Global leaders are currently in Glasgow at the COP26 summit, aiming to accelerate action towards the goals of the Paris Agreement, to prevent a real and imminent climate crisis. The earth is now 1.1°C hotter than the pre-industrial level, and limiting further temperature increases to 1.5°C is required to avoid the most catastrophic climate changes. Achieving this requires halving global carbon emissions by 2030, and therefore significant change across key industries.
The fashion industry is one of those key industries that can make a difference, currently producing up to 8% of global emissions, driven by a phenomenon of fast fashion. Change needs to go beyond the scale of previous modest sustainability initiatives, requiring a shift away from the conventional take-make-waste model. Greenhouse emissions are predominantly generated by clothing production – with some estimates putting it at 90% of total fashion emissions – and therefore avoiding unnecessary overproduction will be crucial. Sharing models such as rental will be critical to this. McKinsey notes that at least 20% of items need to be traded in a circular way by 2030, while a recent British Fashion Industry report expects 12% of physical items in consumers’ wardrobes to be rented by the same timeframe.
“To align with the 1.5-degree pathway in 2030, 20 percent of garments need to be traded through circular business models, so greater scale is required.”
McKinsey, The State of Fashion 2021
Consumers are already conscious of the impact of their choices, increasingly ranking sustainability as one of their key purchasing priorities, and admitting to feeling guilty about purchasing items they intend to wear only once or twice. This has resulted in a massive increase in rental demand experienced by third-party platforms (e.g. Hirestreet), which have experienced triple-digit growth across 2021. However in order to make the required industry-wide impact, rental and sharing models need to be offered directly by fashion brands. Third-party rental platforms have proven that the rental model works; now fashion brands have to adopt it to save the planet.
Despite the clear demand for rental, a major barrier to fashion brands doing this is a lack of expertise on which stock is suitable for rental, with the following question frequently popping up:
Will rental work for my brand or is it just for luxury fashion?
Rental is often associated with luxury occasionwear, which is indeed where the concept began. It’s not difficult to see the logic of renting an expensive item that you only plan on wearing once to a special event – tails for a wedding, a ball gown for an awards night, or perhaps a formal dress for a day at the races.
Yet shifts in consumer behaviour mean that demand for rental is now prevalent across a breadth of apparel types. The increase in desire for constant newness, influenced heavily by social media and post-covid self-expression, means that consumers now consider a wider range of events as worthy of dressing up. Birthdays, dates, drinks, holidays and even going into the office are classed as social events, and present an opportunity to show off a new look and to feel good in a fresh outfit.
While occasionwear is often still the entry point for first-time fashion renters, after an initial positive experience, they turn to rental for a wider range of events, valuing the fact it allows them to access a higher-quality item for a fraction of the retail price. In fact, consumers will often substitute purchasing a fast-fashion item with renting a higher-quality item, resulting in a much more sustainable outcome through avoiding unnecessary overproduction.
The result is that rental is becoming a mainstream model for consumers, with appetite for renting items beyond high-end fashion or formal wear. That often leads on to the next key question:
What should I consider when selecting stock for my rental offer?
The first point to note is that the aim is not for rental to replace retail, but to complement it, with brands offering rental across the most relevant items in their stock base, and delivering a win-win-win scenario: maximising revenue for the brand, offering new and existing customers greater access to fashion products, and both parties contributing to the sustainability initiatives so greatly needed in the fashion industry. Selecting the right stock is therefore crucial. Get it wrong, and your offer is likely to struggle with generating enough demand to be credible. Get it right and you can help deliver a more sustainable fashion industry whilst also increasing profits through maximised garment utilisation.
At Zoa, we work closely with our clients to launch and constantly optimise their brand’s rental proposition. We identify the following factors as being key to whether an item is suitable for rental:
The growing relevance of rental to different types of stock and customer segments means that the majority of brands can now join the circular economy. And if they don’t, others will.
Get in touch to discuss which rental model is best for your brand at email@example.com