Australian peer-to-peer site Designerex has taken the dress rental approach one step further by allowing consumers to rent their clothes directly to others without the need of a warehouse. Because of the peer-to-peer nature, the company has already begun its expansion into the US market after launching in Australia in 2016.
Co-founders Kirsten Kore and Costa Koulis said they already have 1,600 dresses listed on the US site. Kore said they have always had a global vision from the beginning and wanted to enter a second market as quickly as possible.
Kore said peer-to-peer platforms and sharing economy business models allows companies to expand quickly.
Koulis said “To put the [US launch] in perspective, we started in Australia with 200 dresses. It’s already starting off with eight times more than we started in Australia and we just launched so very keen to start growing it over there and replicate our success in Australia.”
The idea of Designerex came when Kore was frustrated with having to spend hundreds of dollars on a dress for one night. To stop the overspending she found some girls on social media who were renting out their dresses for a night, however she said it wasn’t a secure way of doing business.
That is when Kore spoke to co-founder and co-CEO Costa Koulis to kickstart Designerex.
Kore and Koulis launched the platform in 2016 after building it throughout 2015. Kore manages the marketing side of the business and Koulis the technology side. They both collaborate when it comes to the business strategy.
Designerex has 15,000 listings in Australia, in comparison, warehouse-based rental site Glam Corner has more than 9,000 dresses available for consumers.
Koulis explained, “We are not restricted by wholesale prices. For us and our technology we don’t have to buy something at a wholesale price and sell it on to customers. At the moment we have about $10 million worth of clothing on the platform.”
Their website was built with the Ruby On Rails framework, Koulis said he saw larger platforms like Airbnb and Soundcloud using the same software.
He said Ruby on Rails is more scarce and expensive than WordPress or using code with PHP but ultimately, it’s more scalable.
Although it’s a platform for renting dresses Kore said it is purely a technology company as they are not purchasing any inventory.
Kore said both the customer and renter gain something from using Designerex.
“From the customer’s point of view they’re actually able to still purchase something and make some money back. And then from a renter point of view, there is an extremely larger choice,” she said.
When asked if they would expand in to men’s clothing Kore said they get that question a lot but aren’t really thinking about it.
“We may look into but even then we may look into focusing on maybe bags or accessories more rather than going into men’s clothing.
“We just felt that we’re solving a bigger problem for females that doesn’t really exist as much for men,” she adds.
Securing the platform
With anything P2P comes the question of security — users on the platform are sending their expensive outfits to a stranger with the hope they send it back in one piece.
Kore said it comes down to the whole purpose of building a secure platform.
“Firstly, you have to transact through the platform for a booking to go through. We capture credit card details. We’ve also integrated tracking facilities so the owner can basically enter the tracking number into their dashboard on the platform and they get automated tracking updates.”
They also use that facility to track the item of clothing and see if its been returned. Designerex also has a private messaging function so the lender and renter can message each other through the platform.
Kore and Koulis are able to follow up anyone if they need to. Since being active, they have only had minor issues such as late deliveries and only a few garments being lost the Australia Post black hole.
Kore said, “Ultimately we have a strict resolutions process that we follow. There’s terms and conditions that renters and lenders have to adhere to. We do have the authority to charge your credit card or peruse late fees or damages fees.”
Koulis continued saying they have introduced integrated ID verification.
“We were the first to introduce ID verification into a dress sharing platform. We did that in partnership with a company in Silicon Valley, it is the same type of ID verification used by Airbnb and Easyjet.
“What it means is you upload your driver’s licence or your passport to Designerex and then the ID verification scans your licence for legitimacy. If you are verified, you get a verified ID badge on your profile.
“For a girl that owns a dress and is renting out someone else, or lending it out to someone else she can actually request that you verify the ID before she sends it to you,” Koulis said.
With sustainability becoming such a large part of ecommerce companies business model, Designerex believes it is having a major impact within the sector.
Kore said the company is increasingly become a part of the conversation. She explained, “This could have a huge impact on sustainability and fast fashion.
“We do believe we’re taking people away from purchasing fast fashion, and we are giving them a service that they need, which is wanting something new all the time. But they’re accessing higher end fashion or sustainably made and ethically made.”
Koulis said since millennials are the core users of the site, it is very important to that demographic that companies practice sustainability.