👗 Rental as The Future of Fashion with Rachel Hennessy from Happy Days
Come with us this week as we discover Happy Days and explore the complexities of fashion rental as a business model.
Hello Tech Powered Luxury listener, and now reader!
🎙️ This week, we are thrilled to bring you an exclusive interview with Rachel Hennessy, founder of fashion rental Happy Days.
🌟 Are you new here? Welcome to our amazing community - keep reading to discover everything about Tech Powered Luxury, our Community Rewards and how this newsletter came to life.
✨ I’m Beatriz Barros and I’m very excited to have you reading us today!
👀 TL;DR
Rachel Hennessy leveraged her experience at KPMG and Google before launching her own fashion rental Happy Days in Ireland. The driving force behind the project? Searching for a solution to replace countless one-time purchases that would eventually go to waste.
The starting approach set the grounds for her success: understanding what people around her were looking for, and how to include that in her business. The result is a consumer-centric business model that is translated into different services and experiences.
Rental as a business model is nothing new in the industry, but ensuring profitability, let alone long-term business health, is still a tricky balance between operating costs and revenues.
💎 Exclusive Question 💎
Who has been your most unexpected mentor, and what did they teach you?
“A very special woman walked into our store only a month or so after I opened. I had never met her before but we quickly became friends. Pat Kane (owner of Reuzi and a sustainability advocate in Ireland) is not only a great friend but a mentor to me too.
She has taught me what my time is worth and to always advocate for myself, and is only ever a voice note or phone call away. I know for a fact she is always mentioning my name in rooms I am not in and has gotten me so many amazing opportunities over the last 2.5 years.”
💡 From a personal pain point to a collective solution
Rachel Hennessy’s entrepreneurial journey is a masterclass in recognizing and addressing consumer needs. As a professional who transitioned from KPMG and Google, Rachel’s unique perspective helped her spot a significant gap in the fashion market during the pandemic.
“I was, like many people, working from home, ordering a load of packages, from all the terrible fast fashion brands and started to feel that little bit of guilt, and was trying to maybe look for a few different solutions: I started buying my own clothes secondhand, and that's when I realized there was just this huge amount of designer dresses on these platforms for sale for a fraction of the price.
I was thinking, what if I could buy them at that lower price? You'd get more to offer everybody and open up a rental store.
So that's kind of how Happy Days began in 2021.”
She didn’t just stop at the obvious pain points; she delved deeper into the consumer experience, asking people directly a number of questions that helped her identify what was lacking in the space. She read the results with a clear mission in mind, “I just felt like there was a huge gap in the market, and I really wanted people to rent something rather than buy something.”
It was not only the sustainable aspect of it, but the whole feeling that pushes people to buy or rent something:
“People look nicer when they're in better quality outfits, and they feel so much more amazing. We want anyone, no matter their size, age, style, to be able to rent something from Happy Days. I really wanted to capture that and to get people on board with rental.”
The result? A business model that goes beyond just renting out dresses but that through several different actions, also enhances the overall shopping experience.
Funnily enough, the number one answer she got was all about convenience: “people wanted a shop with free parking”. The main driver was not at all related to the product, the price point or the brands available, it was all about a hassle-free experience.
A brick-and-mortar store facilitates occasion renting by allowing people to come in and try out their outfits. It also maximizes the chances of making a customer happy - if they didn’t find what they were looking for, or perhaps it didn’t fit them well, her store associates are ready to provide personalized advices because they know the fit and feel of each and every garment in the store. She preaches an approach that puts the well-being and the self-steem of her clients in the center of the experience.
Other in-store activities help bring in a client that is very much accustomed to living an omnichannel customer experience: online and offline are rarely separated, and often much of the discovery and acquisition of new consumers comes from online awareness to offline experiences: “we've done a lot of swap shops, sewing classes, and loads of different events in the store”.
It’s all about understanding why and where your customer connects with you, allowing them to decide whether they want to discover, engage and convert online or offline. The important thing is to ensure the values you communicate are coherent and the experience is seamless regardless of the touchpoint.
For Happy Days that means being inclusive in their communication on social media, and allowing the customer to find a wider range of sizes and styles rather than the classic sample size, trendy outfits.
“The first time we ever posted a customer photo it just blew up. And then we just knew that people wanted to see real people in the dresses. I think that really helped us: we show different people, different ages, people in different style of dresses to really showcase that we have something for everybody.”
♻️ We’ve talked about sustainability and circularity a couple of times here at Tech Powered Luxury’s substack. If you haven’t already, check out these articles below:
📈 The Business Model of Fashion Rentals
Rental as a business model is nothing new in the fashion industry, but ensuring profitability and long-term business health is a tricky balance between maintaining a fresh, appealing inventory and managing the operational overhead that comes with high turnover.
