Cop or drop? It’s a question doomed to fall into disuse thanks to Drip, the Italian online rental platform dedicated to streetwear enthusiasts.
Although Statista forecasts a compound annual growth rate of the clothing rental market of just under 20% to $ 7.03 billion by 2025, it is still a business model that faces to challenges not only because of its operations, but also because many consumers remain reluctant to rent clothes. .
That’s why Drip CEO Augusto D’Auria avoids using the term “rental” and describes the experiential shopping platform as a trendy subscription service or, more ambitiously, as a “club”.
Based on an invitation-only or ‘corduroy’ model, Drip borrowed its launch strategy from Clubhouse “to ensure a certain level of exclusivity and establish a member club where word of mouth is crucial.”
The platform offers three fashion subscription packages between 69 and 129 euros, allowing customers to secure one to three rooms per month. Each month, users have the option to “trade in”, return their clothes and rent new ones for the next 30 days.
The rental site features who’s who pieces of the streetwear world, ranging from Off-White and Palm Angels, to 1017 Alyx 9SM, Balenciaga and Marine Serre, as well as niche names like Paria Farzaneh and Youths in Balaclava.
“We aim to bring discovery to our customers, to educate them on new names in the streetwear scene, beyond the usual suspects,” D’Auria explained.
The company was formed in 2019 by a group of like-minded Gen Z talent who channeled their passion for the digital and streetwear worlds into the project, while hoping to advance customer buying habits into practical ones. sustainable such as clothing rental.
“We looked at the market and found that there was already strong activity in the industry in the United States and China, but not so much in Italy,” D’Auria said.
It all started with a budget of 200 euros in advertising and a test, which demonstrated the appeal of such a formula in Italy, but it took two years of development for the platform to be officially launched last June, through Series A funding of € 110,000 obtained through the Fashion Technology Accelerator program.
“The winning formula here is that we don’t offer rentals for second-hand outfits, as is often the case. All of our products can be worn everyday and tap into the rapidly growing niche of Gen Z and Millennial customers who are both passionate about streetwear and responsible purchasing, ”said D’Auria.
The game-driven, memes-rich platform’s communications strategy further exploits the younger generations, who are said to be twice as likely to adopt fashion rental platforms as older consumers, offering a boost. an extra inch to an already booming market. To this end, Drip plans to close a € 350,000 Series B financing comprising bank loans and capital injection by private equity firms.
On the day of its launch, with an inventory of just 150 items, Drip’s available rental packages sold out and 1,500 people were placed on a waiting list. D’Auria recognized that increasing inventory is essential to better serve customers looking for trendy fashion pieces to wear immediately, but insisted that they have prioritized quality over quantity to attract. a better target.
Fashion pieces are purchased by the company through retailers or second-hand sources, “which makes the model even more durable,” D’Auria said. Drip’s business model is eight times more sustainable than regular retailers, internal audit says, but the team knows there are challenges ahead – and industry concerns that it could have an impact. more important than expected.
“We are very attentive to sustainable development but have not yet“ exploited ”it as a marketing lever. The real burden for rental companies is the impact of logistics-related carbon dioxide emissions, ”D’Auria said. As the company scale grows, the company plans to internalize its logistics and laundry to control processes, as well as implement RFID technology to track garments and verify their authenticity when they are. returned.
Although its current 25 active users do not make for a solid business assessment and forecast, D’Auria explained that the customer retention rate is 30 percent and that with a low customer acquisition cost of 80 percent, he is confident that the company will reach a total of 100,000 euros in revenue in 2022 with 100 active users.
How this Italian streetwear brand reached 5 million euros in less than a year
How a study condemning clothing rentals spawned new unknowns
The luxury fashion rental market is ready to take off