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Rent the Runway targets girls aged 3 to 12 — is it a good idea to dress your kid in designer labels?

Subscription services like Rent the Runway are targeting kids, and so are other high-end products. Read More...

Subscription services have their eye on your kids.

Designer clothes and niche meal-plan delivery services are becoming increasingly available to the pint-sized crowd for parents with deep pockets. Rent the Runway, the high-end subscription clothing service for women reportedly valued at $770 million, will now sell girls clothes from designers like Fendi, Stella McCartney and Marc Jacobs.

Moms and dads can rent their daughters’ single outfits or up to four pieces of clothing at a time with the unlimited subscription service: $159 per month, the same price as an adult subscription. The initial launch will cater to girls’ sizes 3 years to 12 years; some items will be tailored for “mommy-and-me” looks. The service will launch the week of April 15.

‘Teaching children at a young age to value designer logos and luxuries can create expectations that they are entitled to the benefits of elite status.’

—Susan Whitbourne, a clinical psychologist at the University of Massachusetts, Amherst

But Susan Whitbourne, a clinical psychologist at the University of Massachusetts, Amherst cautioned against signing kids up to such a subscription service.

“Teaching children at a young age to value designer logos and luxuries can create expectations that they are entitled to the benefits of elite status,” Whitbourne told MarketWatch.

It may also set false expectations for children whose parents cannot afford a revolving wardrobe of different designer outfits. “This can lead to discrimination against their less affluent friends and further reinforce the class divides,” she added.

Subscribing your child to a luxury subscription service could also affect their self-worth, because it could tie their self-esteem to their appearance and how many luxury labels are in their closet, a recipe for future problems, said Whitbourne. “To teach children to buy into this model only sets them up for feeling inadequate. If they do always manage to rise to the top of the food chain, so to speak, their self-worth will always be built on fragile underpinnings,” she explained.

People are already spending more than they realize on subscription services: 84% of people underestimated how much they were shelling out on digital subscriptions such as streaming music, TV, movies and video games on-demand, in addition to subscription boxes that deliver clothes, groceries, cosmetics and toiletries, according to a recent survey from Waterstone Management Group found. Those surveyed guessed they spent $79.74 a month on average for subscription services and boxes, but they really spent an estimated $111.61 — a 40% increase — per month.

Subscribing your child to a luxury subscription service could also tie their self-esteem to their appearance, and how many luxury labels are in their closet.

But kids’ clothes is a lucrative market. The children’s wear industry is valued at more than $300 billion, according to Forbes, and Rent the Runway is just the latest retailer to target the designer kid’s clothing market.

Last year, two former Vogue employees launched Maisonette, a high-end children’s apparel, toys and home furnishings website with items like a $288 Chloe floral print dress and a $497 Parajumpers jacket. Another e-commerce site called The Collective Child, which launched in 2015, charges members $20 a month and hand-selects designer children’s wear ranging from $12 to $300 per item. Similar to Stitch Fix SFIX, -3.10% customers try outfits on, keep what fits and send back what doesn’t.

Some parent subscribers have spent $1,000 per month on new threads for their kids, the Collective Child told MarketWatch. That’s two-thirds of the monthly median rent in the U.S., and around the equivalent of how much it costs to feed a family of four for a whole month.

Rent The Runway did not immediately return a request for comment, but CEO and co-founder Jennifer Hyman addressed concerns moms and dads may have of exposing their kids to materialism at a young age in a recent interview with Vogue.

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She touted the rented outfits as a more environmentally-friendly option than clothes that get thrown away as soon as a kid grows out of them.

“Our members as well as the millennial generation are moms who care about the sustainability of their choices,” Hyman told Vogue. “This is a much better way to figure out getting dressed. Kids is the fastest growing part of the U.S. apparel market, but it’s also very wasteful. Just to be able to experience the fun and whimsy of all of these incredible brands and give kids the same Cinderella moment we’re giving their moms.”

‘I’d much prefer to shop local, go to the thrift store and find good quality, comfortable cotton clothes for my 20 month-year-old daughter.’

—Carly Hertica, 28, from Kingston, N.Y.

Still, some parents think luxuries like designer clothing should be reserved for adults only. Carly Hertica, 28, from Kingston, N.Y., will use Rent the Runway if she has a special event, but when it comes to buying for her 20-month-old daughter, she’s much more frugal.