One of the primary challenges is inventory management. To stay relevant, rental businesses must continually update their stock to reflect current trends and customer preferences. On one hand going straight to brands for unsold inventory can be tricky, as many brands see it as a move that dilutes their brand equity, especially for luxury, as you would make the product too available for use and not necessarily for purchase (let alone considering this is not a direct channel, so less profitable).
Sourcing items involves significant investment, as inventory must be purchased upfront. To mitigate this, some companies adopt a peer-to-peer model, as a marketplace, leveraging user-provided inventory to reduce capital expenditure and spread the risk and costs across the entire business user base. This not only diversifies the product range but also fosters a community-driven platform. On the downside, rentals have little curation power on what goes up in the platform.
The logistics of a rental operation are another substantial hurdle. Each item must go through a meticulous process upon return—inspection, cleaning, and any necessary repairs—before it can be rented out again. This is like running an e-commerce business with a 100% return rate. Investing in state-of-the-art inventory management software and partnering with reliable logistics companies are critical steps to streamline these operations.
Customer service is another pillar crucial to success in the rental industry. Given the high likelihood of logistical issues, size mismatches, and last-minute changes, having a responsive and helpful customer service team is essential. This ensures that any issues are promptly resolved, maintaining customer satisfaction and loyalty. Additionally, educating customers about sizing and fit through detailed guides, and allowing users to post images and comments of fit, material, and other product qualities helps to diminish customer service tickets and unnecessary exchanges or returns.
Different business models within the rental space offer various paths to profitability. Subscription models, where customers pay a monthly fee for access to a rotating wardrobe, provide a steady revenue stream and enhance customer retention. This model also allows for more efficient inventory utilization, as items are cycled through more frequently. Another approach is to integrate sales into the rental business, offering items for purchase through auctions or direct sales. This not only provides an additional revenue stream but also helps manage inventory by moving older items out of circulation.
That being said, as Rachel Hennessy’s Happy Days shows, step one is ensuring you know what your customer base wants (and that others are not currently offering) and make that your strength.
In the meantine, the opportunity presents itself for startups that focus on logistics, product care and repair and customer service specialized for the rental market. Do you know any with an innovative idea to these very common pain points? Let us know!
🎁 Community Rewards
We’re doing things differently this week!
To celebrate the launch of our episode with Happy Days fashion rental founder Rachel Hennessy, our host Ashley McDonnell is launching a collection on the platform with exclusive pieces from her wardrobe, including looks from her favorite Irish and international brands.
The collection includes pieces from Irish brands Aoife McNamara, Caoimhe Murphy and Sorcha O'Raghallaigh as well as limited edition suits from Paco Rabanne and Nina Ricci. The star piece from the collection is an emerald green silk and ostrich feather gown from Taller Marmo (RRP €2,200) which Ashley wore to the Forbes Global Fashion Gala in 2023 where she rubbed shoulders with guests including Hilary Clinton, Jessica Alba and even received a compliment on her look from none other than Catherine O’Hara, known for her iconic roll as Moira in Schitt’s Creek and the beloved Kate McCallister in Home Alone.
To be in with the chance of winning a €250 voucher to spend on any rentals from Happy Days, make sure you head to the post below on Instagram, tag two friends and share!
🍀 Good Luck!
Before you go: you still have until July 17th to grab a voucher for a treat or two of the amazing Grá Chocolates. Don’t know what we’re talking about? Check our Community Rewards of two weeks ago here (you’re welcome):
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🎙️ Upcoming Conversation: Matthew Drinkwater from the London College of Fashion
Tune in next week where fashion meets innovation: we’re exploring The Fashion Innovation Agency with Matthew Drinkwater. A must for any tech and luxury lover.
See you next week,
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🎙️ Launched as a podcast on November 1st 2022 by Ashley McDonnell, Tech Powered Luxury has since nurtured a vibrant community of experts passionate about the evolving synergy between technology and luxury. We have reached over 20 million people through the podcast, social platforms and media, and have hit +500K downloads.
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🪄 Our weekly newsletter is curated by Beatriz Barros, a seasoned expert in luxury and technology based in Milan, Italy. A dedicated collaborator of Tech Powered Luxury, Beatriz applies her expertise as a Fashion & Luxury Business Consultant at Retex—Italy's forefront company known for integrating strategic acumen with operational excellence to solve complex retail-oriented projects for fashion & luxury brands. Additionally, she educates aspiring professionals at Polimoda, renowned for its focus on Fashion Design & Business in the vibrant city of Florence, Italy - also where she first met Ashley during one of her lectures on the future of luxury: a match made in academic heaven. 🌈