Going Green with Style - Is Renting the Future of Fashion?
Fashion is a hot-button issue when it comes to environmental sustainability. This year, the World Economic Forum estimated that the industry accounts for 5% of the world's greenhouse gas emissions. Renting fashion has seen an increase in popularity in recent years, as we all aim to make our fashion taste as environmentally friendly as possible. The sustainable fashion trend aims to build environmentally and ethically friendly processes, supply networks, and products. According to one GlobalData analysis quoted by Bloomberg, the U.S. garment leasing market is predicted to expand to $4.4 billion by 2028.
Understanding the phenomenon of Fashion Rentals
This paradigm in renting fashion is a part of the broader phenomenon of the sharing economy, where the ownership of items is not exclusive to a single individual, but they are instead shared and rented. This approach has swept through other industries: Airbnb has transformed the way we plan our vacations, car sharing is a multibillion-dollar industry led by BMW and its DriveNow programme, and Netflix and Spotify have forever altered how we enjoy films, television, and music.
Innovative Business Model
Businesses can gain a competitive edge by innovating their business models to be more environmentally and socially friendly. Hence, it's a win-win situation for firms that can get their hands on fashion rental. Take the example of Rent the Runway, a designer rental platform founded in 2009 by entrepreneurs Jennifer Hyman and Jennifer Fliss, presently boasts over 9 million users in the United States alone. In 2016, it became the first company to make more than $100 million in revenue.
Rent The Runway | Ajay Suresh
Overall, the model is appealing from an eCommerce standpoint. Subscription models are attractive to businesses and merchants because of their steady, recurring payments and the elimination of competition. Even though one might not be able to afford to buy a product at retail, they can still enjoy it through a subscription service. For the first time, consumers have the freedom to try out new styles and brands they may have never heard of before, thanks to the leasing model's no-hassle approach.
A Financially Viable Option
Furthermore, smaller labels may be more cost-effective to allow customers to sample their products at a lower cost than the retail price. It might be quite expensive to create awareness and gain a lot of publicity on the appropriate marketing channels. Nonetheless, rental platforms can be a more reasonable option for generating recurring revenue because people who have tried something and developed an attachment for it are much less expensive to recruit as consumers than people who are unfamiliar with the brand.
Attracting a Novel Customer Base
Millennials, who now make up 30% of the population, are less willing to spend a lot of money on high-end brands' products, but fashion-rental platforms can help them convert them into paying customers. But it's not just about saving money here. Additionally, millennials care deeply about environmental and ethical issues, and one upside of clothing swapping is that it reduces the amount of clothing thrown away.
Sustainability – A Key Consideration for Customers
For many customers, the long-term viability of rental fashion programmes is an important factor. Changing trends, low-quality products, and huge promotional discounts make apparel quickly disposable. As reasonable as renting rather than purchasing may appear, the issue arises as to whether or not fashion rental systems are genuinely sustainable. One study published in May 2021 by the Finnish journal Environmental Research Letters examined the environmental impact of renting, reselling, recycling, and other garment ownership and disposal options. Renting garments was determined to have the most significant environmental impact of all, as delivery and packaging costs were shown to be the hidden environmental cost. There is a lot of transportation involved with renting, as the clothes have to be returned to the warehouse and returned to the renter.
On the other hand, the Rent the Runway enterprise has just released new data suggesting that renting rather than purchasing new can result in significant environmental savings. To carry out this research, the U.S. company enlisted the help of third-party consultants Green Story and SgT. The business estimates that its rental model has prevented the production of 1.3 million new garments since 2010, resulting in savings of 67 million gallons of water, 98.6 million kWh of electricity, and 44.2 million pounds of CO2 emissions over the past 10 years.
Well, is Fashion Rental the Way Forward?
Considering all these factors, there is no doubt that fashion rental represents a key opportunity for the stakeholders involved in the fashion industry. Although additional clarity and data are needed to fully comprehend the real sustainable vantage point, this innovative model is still promising in structure, public, and future possibilities.
