All The Dresses recently conducted a survey with businesses in the designer hire industry in Australia. With limited publicly available research on the industry, we felt it was important to find a way to estimate growth of the sector, and understand business and consumer sentiment.
What better way than to ask those who live and breath it on a daily basis – the owners of most of Australia’s professional designer clothing hire businesses.
We sent the survey to over 40 of these businesses, with an emphasis on those that run all or part of their business through a website with full e-commerce capability.
This is something we intend to do every year, to see how trends, sentiment and opinions change over time.
Below are some highlights from the results.
Growth in 2018
Three quarters of respondents to the survey estimated growth of the industry in 2018 was more than 20%, with 30-50% being the most popular response. “Growth” was considered as total value of rental sales.
No one gave a response of below 10-15% growth.
Challenges for the Industry and Business Owners
With most businesses surveyed operating all or part of their business online, a large number of respondents said that the biggest challenge they faced was the unreliability of the Australian postage network. Dress rental by post, whilst already being extremely popular, requires good planning and logistical processes, especially if a business is to maximise the return on its investment in garments.
The second biggest challenge was contending with the amount of competition from other dress hire companies. This comes as no surprise, as new businesses are opening up almost every other day (mostly on Instagram). It can be difficult for consumers to tell who is a well-established business they can trust.
At All The Dresses, we only list items from trusted partners, who will usually have been operating for some time and have built up a good reputation for on-time delivery and well looked after garments.
Customer Behaviour
Business owners believe that the majority of customers fall in the 21-30 age group, with more leaning towards the higher end of that range.
On average, they believe about 40% of customers still need to try-on a dress before they will commit to hiring. This was a little surprising to us, given how most of the younger generation prefer to shop online than in a physical store. Having said that, a lot of online retailers these days offer free returns, so the risk of wrong fit isn’t a concern for the consumer.
This is perhaps an area where dress rental companies will have to improve in order to win online. They can do this in several ways, such as offering try-ons by post at an affordable price, offering free returns for issues with fit, sending two sizes or a back-up dress with each order, or turning to technology to solve the issue, e.g. a virtual fitting. Several businesses have experimented with these options but we’re not sure anyone has really nailed it yet – so that it’s both simple and affordable for the customer, but also cost-effective for the provider.
90% of businesses say the #1 reason that women are hiring outfits is because they can’t justify the price of something they won’t wear many times, even though they could probably afford to buy it.
30% of respondents also believed a major reason for hiring is because they do not want to own more stuff and are looking to de-clutter their closet. We expect this to get higher as young people more and more are favouring experiences rather than ownership across a whole range of areas.
The majority of business owners (65%) said a major reason why a lot of women still aren’t using clothing hire services is because they are still unaware of the market and the variety of options that exist.
Looking Forward
Outside clothing, survey respondents believed the two areas which had the most potential for hire were bags & clutches and very high-end designer clothing.
There was still uncertainty regarding whether subscription-based models for clothing hire would become the norm, with most either predicting success with only parts of the market, or responding that they were still unsure.
What About Men?
70% responded pessimistically (45%) or with uncertainty (25%) on whether men’s clothing hire would reach mainstream popularity in the same way it has for women, suggesting that men typically have a different mindset when it comes to clothing & fashion.
How will the Industry Fare in 2019…
All respondents predicted strong growth would continue in 2019, with around half estimating growth would be in the 15-20% bracket, and a quarter of respondents predicting even higher than this.
In Summary
So, according to our survey participants, it has been a big year for designer clothing hire in Australia and they’re expecting another big year in 2019.
How businesses make themselves stand out among a wave of new competition will be interesting to watch.
It will also be interesting to see whether global trends, such as a move towards a experiences rather than ownership, a global push for responsible consumption, a desire to de-clutter your life (thanks Marie Kondo!) and millennials going minimal have an impact on whether more women prefer to hire over buying their outfits.
We can’t wait to see what 2019 has in store and we wish the industry as a whole a fantastic year!
If you would like more details about the survey results or would like to republish some of the information above in your publication, please contact All The Dresses.
All The Dresses brings together all the designer items for hire from Australia’s top rental companies. Find, compare and book from over 4,000 items, with lightning-fast search and filtering!
