The fashion world is on the cusp of a digital revolution, and we’re not just talking about digital designs and runway shows. The recent headline of “Rent The Runway Increases Prices Amid Financial Struggles” is a testament to a seismic shift as fashion embraces artificial intelligence and confronts the same turbulence that the tech world has been navigating. As we delve into the implications of this story, it’s worth asking: What will the AI-empowered future of fashion look like?
First, let’s unravel the aforementioned news piece. Rent The Runway, a popular online clothing rental service that allows you to wear high-end designer clothes for a fraction of their retail price, shook the fashion industry—and its subscribers—by announcing a significant price hike.
The decision, believed to be a result of financial struggles, saw the fashion giant point towards “steep price increases” across the industry in recent years as the cause. While the reasons cited include financial hurdles and an attempt to keep up with inflation, there’s more to the saga. Behind the scenes, we believe, there’s an undeniable undercurrent of technological disruption.
It’s not just about the retail price of products or the cost of operations—AI technologies have begun to shape the face of fashion, from production to storage, from marketing to sales, and all that’s in between.
To back up this argument, one can juxtapose Rent The Runway’s struggles with the AI bubble inflation, as discussed by Torsten Slok, the chief economist for Apollo. Although it might sound like an unlikely connection, the AI bubble and the Rent The Runway case actually boil down to the same core issue: striking a balance between offering products—be it fashion or tech—at a price consumers are willing to pay and ensuring these businesses remain financially viable.
Looking at the Rent The Runway example, it’s clear that customer expectations are changing as technology advances—expectations for more choice, convenience, personalization, and value for money. At the same time, price sensitivity continues to be a critical factor, and as seen from the backlash against the recent price hike, customers aren’t always willing to foot the bill for enhancements in service.
So, what does this mean for the intersection of fashion and
technology, and specifically, artificial intelligence? First, AI-powered tools have already started to transform the industry. From AI-driven personal shoppers that recommend outfits based on personal style to 3D fitting rooms and chatbots that enhance customer service, the integration of AI in fashion is undeniable. In that context, increasing operational costs, as witnessed by Rent The Runway’s price hike, may be the growing pains of an industry on the brink of transformation.
At the same time, the specter of the AI bubble hovers menacingly. AI investment has undoubtedly escalated the market value of the tech industry, with the top 10 companies in the S&P 500 now all tech names. As cautionary as the comparison may be, the rise and diversification of AI in the fashion industry might likely follow a similar
trajectory. Much like the AI bubble, the digitalisation of fashion, marked by cash-burning efforts to break new technological frontiers, risks leaving an overinflated market.
As these two worlds continue to collide and intertwine, the industry is tasked with a delicate balancing act. It must continue to innovate, deploying AI in ways that significantly enhance customer experience, keep costs down, and the appeal of their products high. Adapt or perish, as they say, has never been so true.
Whether it’s fashion or any other industry, the challenge remains to deliver the future now, but at a pace we can all afford. In the words of legendary designer Coco Chanel, “Fashion is not something that exists in dresses only. Fashion is in the sky, in the street; fashion has to do with ideas, the way we live, what is happening.” The same could be said about AI—it is all around us, revolutionizing the way we live, and impacting industries far beyond tech.