“I’d much prefer to shop local, go to the thrift store and find good quality, comfortable cotton clothes for my 20 month-year-old daughter,” Hertica, who works in marketing, said. “I do not want to worry about her staining a dress with paint. She’s a kid, she’s supposed to play and wear comfortable clothes — she’s not my fashion accessory.”

The subscription services market is looking for new ways to grow. Some 15% of online shoppers have signed up for one or more subscription services, as the market becomes saturated with niche categories like face masks, craft cocktails, makeup, underwear and coffee, to name a few adult categories. Millennials and Generation Z will make up 45% of the global personal luxury goods market by 2025, a study by management consultancy Bain & Co. from 2017 found.

Experts say the children’s market will soon peak, and most parents don’t have the money to sign their kids up for a subscription service, considering 38% of consumers say they’re not even saving enough money for emergencies. One-third of American families struggle to afford enough diapers for their kids, making subscription luxury services too expensive for most people. And almost one-third of parents are stalling on buying a home because they simply can’t afford it.

Will younger, wealthier parents sign up?

While most parents in the U.S. are not able to afford luxury subscription boxes for their kids, younger (and wealthier) parents may be a more likely target market. Some 78% of millennial parents do online shopping on their smartphones, a report from the National Retail Federation found. And 49% remain loyal to a brand or designer label they love, despite cheaper options. That’s something subscription services may be keen to tap into since many e-commerce sites suggest new items based on a consumer’s purchasing history.

“It always comes down to the perceived value. If a parent feels like this service will help give them back some time or solve a recurring frustration, then it could make sense to outsource,” said Erin Lowery, finance expert and author of “Broke Millennial Takes On Investing.” But she cautioned that if parents can’t afford to splurge they shouldn’t be tempted by convenient luxuries for kids. “It wouldn’t make sense to use these services if it’s ultimately ending up to be a budget buster.”

What about healthy kids’ meal subscriptions?

Some parents are opting for all-natural foods even if it means paying premium prices, a Nielsen report explains. Nurture Life is one meal delivery service for kids that works with pediatric dietitians and chefs to create balanced pre-made meals sans refined sugars, preservatives and allergens. The brand has a number of meals for toddlers, kids and teens, like cauliflower mac-and-cheese, pork al pastor and teriyaki salmon. Plans range from $45 to $89 for eight or 14 meals a week for babies; and $47 to $119 for five or 10 meals a week for toddlers.

Hertica, who has also subscribed to meal kit services, says she’s found it cheaper and not much more of a hassle to buy and prepare her own meals. “It’s so much cheaper to buy your own food and do it yourself,” she says. Hertica has tried Blue Apron, which costs almost $60 per week for just two meals. “The meal subscription services are tasty, but $60 for meals that feed two people with no leftovers is not economical,” she said, adding that she’ll spend $20 at Trader Joe’s for items like milk, eggs, cheese, beans and fish, or protein that will yield around six servings of food.

Also see: Some wealthy parents even offer bribes to get their kids into the best summer camps

Would you buy a Fitbit for your kid?

Fitness tracker brands like Garmin and Fitbit FIT, +0.00% are also focusing their energy on getting kids more active. The Fitbit Ace ($78.00 on Amazon Prime AMZN, -0.17% is designed for kids ages eight and up. It tracks kid’s steps and sleep time, and rewards them for hitting goals with celebratory messages and badges. Parents can create an account for their kids under a family account where parental consent is required for kids 12 and under. Garmin’s Vívofit jr. ($79.99) has a similar product that also lets parents monitor their progress.

With the growing popularity of CrossFit, the high intensity, strength training fitness program has been tailored to kids and teens with basic movements like lunges, pushups, squats and a variety of other exercise drills at gyms around the country. Reebok ADDYY, +0.38%  even designed cross fit sneakers for kids that cost upwards of $45.

Not everyone is sold on subscription services for kids, especially for designer labels. When parents feel the need to buy their kids designer goods or luxuries it says more about them than it does about their little ones, Whitbourne said. “This behavior is absolutely a reflection of the egos of the parents,” she said. “It’s quite likely they were either raised in this tradition or have come to believe that the only way to show how successful they are is to flaunt their wealth with these superficial trappings.”

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