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Social

As society shapes beliefs, and values of consumers, there is an increasing tendency (psychographics) among consumers believing that they are entitled to have the best things (luxury goods) in life; prone to a lifestyle of extravagance. However, not many of these consumers have the ability to obtain a lifestyle that is beyond their purchasing power. (Evers 2006)

Analyzing behavioral data of consumers’ purchasing preferences and habits (e.g. the number of times an item has been browsed online), provides valuable information regarding consumer buying behavior (e.g. type of purchase, frequency, average amount spent, occasions for higher spending, age, gender etc…); enabling companies to decide which (popular) brands to stock accordingly. Such information includes consumers’ emphasis of having brands like Gucci, and how these brands affect their social status (e.g. perception by society). Thus, companies can be assured of the designer fashion rental industry’s potential and sustainability. (Socio-culture environment)

Demographics such as population age mix provide information that enables companies to identify potential business opportunities in different countries. A national population with the majority age population ranging from 25 to 40, provides potential opportunities for designer fashion rental , as these group of consumers place higher emphasis to fulfill their self-esteem needs (Maslow 1943); carrying designer brands and appearing trendy in front of their peers (status recognition). In addition, they also have the purchasing power to rent different brands.

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Economic

A country’s employment rate and growth in GDP are good indicators of the target market’s purchasing power. For example, when the employment rate has increased (or is expected to increase), more sales can be expected, as more consumers have greater purchasing power and are willing to spend on popular designer fashion items.

Recession (financial statistics) may prompt consumers to consume less designer fashion items due to decreasing purchasing power. Thus, resulting in a higher likelihood of consumers renting rather than purchasing designer fashion items, as it may be more cost effective for them.

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Technological

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Increasing use and availability of wireless broadband technology, makes it more accessible for consumers to buy items off the internet in developed countries such as the United States; enabling consumers to come in contact with haute culture at their convenience. Improved online security encourages consumers to shop online more often with confidence; potential for online retail.

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Competitive

Identifying competitors and projection of sales (data) gives competitive edge, as information on competitors performance, offerings, and pricing schemes enables companies to determine their strengths and weakness as compared to competitors, and improve their marketing(mix) strategy (e.g. determine and modify pricing strategies to stimulate, and cater to demand from different segments in the target market)

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Regulatory

Greater concern for privacy and personal information collection online restricts/limits the way in which the collected information of consumers can be used.

Legislation on Internet taxation, spam (e-mail) and domain names, can affect pricing on items sold online, as well as the credibility of the company’s website.

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Conducting online surveys, and receiving consumer feedback, also allows companies to learn more about consumer preferences. Hence, they would be able to provide to consumer wants, needs and demands efficiently and accurately, through value-pricing of the 4Ps (marketing mix).

Products

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Consumer satisfaction in regards to variety of bags and stock availability

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Price

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Consumer feedback on pricing schemes as compared to competitors

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Place

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Ease of the purchasing process (choosing, receiving and returning item) and the satisfaction derived.

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Promotion

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Consumer feedback on attractiveness of current promotions, and what they expect for future promotions

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Therefore, with better understanding of the mentioned above, coupled with overall customer experience rating, these companies can improve on their marketing strategy and cater to the consumers’ needs and wants, more efficiently and productively (e.g. improvement easily, stocking up on more profitable items); monitoring consumer preferences, and market demand.

References:

Barlyn, S 2008, ‘The skinny on handbag-rental services’, Wall Street Journal – Eastern Edition, Vol. 252, Issue 20, pp. 2.Evers, R 2006, ‘It’s nice to share’, Brand Strategy, May, pp. 8.Han, J 2008, ‘Pocket-pinched opt for rental luxuries’, Korea Times, 4 July 2008Maslow, A H 1943, ‘A theory of human motivation’, Psychological Review
Bag Borrow or Steal, viewed 21 August 2008 .

Fashion Hire, viewed 21 August 2008 .
Sac Deluxe, viewed 21 August 2008 < http://www.sacdeluxe.fr>.