’s perspective.
Being part of a community
One of the most significant consumer trends of the past decade has been the rise of sharing economy. It expands into new sectors every day. Apart from materialistic and environmental reasons, customers are driven by the need for social interactions and community building when choosing collaborative consumption. Sharing platforms provide a possibility to create shared stories, engagement with others and feeling part of a community. All of these components play an important role when evaluating the user experience.
Mindful consumption
It’s been an emerging trend among customers to make conscious decisions, even if they are investing in something that is less valuable and used to be an insignificant purchase. Such as buying clothes. Eco-conscious customers are now fighting against consumerism, waste and global warming by making conscious purchases. They are boycotting specific fast fashion brands and choosing alternative options instead of buying new. As for the companies of the fashion industry, the role of sustainability has become a very important part of a brand’s value. By renting, sharing, or buying used, customers are able to act on their values and rotate their wardrobe without guilt.
Hunger for newness
Another change in customer behavior is the growing need for new experiences. The young generation, especially young Millennials aren’t focused on the ownership of products anymore. They have a hunger for newness, and they want access to the things that excite them. They crave interactions with new brands, which constantly provide new stimuli. Social media is also playing a big part in this change, as it is strengthening the “buy once, wear once” mentality by influencers showing their never-the-same outfits on these platforms.
The Cinderella moment
The possibility of renting luxury goods makes these brands more affordable and accessible, which is why they are able to cater a broader sector than before. Less wealthy customers experience their “Cinderella moment” by renting these formerly unattainable luxury products for a short period of time. By sharing, companies are able to reach lower-income or younger groups as well. Brands can benefit from this opportunity by winning over customers who might turn into owners in the future.
The negative effects of sharing luxury goods
Reviewing the tendencies above, many people turn to premium or luxury brands when thinking about buying or renting used products. They are known for their high-quality, durable items. Although other than quality, the perception of exclusivity is also a basic component of luxury. A luxury good is a desirable item that is expensive and difficult to obtain. People collect their money for years, to purchase a Birkin bag or a pair of Louboutins. Rentals make luxury accessible, which might ruin the exclusivity of these brands. Wearing luxury comes with psychological effects and emotions such as heightened self-image and feeling unique. The process of renting makes these emotions available at a lower price, which affects the brand’s equity– the customer’s perception of the brand’s financial worth- negatively. Brands have to decide whether they are shifting towards renting and catering a broader sector or they are not pursuing the sharing process to keep their exclusivity.
As mentioned before, collaborative luxury consumption has many psychological advantages concerning the evaluation of the user experience. Feeling eco-conscious, being able to experiment with new products and benefitting from the interactions and connections that come along with the renting process. Although if we analyse the essence of luxury brands, promoting these sharing possibilities might have a negative effect on a brand’s image. Companies must come up with new distribution strategies to keep up with the changing customer needs, but still retain their position as an exclusive luxury brand.
Sources:
Forbes (2019): Is Rent-The-Runway Ruining Luxury? Available at: https://www.forbes.com/sites/larrylight/2019/07/05/is-rent-the-runway-ruining-luxury/?sh=290907042216&fbclid=IwAR1gB0tD0w9fhPSzoBmpX_ReD7HuXNkg22eJEDE4rPx7iZYfMSdVmqb2Ylc Accessed: 29/12/2020
Luxury Society (2020): In the New Age of Rentable Luxury, Consumers Are Less Concerned With Ownership Than Ever. Available at: https://www.luxurysociety.com/en/articles/2020/02/rise-sharing-economy/?fbclid=IwAR0VZVTKHQ5GC4Jn0jiMfPnttOS3BSo-uG_4vgTUJl2_kPN8q79br2oPok8 Accessed: 29/12/2020
McKinsey (2019): The end of ownership for fashion products? Available at: https://www.mckinsey.com/industries/retail/our-insights/the-end-of-ownership-for-fashion-products?fbclid=IwAR1gB0tD0w9fhPSzoBmpX_ReD7HuXNkg22eJEDE4rPx7iZYfMSdVmqb2Ylc# Accessed: 30/12/2020
Skyword (2018): The Consumer Psychology Behind the Sharing Economy—What Marketers Must Know. Available at: https://www.skyword.com/contentstandard/the-consumer-psychology-behind-the-sharing-economy-what-marketers-must-know/?fbclid=IwAR26k1dpoN4Lk6kxBzDLCenAXmOp1Svx2TynqW8BM6D5RERzSlSsmH7O_Mc Accessed: 29/12/ 2020
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