What is Fashion Renting and what are the benefits for companies?

The waste of natural resources and the absence of interventions to enhance the production waste typical of the linear economy represent damage to natural ecosystems but also a cost for fashion companies.

Indeed, it must be considered that while clothing production has doubled from 2000 to 2014 and the number of garments purchased per capita has increased by about  60%over the same time period, only 1% of clothing at the end of its life cycle is recycled into new garments, resulting in a sharp and continuous increase in waste disposed of in landfills or incinerated.

In this context, circular business models are key levers for mitigating the impacts of the textile sector, as they enable longer textile product lifetimes, limit the exploitation of virgin raw materials and reduce the number of textile waste disposed of in landfills.

Among the best known circular business models are:

• Resale;
• Rental;
• Repair and Remaking.

Fashion renting, in particular, consists in the rental of clothes or accessories usually of high quality and price.

Since this is a rental, the company providing the garment is responsible for maintaining, inspecting, and sanitizing the product when it is returned and retains possession of it. By shifting the focus from possession to use, the useful life of the product can be significantly extended, avoiding the environmental impacts associated with the creation of a new garment.

Not only is fashion renting a viable solution to facilitate the fashion industry's transition to a circular economy, but it also provides companies with economic benefits that are bound to increase in the future.

The origins and rise of Fashion Renting

The phenomenon of fashion renting originated in the United States of America and its diffusion was facilitated by the Rent the Runway platform.

However, recently, fashion renting has been developing significantly in the United Kingdom, where consumers have welcomed the possibility of renting clothing or accessories.

The possibility of renting an item of clothing allows consumers to be able to use and try on high fashion products without having to pay an excessively high price. This means that consumers appreciate fashion renting not only from an environmental point of view but also from an economic point of view.

Fashion Renting in Italy

The phenomenon of fashion renting is finally catching on in Italy as well.

This is favored by a particular sensitivity, widespread among Millennials and Generation Z, to make more sustainable consumption choices.

The circular economy, in fact, is a widespread practice among the new generations: for 80 percent of those born between 1995 and 2010, buying used clothes is a cleared action.

In addition, as already anticipated, fashion renting offers the opportunity to try on different pieces of high-fashion clothing otherwise inaccessible to young people.

Why Fashion Renting is convenient for fashion companies

Fashion renting could be a useful tool for fashion companies to strengthen their competitive advantage in the market.

The implementation of the clothing rental service, in fact, allows companies to stand out from their competitors and to more easily retain their customers.

According to Allied Market Research it is estimated that fashion renting will have a business of about 1.9 billion dollars by 2023.

Large companies are moving in this direction. For example, Rinascente now has a corner of Drexcode, a platform specialized in luxury clothing rental, on the second floor of "Annex" in Piazza Duomo in Milan.

Italian fashion companies that have adopted the renting business model

In our country there are both businesses based exclusively on fashion renting, but also cases of famous brands that have dedicated some capsule collections to the rental service.

We analyze some practical cases in the following paragraphs.

Italian business case studies based on Fashion Renting

In Italy there are several realities that have based their business on fashion renting:

• Revest; is a reality that allows you to rent high fashion clothes and accessories. Furthermore, you can rent clothes and accessories from iconic as well as emerging brands;
• DressYouCan; is a startup that offers a rental service for high fashion dresses, clothes made by emerging designers or vintage clothes. DressYouCan also allows you to rent accessories and shoes. The products can be rented for about 4 days;
• Drexcode: is a platform specialized in wedding dresses rental. In fact, it was born with the aim of allowing all women to try on clothes made by luxury or emerging designers.

Italian business case studies with a collection dedicated to Fashion Renting

Even in Italy there are businesses that have thought of creating an ad hoc collection dedicated to fashion renting.

Among the most important cases is certainly Twinset, which has created a totally Made in Italy collection called “Pleasedontbuy” exclusively dedicated to rental. Alessandro Varisco, CEO of Twinset, will speak as a guest at our Fashion Sustainability Academy explaining the origin of the idea of PLEASEDONTBUY and analyzing the critical success factors, the investments made and the economic benefits obtained.

As previously mentioned, La Rinascente, a well-known luxury clothing retailer, has created a partnership with Drexcode, dedicating a corner to clothing rental on the second floor of the store in Piazza Duomo in Milan.

The challenges to face to implement the rental service in the company

In order to ensure that rental actually reduces environmental impact compared to other business models, some factors such as the rate of use of the garments, transport and washing operations need to be considered. These factors represent the main challenge that companies must face to make the clothing rental service sustainable.

In this regard, an LCA study published by the Finnish journal "Environmental Research Letters", evaluated and compared the environmental impacts of circular economy practices implemented in the fashion sector, including rental services.

Several scenarios for the rental service were analyzed as part of the study. It is clear from the analysis that only the scenario in which the garment (in this case, jeans) is expected to be used 400 times versus 200 times for a garment used by a single person and the consumer's use of environmentally friendly means of transportation to get to the store (e.g., a bicycle), can achieve a Global Warming Potential value comparable to the "Reuse" strategy.

Furthermore, the implementation of circular business models, such as rental, presents several challenges that fashion companies have to face.

In particular, the creation of a new rental service requires the following investments:

• Creation of new operational spaces: adoption of ad-hoc physical and digital spaces such as warehouses for clothing and e-commerce;
• Dry cleaning and product sanitation services: for the implementation of rental systems it is necessary to invest in cleaning solutions which must be low impact and safe for the environment, in order to be consistent with the business model implemented.
• Reverse logistics network: for the implementation of circular business models, and in particular clothing rental service, products need to be kept in circulation and multiple exchanges between the consumer and the company need to be ensured. To this end, it is necessary to implement reverse logistics systems, i.e., a reorganization of supply chains in a way that encourages the reverse flow of products and materials with the aim of offering maintenance, repair, reuse, refurbishment, remanufacturing or recycling services. In addition, companies should invest in environmentally friendly transportation and recycled packaging materials, as well as in organizing local collection and sorting points;
• Communication and marketing: to encourage the phenomenon of fashion renting, companies need to make second-hand garments more desirable than new ones. This can be achieved, for example, through convenient and timely delivery of the rental item or personalized stylistic consultancy services. Furthermore, the guarantee of product authenticity is particularly relevant for luxury clothing rental services where it is necessary to capture the consumer's attention and induce him to prefer the rental rather than the purchase of a new product.

Conclusions

The phenomenon of fashion renting is expect to spread ever more rapidly in the fashion sector and represents a Win-Win solution for companies, consumers and the environment.

Companies in the fashion sector, through the implementation of rental services, could improve their competitiveness on the market, build customer loyalty and encourage the transition towards a more circular fashion. It should also be noted that circular business models are an effective tool for adapting to the EPR (Extended Producer Responsibility) regime according to which producers are responsible for the environmental impact of waste deriving from the end of life of what they have marketed.

However, companies have to face various challenges to correctly implement circular business models, identifying the appropriate investments to make to define an ad hoc sustainability and communication strategy.

Cikis supports companies in overcoming these obstacles and in implementing circular business models capable of improving the environmental and economic sustainability of the company.