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How the Sharing Economy Paved the Way for Clothing as a Service

Entrepreneur Christine Hunsicker was playing the long game when she launched plus-size-focused, clothing-rental service Gwynnie Bee back in 2011. The e-commerce subscription service lets customers pay a fixed price for a certain number of items out at any given time, offering women “limitless” fashion in sizes 0-32 for a price typically lower than what they’d pay if buying outright.

At the time, Hunsicker, CEO of Gwynnie Bee, was setting the stage for an even more ambitious plan: proving the online clothing-rental business case in order to build out a platform that could be white labelled for any brand or retailer. That vision has now come to life as Hunsicker’s latest project: CaaStle, or Clothing as a Service, of which she’s also CEO.

The CaaStle service includes free shipping both ways and dry cleans every item of clothing, offering hassle-free convenience for time-pressed customers. For retailers, CaaStle plugs into their e-commerce sites via an API—making it super “lightweight” to get up and running, Hunsicker told Sourcing Journal.

Given that many consumers are accustomed (or even addicted) to this “service” mentality—rides on demand with Uber, vehicle access through Zipcar, hotel-like accommodations at the click of a button with Airbnb—it was only a matter of time before the sharing and on-demand economy came for fashion, too, which has already brought the likes of Rent the Runway and Le Tote into the mainstream. While these last two companies are customer-facing, Hunsicker pointed out that CaaStle is a business-to-business service that lets any apparel retailer begin offering the convenience of clothing rentals to customers.

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What’s more, increasing pressure on retailers to right-size their businesses and maximize revenue is compelling many merchants to identify new opportunities to serve customers in new ways. “Anytime there are pressures on existing industries or ecosystem, it creates a tremendous amount of opportunity for new disruptive models and technologies to take hold,” Hunsicker said. “I think part of the reason we’re able to move so quickly into retailers over past year is they’re looking for different ways to meet the consumer where she is—to capture the attention of the modern consumer.”

Currently, CaaStle is powering the fashion-rental services offered by Ann Taylor via its Infinite Style program (you’ll find a link buried at the bottom of the AT website) and New York & Co.  (NY&Co.), through its NY&C Closet service (at a standalone website, Infinite Style offers three items out at a time for $95 per month, while NY&C Closet’s plan costs $49.95, also for three items at a time.

As the idea of renting apparel catches on, Hunsicker said the retailer mindset is shifting now that these fashion-subscription services are becoming “normalized, public and part of the lexicon.”

When approaching retailers a year ago, Hunsicker said they weren’t necessarily resistant to the idea of CaaStle but wanted to understand how the service would aid with customer acquisition, boost share of wallet, potentially cannibalize or complement their e-commerce business and better monetize inventory. Prospective retailers were understandably curious in learning the answers to those questions. “Now that we have the data behind us, it’s easier to talk to new retailers,” Hunsicker added.

Both Ann Taylor and NY&Co., whose customers heavily fall into the coveted “wealthy millennial” demographic, make just a portion of their total inventories available through their CaaStle-powered programs. That’s because the rental business works better with durable garments that can withstand the wear and tear of high-volume wearing and cleaning. Plus, consumers are more likely to buy the basics and closet staples, like jeans or a black pencil skirt, that they’ll naturally reach for repeatedly. But a chartreuse embellished sweater? For many, that’s a one-and-done kind of style statement that doesn’t need a full-time position in the closet. Which is to say, clothing rentals seem to be the best fit for the more fashion-forward and riskier styles that could be in one moment and out the next. Why invest in a trendy piece you’ll wear for a month and then let languish in the back of your closet till kingdom come, when you can rent and repeat, and leave the clean-up to someone else?

Hunsicker said that after getting up and running with CaaStle, retailers often eventually start designing items specifically for the rental business. “Over time, you’ll find people will start making designs specifically oriented for this kind of market,” she said. “They pay more attention to durability and fabrics, and take a little bit more design risk because they’re not worried about having to monetize and sell these items.”

A service like CaaStle can help brands develop stronger relationships with casual fans, according to Hunsicker. “It’s our way to engage consumers that like your brand but are not as engaged as you’d like her to be,” she explained. “Because of the pricing model, CaaStle is a way for her to experience nine to 10 items a month, or the equivalent to buying one. It’s meant for deep brand immersion.”

Though so far existing retail customers are focused on women’s apparel, Hunsicker said CaaStle has been in conversations that both men’s and children’s wear companies, not just the “mainstream mall brands.” While women have always loved variety in their closet, for men CaaStle’s value proposition is a bit different,” Hunsicker explained. “For men, it’s more of a utilitarian play—not having to do laundry or dry cleaning,” she said. “I think men are taking a more active role in thinking about how they dress and present themselves.”

Luxury and high-end brands also have shown interest in the rental model, perhaps as a means of attracting a younger customer who eschews the commitment of purchasing and wants to keep her wardrobe in step with the latest Instagram trends. “In the premium space, there’s a ton of interest,” Hunsicker said. “It makes a lot of sense for a consumer to subscribe to a couple of her favorite brands.”

CaaStle employs 450 and operates two warehouse-and-dry-cleaning facilities, in the shipping hubs of Columbus, Ohio, and Phoenix, Ariz., which serve the East and West coasts and get returned items in and out the same day. Hunsicker declined to disclose the volume of apparel each facility can accommodate.

When garments reach their end of life, Hunsicker said CaaStle donates to charities that can take a large volume of clothing, moves apparel to jobbers and secondhand stores, and even ships clothing overseas—“whatever the retailer wants us to do. We work with retailers to customize this,” she explained. So far, no retail partner has asked the company to begin recycling worn-out garments, as companies like H&M and Levi’s have done to reduce reliance on sourcing virgin materials.

CaaStle will be announcing a number of new clients in the coming months and debuting new features to meet customer demand, Hunsicker said. “Like any B2B company, your customers drive a lot of your innovation,” she added.

Some of CaaStle’s new features will help retailers understand how data from the rental service is impacting their core retail business overall. They already have a number of different ways to access CaaStle data, including a dashboard, data feed and reporting capabilities.