Inside Gen Z's obsession with renting everything

Like a typical millennial or elder Gen Zer, the outside of my fridge is overrun by wedding save-the-dates and engagement announcements. That means I spend a lot of time scrolling the clothing rental app Nuuly, searching the grid for dresses to wear and hoarding the designs in my virtual closet. I've spent enough time closely critiquing each look that I've even started to recognize dresses worn by other guests and have a pretty good idea of when I see a fellow Nuuly-ier on the dance floor.

Over the past decade, fast fashion has come under fire for its environmental impact and exploitation of workers for low wages. In turn, thrifting and meeting up with strangers from Facebook Marketplace became chic — more than 1 billion people it monthly — and apps like Poshmark and Curtsy have made thrifting seamless no matter how far away you live from the used Kate Spade bag you want. That mindset shift has made way for clothing rental apps like Nuuly, BNTO, and Pickle, which give shoppers access to current, high-quality, and designer items at deeply reduced prices.

Nuuly, owned by Urban Outfitters' parent company Urbn, hit its first profitable year in January. Pickle, an app that facilitates rentals from one person's closet to another — a sort of upscaling of ransacking your sister's wardrobe — has more than 230,000 items available. BNTO, a clothing subscription and resale app that also sells new clothing, raised $15 million in a Series A fundraising round earlier this year. "For Gen Z, style isn't just about affordability — it's about discovery, sustainability, and personal expression," Notable, the VC firm that led that round, wrote last month. The clothing rental market is valued at around $2.6 billion, and projected to top $6 billion over the next 10 years, according to research firm Future Market Insights.

Rather than seeking status by purchasing trendy or designer items, sporting secondhand and borrowed pieces has become "cool to do," says Shawn Grain Carter, a professor of fashion business management at the Fashion Institute of Technology. "It doesn't signify your financial status within the world. It has a certain cachet that it did not have before."

Fashion sense has become far less about the names in your closet, and more about the new, bold pieces you can post once to social media.

Rent the Runway defined the clothing rental market when it launched in 2009, but the focus was high-end designers for workwear and dress-up occasions, and the company slumped during the pandemic when there was no place to wear a Reformation gown. Nuuly captured younger, mid-tier shoppers, with the options to rent from more accessible brands like its own Urban Outfitters all the way up to pieces that sell for a few hundred dollars. The company already had a steady production line from its brands (Anthropologie and Free People are part of the family, too), and Grain Carter tells me that may make it easier for Nuuly to control and scale its offerings.

Apps like Nuuly also came about after other companies normalized renting once seemingly intimate items and spaces. Need a cheap room to crash in? Airbnb. A private driver at your door? Pick to sit in someone's backseat on Uber. Taking a risk on a dress that's already been worn by several strangers doesn't seem so strange anymore. "Without all of those things, we probably wouldn't have gotten to where we are today," says Brian McMahon, cofounder and CEO of Pickle. "Borrowing someone else's clothes is probably a bit more intimate than sitting in the back of someone's car using a spare bedroom."

The acceptance of sharing is clear in the demographics: Some 60% of Pickle users are Gen Z, while the 40% are millennials, according to the company. And it's not just clothes — there's BabyQuip, which rents strollers and car seats to traveling families, and Tblscape for glassware, plates, and table decor to host events. According to consumer insights research firm GWI, one in five Americans said in a 2022 survey they prefer to rent an outfit for a one-off event, and as of this year, 5 percent are subscribed to clothing, cosmetics, and accessory shipping services, while 12% have previously subscribed (the survey included men and women in the US, but these types of service overwhelmingly cater to and are bought by women).

On TikTok, people post videos of their hauls, similar to when they splurge on a shopping trip — but showcasing their rentals straddles both consumerism and the de-influencing movement, a social trend that discourages people from buying products with abandon. Renting gives people the dopamine of a shopping spree without the guilt.

All of that word-of-mouth and influencer marketing seems to be paying off. Nuuly reported this month that it now averages 400,000 active monthly subscribers. Pickle has expanded from its start in New York, and saw rentals increase by 195% in Los Angeles and nearly 500% in Miami this year. Rent the Runway announced it would double its inventory this year, with more styles in workwear, dresses, vacation, and casual clothing. As of July, the company saw its subscribers grow 13% year-over-year, and revenue for the quarter topped $80 million.

For renters, there's a potential killing to be made. Isabella De Murguia, a 27-year-old who works in consulting, has made more than $25,000 renting out her closet on Pickle over the past year. She calls the extra cash her "fun money," and she uses it to travel on luxe vacations to places like Mykonos. De Muguira tells me she started renting out pieces because she loves shopping and would splurge on several new outfits to wear on vacation or for events. But afterwards, they would sit in her closet, wasting away. Now, she spends just a few hours a week at most turning her closet into the circular economy; listing clothes, washing them, readying them for pick-up, and, in one case, hand-sewing little pearls back onto a popular top that lost some when worn by some of its 30 borrowers. "Most of the time, I will buy what I like," she tells me, rather than picking pieces just because they're trendy and might rent well. She's found, "what I like is generally what others will like as well."

That seems to be the case for many who are renting clothes. Several of my friends are among the group of Nuuly-pilled customers — the app has thousands of items to rent, yet those of us with very distinct styles seem to be gravitating toward the same pieces. I once went to look at reviews of a dress and saw a photo there of my best friend wearing it (she didn't like the fabric, and her review helped me steer clear of the same mistake). With the increased purchasing power of a rental subscription, maybe it's only a matter of time before we end up somewhere in matching outfits. At least we'll be able to send them back at the end of the month.

Amanda Hoover is a senior correspondent at Business Insider covering the tech industry. She writes about the biggest tech companies and trends.