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Sneakerheads who miss out on releases usually have two choices - shell out the money to pay resale prices that are often hundreds of dollars over the initial retail price, or suck it up and move on to the next sneaker drop. Offering a third option was KYX World, a company that provided a subscription-based sneaker rental service, allowing customers to rent up to three sneakers a month. After popping up at the end of 2020 and going full throttle with a marketing campaign that utilized many major influencers in the sneaker world, the brand's website is now password protected with a message reading they have “decided to end [their] subscription rental service.” This comes after KYX World raised an additional $3 million in a second seed funding last year as reported by the WSJ, which valued the company at $16 million.
Priced at three different tiers, consumers could purchase the “Gold,” “Platinum,” or “Diamond” membership from KYX World with each tier offering 1, 2, or 3 sneakers at a time with “unlimited swaps.” Pricing was set at around $80 for the lowest tier, $170 a month for mid-tier, and $350 for the highest tier. As users went up in tiers, they were offered more styles, bigger discounts if they were to purchase a pair they rented from KYX World, and were even offered money back towards KYX Tokens that could be used to help fund a purchase from the brand.
Thinking “how was this sustainable?” isn’t a far-fetched question. The business model employed required KYX to shell out thousands of dollars on inventory and required deep cleaning of the used sneakers after customers returned the products. With each wear, the sneakers would depreciate in value, meaning that without a high number of customers actively subscribing or purchasing pairs consistently to help replace inventory, the company was losing money on its investment. The fact that customers could also keep the sneakers they were renting for as long as they paid the monthly subscription price meant that certain sneakers weren’t available to rent for others, possibly leading to others canceling their subscription if an in-demand product was not available to them when they wanted it.
As of now, those currently subscribed to the service will have to return any and all sneakers to KYX World once their billing cycle ends. The failure of the largest and most prominent sneaker rental service showcases that not all business models can be replicated and applied to just any industry. While KYX World’s sneaker rental service may be over, they still have been active on Instagram. It remains to be seen if the organization pivots to another area. For up-to-date information regarding the latest happenings in the sneaker world, keep it locked to our Twitter and the Sole Retriever mobile app.
Images via KYX World
