Peer-to-peer fashion rental apps are angling to go mainstream in 2025

Clothing rental has become an increasingly popular option for shoppers looking for a cost-effective, sustainable way to try out new fashions. Until recently, though, much of the space was dominated by giants like Rent the Runway and Nuuly: companies with million-dollar market caps and partnerships with big-name brands. But now, smaller peer-to-peer rental services, which shoppers use to rent items from each other’s closets, are gaining steam and racking up thousands of users. 

Many operate on an “as needed” basis, eliminating subscriptions and lowering the barrier to entry. Others tap into the interests of Gen Zers and millennials by making rental feel more like social media, giving users a peek into individuals’ closets. While each app has a different assortment, all provide a way for shoppers to hold onto cash. Lenders can rent out their items and make passive income on pieces they’re not wearing, while borrowers can avoid paying full price for pieces.

The platforms are encouraged by early numbers. Pickle co-founder and CEO Brian McMahon said that in the fourth quarter of 2024, “We started to do more rentals on a weekly basis than we did in our entire first year combined.” Pickle also tripled its monthly active users year over year and experienced 80% year-over-year organic growth in 2024. Pickle, which raised an $8 million funding round in 2023, has three delivery methods available across the country: hand-off, national shipping and same-day courier delivery.

Tulerie co-founder Violet Gross told Modern Retail that when Tulerie first launched, people were confused by the idea. “Now, there are so many competitors in the space that [peer-to-peer rental] is becoming commonplace,” she said. “The taboo is finally shifting and diminishing.”

Why peer-to-peer rental apps are having a moment 

While inflation has come down, many shoppers are continuing to watch their discretionary spending. However, by lending out items on peer-to-peer rental apps, users can make money from pieces they are not wearing. On the other hand, they can also use these apps to rent clothes for cheap.

Pickle has offered national shipping on listings since its early days, but it lets lenders decide which delivery method they prefer to offer. The majority of Pickle rentals, nearly 70%, happen through same- or next-day courier delivery. At first, that option was limited to Pickle’s home market of New York City. Due to user demand, in mid-2024, it expanded the offering to Los Angeles, followed by other major cities across the country. 

“We’re seeing an increasing volume in other cities such as Miami, San Francisco, Dallas, Chicago [and] Boston, where users are also starting to do door-to-door courier delivery,” McMahon said. Occasion-specific renting is also on the rise at Pickle. Between 2023 and 2024, Pickle saw a 519% increase in wedding-related rentals and a more than 303% spike in ski-related listings. 

Nada Shepherd, the co-founder of peer-to-peer resale and rental app ReSuit, likens the interest in peer-to-peer rental to a hybrid lifestyle. “Sometimes you need a nice purse, but you don’t need it all the time,” she told Modern Retail. “So why not monetize what’s already around you?”

Likewise, Gross told Modern Retail that many Tulerie users think of their closets as assets they can make returns on. In fact, members often buy pieces when they’re new and rent them out to recoup costs. One lender told her that doing so feels like buying something on sale. 

Aimée Brown, chief merchandising officer at Stork, a digital warehouse for luxury wholesale, believes peer-to-peer rental will continue to be a go-to option. “I think it’s a really good way to keep money moving when everyone’s conscious of budgets,” she told Modern Retail.

How the model differs from traditional rental services 

Unlike subscription-based rental services, peer-to-peer apps rely largely on users’ closets and count on lenders to provide good customer service to keep renters happy. 

At Pickle, lenders can set a flat rental price and availability window for each piece uploaded. The rate for each listing is generated based on an algorithmic suggestion from Pickle, which is determined based on factors like the item’s retail price and demand for that brand. Pickle renters pay the listed price and delivery fee and are responsible for any late fees on items kept longer than the agreed-upon period. Lenders then keep 80% of the rental’s earnings, while Pickle takes a 20% cut. 

According to Pickle co-founder and COO Julia O’Mara, the app’s user acquisition growth remains largely organic and through word of mouth. “The best way people are finding out about Pickle is by seeing someone wearing an amazing or unique outfit rented on Pickle” at occasions like birthdays or holiday parties, O’Mara said.

