“We’ve seen strong retention rates and favorable customer reviews associated with ‘Infinite Style,'” said Randy Greben, chief financial officer of the premium segment at parent company Ascena Retail Group. “It is a good balance between customers who use the program for pure rental purpose, and clients who participate in the program as an opportunity to try the product before buying.”
Hunsicker said the rental model creates an additional revenue stream, because “what you buy and what you rent are fundamentally different.”
As a result, she said that “rental is complementary to a retail business. Shoppers buy core items and basics, and rent the fashion.”
Renting also allows shoppers to stay on top of fashion trends with a less permanent commitment. But, Hunsicker acknowledges, this model takes work on the consumer’s part. Shoppers are choosing exactly which items to rent, whereas in other services, like Stitch Fix, shoppers don’t choose what gets delivered.
Hilt said Express executives predict the rental program will boost shoppers’ spending, not cannibalize it.
Further, the risks for Express are relatively low.
In outsourcing the service, Express gets a “fully managed service for us without heavy upfront costs,” Hilt said. “We are optimistic about the long-term opportunity of Express Style Trial, but expect the overall impact to be small in 2018.”
“Retailers are treating this subscription rental business as a new channel, akin to what e-commerce was when it first started” Hunsicker said.