TEDx Talks - The Business of Rental Fashion | Aanchal Saini | TEDxSGTBKC
The speaker, originally a lawyer, transitioned into the rental fashion industry in India, founding a business that addresses the issue of women having full closets but nothing to wear due to the stigma of repeating outfits. The business model focuses on renting high-end ethnic wear, which is often expensive and used only once, thus promoting sustainability by reducing waste and conserving resources like water. The company faced challenges in changing consumer mindsets and building brand awareness, requiring significant investment in marketing and technology. They pivoted from western to ethnic wear, realizing the latter's potential due to its higher value and one-time use nature. The business expanded through a franchise model, overcoming setbacks like the COVID-19 pandemic, and is now profitable with plans to further expand its store network. The speaker highlights the importance of adapting to market changes and consumer preferences, noting a shift towards experiences over ownership among younger generations. They also emphasize the role of sustainability in their business model, collecting luxury garments from individuals to rent out, thus extending the lifecycle of each item and reducing environmental impact.
Key Points:
- Transitioned from law to rental fashion to solve the problem of closet redundancy and promote sustainability.
- Faced challenges in changing consumer habits and required significant marketing investment to build brand awareness.
- Pivoted from western to ethnic wear due to its higher value and one-time use nature, enhancing sustainability.
- Expanded through a franchise model, overcoming challenges like COVID-19, and achieved profitability.
- Emphasized adapting to market changes and consumer preferences, focusing on sustainability and reducing environmental impact.
Details:
1. 👔 From Law to Fashion: A Career Shift
- The founder transitioned from a legal career to the fashion industry, motivated by a desire to innovate and fill a niche in the rental fashion market in India.
- Faced initial challenges such as understanding the fashion industry's dynamics and establishing a new business model.
- Successfully addressed these challenges by leveraging legal expertise to negotiate contracts and protect intellectual property.
- Spent 10 years building and expanding the rental fashion market in India, achieving significant growth and recognition within the industry.
- The career change resulted in personal fulfillment and professional success, illustrating the potential for cross-industry innovation.
2. 🌟 Founding a Rental Fashion Business
- The speaker transitioned from a seven-year career in law at the Delhi High Court to founding a fashion business, demonstrating a foundation in handling mixed legal matters and arbitration.
- They advocate for a structured learning plan for aspiring entrepreneurs, suggesting the creation of an action plan to acquire necessary skills within two to three years.
- The career shift was motivated by a desire for new challenges and opportunities, not dissatisfaction, highlighting that career changes can be driven by passion rather than the desire to escape current roles.
- The speaker emphasizes the importance of applying legal skills to business challenges, such as negotiation and contract management, enhancing the strategic foundation of the new venture.
- Key challenges included adapting to a new industry and building a network from scratch, which were addressed through targeted learning and leveraging legal expertise.
3. 👗 Building the Rental Fashion Concept
- The rental fashion concept was initiated to solve the issue of women having full closets yet feeling like they have nothing to wear because clothes have been worn once and they do not want to repeat outfits.
- The business was started in 2015, aiming to create an asset that could eventually be sold for revenue, rather than relying on personal professional skills as the sole asset.
- The rental fashion business involves changing consumer mindsets and habits, as it requires consumers to adopt a new service that they were not previously using.
- Significant investment in brand building and consumer awareness was necessary to establish the rental fashion business and encourage consumer adoption.
4. 📈 Challenges and Market Strategies
4.1. Challenges
4.2. Market Strategies
5. 🏬 Expanding Through Stores and Franchises
- Customer acquisition cost is critical in new markets to assess product performance and profitability.
- The brand philosophy shifted to renting iconic and expensive ethnic garments, which are costly and often used once, making them suitable for rental.
- The pivot from western to ethnic wear was driven by the high value of ethnic garments, which are more sustainable by saving resources.
- Renting one ethnic garment saves approximately 28,000 liters of water, equivalent to a residential swimming pool.
- In the past, customers prioritized cost savings over sustainability, but now environmental concerns are more prevalent.
- Renting ethnic wear online faced challenges as customers prefer to see and feel products in physical stores, leading to the development of stores for better consumer access.
6. 📉 Overcoming Economic Challenges
- In 2017, the company initiated a strategic shift by building new stores, marking a transition from a period of financial struggle to regaining market leadership, akin to a 'king reclaiming a throne.'
- This strategy faced challenges such as increasing brand awareness and managing marketing expenditures efficiently, highlighting the need for effective resource allocation.
- Leadership changes played a significant role, with the speaker not being the original founder, emphasizing strategic leadership as a key factor in overcoming economic hurdles.
- The brand Flyro, associated with the speaker, was identified as the largest in the country, demonstrating strong competitive positioning, being 10 times larger than the speaker's own brand, Rented Pay.
7. 🔄 Adapting and Innovating for Sustainability
- After acquiring a local Delhi burger brand, the company expanded using a franchise model to build stores across India.
- In March 2020, the company signed its first franchise deal, but the COVID-19 pandemic forced a reduction from 150 employees to 15, with most stores shut down, yet the remaining stores remained profitable.
- Despite the challenges of the pandemic, the company managed to sign up 10 more stores.
- The company is the only one in India building a franchise model for rental businesses, allowing it to improve the model over two years.
- The business stopped burning money and moved towards profitability, leveraging partnerships with over 2,000 celebrities and influencers.
- The company now operates 20 stores, serves 45 cities online, and plans to expand to 100 stores in the next two years.
8. 🛍️ Market Evolution and Consumer Trends
- A sustainability-focused rental model extends the life of luxury garments, allowing 7-8 uses per item and saving significantly on production waste.
- The model is asset-light by collecting garments from customers and providing a dashboard for tracking earnings, with monthly rental payments.
- Renting luxury items proves cost-effective against purchasing, e.g., renting a Rs 50,000 garment for Rs 10,000, leveraging the growing pre-loved market.
- Challenges included educating customers on renting versus buying, as the concept was initially confusing without online precedents.
- Website adjustments and consumer education were necessary to clarify the rental model and enhance customer understanding.
- The rental business redefined hygiene standards in the market, offering designer collections with superior service and cleanliness.
- The product range, from Rs 1,500 to 1 lakh, meets diverse budget needs, crucial for weddings and special occasions.
- A niche was found in ethnic wear, recognizing evolving consumer preferences and market demands.