The overhead is also much lower on peer-to-peer rental services than it is for subscription-based rental services, which hold inventory in warehouses and handle reverse logistics.

Sucharita Kodali, retail analyst at Forrester, said that much like other peer-to-peer marketplaces, peer-to-peer rental apps are pure marketplaces in which the costs of fulfillment are largely left up to the lenders and sellers. Kodali likened the model to apps like Turo for cars and Airbnb for vacation rentals. 

Once a user starts renting their items out through one of these services, they get access to a relatively easy passive income stream, Kodali explained. “Right now, these apps seem to be for more formal occasions, but I can see [them] being a solution for when you travel and don’t want to carry a suitcase of clothes,” she said.  

The apps’ plans for 2025

Now, encouraged by early growth, peer-to-peer rental apps are making changes to boost their numbers in the year to come.

Tulerie, for instance, overhauled its membership structure in November. Previously, anyone who wanted to join Tulerie – lender or borrower – had to sit for a virtual interview. This allowed Tulerie to vet new members, but the process was time-consuming. Now, new members can join the platform without interviewing. As a safeguard, they can only borrow items that retail for up to $700. If users want access to more expensive items, they’ll need to interview.

Users are responding positively to the change, Gross said. In the first six days that Tulerie updated its terms, its download and new member rate increased by 400%.

ReSuit’s Shepherd is also thinking of changes she can make to her platform. The app, which was founded in 2019 but officially launched in 2023, had some 1,000 users as of fall 2024.

Growth has been slow, Shepherd said, explaining that she does not have the funds to pour into advertising. To help with this, Shepherd is hoping to use AI to “retool and manage [ReSuit] at the back end.”

“I’m hoping [that] will free up more resources to funnel into marketing,” she explained. 

Shepherd is also hoping to bring more designers onto the platform. In 2023, ReSuit made it so that any designers it partners with won’t have to pay credit card processing fees for their first 12 months.

At Pickle, product discovery has been a major focus and will continue to be so in 2025. The company is hiring for roles across departments such as product growth and marketing and will be onboarding more engineers to help improve the user experience. 

“Some of the more successful features that we rolled out in 2024 that drove a lot of rentals are things like our ‘similar products’ feature,” said McMahon. The AI-based tool scans product images and recommends similar products based on those images to users. 

At the end of 2024, the company also rolled out a feature called “autofill with AI,” which McMahon said helps cut the listing upload process in half. Pickle also has a new tool called bundles, which allows renters to group together a number of items from a closet to rent at once.

The pros and cons of peer-to-peer

Kodali said that peer-to-peer rental apps are still in their infancy, so there isn’t enough data to assess their success yet. Moreover, offering consistent supply and keeping deliveries localized “are crucial to [keeping] the costs manageable for fulfillment,” she said. “That means a platform needs lots of local offerings to make it work. Whether or not there is adequate supply that works for everyone remains to be seen.”

On the other hand, Kodali said analysts are seeing growth in areas like secondhand and the “buy nothing” movement. “[Peer-to-peer rental] isn’t quite ‘buy nothing,’ but it’s purchasing minimally, and I do think that it will grow over time,” Kodali said. “People need to get into the habit of borrowing pre-owned clothes, but if feedback is good and bad, lenders and borrowers are weeded out; this seems promising for consumers and good for the environment.”

Making the listing process seamless is key to helping renters and lenders connect over the right assortment, said Pickle’s O’Mara. For instance, she said, “We recently rolled out a feature that allows lenders to create custom discounts and promos to be used on their closet or [a] specific assortment, like their holiday collection.” 

ReSuit’s Shepherd, who used to work as a fashion designer, said it’s been a bit of an uphill battle getting more people to understand the value of fashion rental. “At the end of the day, it comes down to consumer behavior,” she said. “And consumer behavior is not always aligned with consumer intention.” People may like the idea of renting clothes but might not actually do so regularly, she said.

Still, Shepherd said she is staying positive about peer-to-peer. “I believe in the vision long-term,” she said. “It’s just like with Airbnb and Uber. It wasn’t first of mind, and now it is.”