Renting clothes has emerged as a potential solution to the vast environmental impact of the fashion industry, which is responsible for nearly ten per cent of global greenhouse gas emissions. Despite the promise of sustainability, the transition to rental business models has faced significant challenges. The most successful examples of clothing rental ventures, particularly those focusing on specific niches such as sportswear, illustrate the importance of close collaborations with suppliers and manufacturers. This approach was highlighted in a detailed study by researchers at Chalmers University of Technology in Sweden, which provided key insights into making clothing rental both viable and successful.

In Sweden, the environmental toll of clothing is mainly attributed to the production of new items, with over 90% of the climate impact coming from this stage. Addressing this, researchers from Chalmers, the University of Borås, and the research institute Rise explored alternative business models. They aimed to mitigate the industry’s environmental damage by extending the lifecycle of clothing through rental systems, which promote the reuse of garments and reduce the need for new production.

Frida Lind, a professor at Chalmers and the study’s lead researcher, notes the commonality of rarely used clothes in people’s wardrobes. She advocates for the rental model, which, by extending garment use, encourages more sustainable consumption patterns. The research team analyzed nine Swedish companies engaged in clothing rental, identifying three main business models: the membership model, similar to a library; the subscription model, where customers pay a monthly fee; and the individual rental model, often paired with related equipment like ski gear.

Achieving profitability has proven difficult for these ventures, primarily due to the complex logistics involved in the rental process. Each garment requires thorough inspection and maintenance before it can be rented again, adding to operational costs. Issues such as warehousing, logistics, and maintenance, including laundry expenses, pose significant financial challenges, particularly for subscription-based models that require substantial initial investment and venture capital.

However, companies that targeted specific markets, like outdoor clothing, tended to perform better. These firms not only met a direct consumer need but also capitalized on their proximity to relevant recreational areas, showing that focusing on specific niches where customer demand is apparent can lead to success. Collaborations with stakeholders, primarily manufacturers and suppliers who prioritize sustainability, provided additional advantages, allowing rental companies to quickly adapt to consumer preferences and garment performance feedback.

Although not the primary focus of this study, existing research supports the environmental benefits of such business models. Production dominates the climate impact of clothing, but extended use and reduced production can significantly lessen ecological damage. Lind highlights the importance of every initiative contributing to the sustainability transition, emphasizing that even if some companies do not survive long-term, their efforts are vital in changing consumer attitudes and enhancing industry knowledge.

In conclusion, the researchers recommend focusing on niche markets with precise customer needs and establishing robust partnerships with suppliers to refine products based on rental experiences. They also emphasize the importance of integrating logistics and transport considerations early in the planning stages to ensure the scalability of the business model. This study from Chalmers University sheds light on the challenges and opportunities within the fashion rental industry. It serves as a crucial resource for decision-makers aiming to foster more sustainable practices in fashion.

More information: Frida Lind et al, Exploring renting models for clothing items – resource interaction for value creation, Journal of Business and Industrial Marketing. DOI: 10.1108/JBIM-04-2024-0281

Journal information: Journal of Business and Industrial Marketing Provided by Chalmers University of Technology