Actually, I'd venture to say that the distinction between the two is shrinking, and will continue to do so in the future.
Now computers are so ubiquitous and powerful that people pay for "virtual" things all the time. They pay to download that song off of iTunes. They pay to download that iPhone app. Hell, they pay for "land" in Second Life and "money" in Farmville.
I'm curious how the same individual might value a subscription to "trendy $100 jeans...as a service", both in utility and price? I think it's been tried with luxury handbags for about $50/month, but I'm too lazy to look up what happened to that business (and my battery is at 3% so I can't look right now).
$20'ish - el cheapo house brands at Target, Walmart, etc.
<$50'ish - Gap, Levi Strauss
<$100'ish - Lucky
<$200'ish - Diesel, Seven for All Mankind
~$500 - Prada, etc.
If you think about what Avelle provides (LHaaS), it's a way for women to accessorize themselves for a big night out in a way far outside of their typical budget. That super-trendy, $1000 Fendi bag won't lend itself well to everyday usage for most people. Those $200 jeans, on the other hand, cannot and will not be worn for that Big Event.
Imagine you're going to a cocktail party with a bunch of big-time politicos. If you're a woman, you might rent that Fendi bag from Avelle. No one in their right mind would say to themselves, 'hey, I'll go rent some trendy jeans for tonight's black tie event.'
A serious online competitor to those god-awful tux rental shops could be cool, though.
Seems to have been re-branded as Avelle.