COVID-19 was a double-edged sword for fashion rental platform Designerex, according to co-founder Kristen Kore.
On the one hand, the pandemic decimated events across Australia, which in turn wiped out a majority of bookings on the fashion rental website. That's because every single booking on Designerex is to someone that's attending a special event or occasion.
On the other hand, that pesky virus fast-tracked the sustainability movement, so much so that the taboo around renting fashion began to diminish.
And so, by the end of 2021, Designerex recorded a 650 per cent growth in monthly active users, with Kore at the time telling Business News Australia that she expected $50 million worth of dresses to be booked over the next 18 months or so.
This was at a time when the rental platform boasted more than 26,000 designer dresses from 863 brands. Today, Designerex has just over 50,000 active listings, with 100,000 listed on the platform to-date.
Kore says the pandemic disruption has paved the way for the business to scale further, with expectations to quickly triple its revenue following a capital raise to be launched shortly.
Kore adds that Designerex’s unique business model gives it a leg up over other rental platforms.
“We were the first peer-to-peer fashion marketplace to launch,” Kore says. “We were building a custom technology platform in 2015, and we had to custom build the platform because nothing existed that could service the problem that we wanted to solve.
“When we're creating this, the only other rent in fashion was the inventory-heavy businesses, like Rent The Runway in America. It's very inventory heavy, and not scalable.
“They're still in the US market only because of that business model.”
Designerex has already entered the US market with a dedicated online space initially launched in 2019, outside of its already established Australian market, and is planning to target the United Kingdom and Europe next.
“With the right backers and capital, we expect to be in 190 countries - just like the likes of AirBnB and Uber, because we are purely a technology company," Kore says. "We don't buy any inventory. And we never touch the inventory.”
The current model is essentially consumer-to-consumer, where anyone can list their designer labels on the website for rent.
Designerex has also recently launched a new proposition alongside Shopify, where fashion brands can connect their website to the fashion rental business.
“No one else is doing it,” Kore says. “But we're showing a potential profit return on a garment that’s worth over $250.
“Based off our own data, and our own case studies of dresses they've rented on the platform multiple times, we are giving the customer at the point of sale on these boutiques and fashion brands, a potential profit return. That’s a very important data point that's missing currently, is that dresses and special occasionwear is an asset, if it's then sent listed on the rental market. We can automatically list that garment once they've purchased it.”
Part of this also includes revenue share back to the brand for every rental booking that occurs, as well as offering a new touchpoint for brands to reach new consumers.
“We've identified a lot of customers who have never bought from a particular brand, but rented a designer garment from someone on the platform and then fallen in love with that brand through rentals.
“And then we've got our lenders who have a little bit more spending power as well. So they're buying a lot of new season stuff. They're creating a rental business on the platform. They'll pop up a logo, and they'll be really keen on getting reviews and things like that. They're really keen on turning a profit on each garment.
“For us, it's providing the right data to them, and enabling them to make as much money out of each garment possible. So the more customers we connect, the less fast fashion is consumed.”
Looking ahead, Kore says she and her team are doubling down on its technology, because it is very unique and custom built.
“So we can do anything with it,” she says. “And we're able to do really unique partnerships that set us aside from the others in the market. We've partnered with Uber to offer two-hour delivery - because, really, we've got 50,000 dresses listed on the platform and we've got over 7,000 dress owners that make up those listings. So we’ve essentially got 7,000 distribution points around Australia to leverage.”