Market analysis

Bigger and younger

The luxury fashion market continues to grow, and the consumers who enjoy it are getting younger. According to a joint study by consulting firm Bain & Co. and Italian luxury goods association Altagamma, millennials (Gen Y) and Gen Z accounted for 44% of global luxury shoppers in 2017 and are expected to reach a whopping 70% by 2025. Rather than wanting luxury fashions to exist in their closets forever, this new generation is focused on the tangible experiences they can get out of luxury goods.

From offline to online

The luxury fashion market is still very much offline, which means that if online can replace the role of offline, it can grow even faster. Changes in consumer behavior have made this even more likely. In the past, owning a product was the only true form of consumption, and consumers found great satisfaction in seeing and buying products in person and enjoying the added services of a luxury brand's brick-and-mortar stores. This is still true today, but there is a shift underway.

According to Technavio, a technology research and advisory firm, the online apparel rental market is expected to grow at a CAGR of 9.86% from 2022 to 2027, reaching a market size of $1,564.94 million. The importance of luxury fashion to overall apparel rental continues to grow, and this can be seen in the individual services and platforms associated with it.

Evidence of the rise of luxury fashion

According to the 2023 Luxury Consignment Sales Report from online luxury consignment site The RealReal, Gen Z searched for six brands synonymous with "quiet luxury" 29% more than last year. Among them, Brunello Cucunelli, Loro Piana, and The Row are known for their logo-free styles favored by the ultra-wealthy.

In addition, Rent the Runway continues to prioritize premium inventory. In a recent customer survey, 85% of respondents said they value high-end luxury fashion, and 87% said they use the service to get access to brands they wouldn't otherwise be able to buy. But at the same time, high-end brands are dramatically increasing their prices. Chanel, for example, has increased its prices by 8-16% this year. As a result, fashion lovers have to find other ways to maintain their lifestyle, and the best alternative is rental.