Fast fashion has made it profitable to produce and sell low-quality clothing. How to move away from this vicious cycle of consumption? Clothing as a service model offers a solution.
Today’s capitalistic market economy is based on speed and low prices: the more you sell, the more you get. Money is the driving force within this system, as the most important goal for companies is to generate profit for shareholders. Both the fast fashion companies and luxury labels exist within this system. The fast fashion companies earn huge profits with high volumes and the more expensive labels with higher sales margins. The price of a piece of clothing doesn’t tell anything about the values of a company.
Clothing labels and stores get their profit when a piece of clothing is sold. The sales profit is received once and after that the garment doesn’t generate a dime for the company. In this model you don’t have to pay attention to quality or longevity, as the company is not responsible for the whole lifecycle of a garment. This has made it possible to produce clothing with low-quality materials and poor craftsmanship. The same goes for the sustainability of materials and production: Although we seemingly demand social responsibility from clothing companies, they still have the freedom to do pretty much what they want – and produce clothing as unethically and unecologically as they dare.
Clothing as a service makes high-quality clothing more profitable than fast fashion
We need a systemic change in order to ever have a truly sustainable fashion industry. This systemic change can be achieved by offering an alternative revenue model: the production of long-lasting, high-quality products has to become more profitable than fast fashion.
This change is possible with Clothing as a service model. A piece of clothing is turned into a service: We don’t pay for the product itself but for the use of a product. The same way that we don’t for example own DVD’s anymore but instead we stream our movies and TV series online whenever we want.
How does it work?
There can be several different rental models within the Clothing as a service system: A consumer can rent directly from another consumer for example through an online rental platform. A clothing store can offer a selection of their clothing range to be rented from their brick-and-mortar store. Also a clothing label can rent a collection directly to consumers of companies.
The renting process can happen through an app and the piece of clothing is delivered to your doorstep or collected from a swap-point. The service can be offered also at a physical location, for example at a department store or at a clothing library. To make the renting process efficient, easy and scalable, there should be a digital platform which enables tracking, safe money transaction and communication between the owner and renter but also between other service providers such as laundry service and logistics partner.
Almost any piece of clothing can be rented – some for shorter period of time, some for longer. For example it would make sense to rent an evening gown just for a few days as it is meant to be worn just once. On the other hand a sweater could be rented for a month, and a winter jacket for the whole season. Jeans could be rented for even longer period of time, for years.
Make a profit with your own wardrobe
On average we all own approximately 300 pieces of clothing. As we can use only a few pieces per day, most of our garments stay unused. Even if we would use one dress 50 times a year, still it hangs in a wardrobe for over 300 days a year.
By renting a piece of clothing to someone else, you can make a profit with your own wardrobe: when you’re not wearing it yourself, it generates income through renting. Already when you are thinking of buying a new piece of clothing, you can think of it as an investment: If I now invest in this high-quality, sustainable and a bit more expensive product, I can receive part of the money – or even all – through renting it to others.
The renter enjoys a huge variety
By renting you can get the same joy of having ”something new” as when buying but with a rented garment you don’t have to have the same concerns: Is this of good quality? Will I wear it for a long time? By renting you can test a product without commitment. Also, you don’t have to have more space to store the piece of clothing as you keep it only for as long as you want.
By renting you will have access to limitless selection of clothing without the burden of owning. You can use those kind of quality designer items which you otherwise perhaps couldn’t afford or wouldn’t dare to buy.
New business opportunity for clothing stores and labels
Retail is struggling. There’s more and more clothes produced faster and faster. The retail stores are not able sell them all so they have to offer them with discounts in order to be able to have room for new items. The sales margins get thinner and thinner which means that the stores have to sell more and more in order to get a big enough profit.
Retailers cannot achieve a competitive advantage by selling more with higher discounts. We have to find new ways for retailers to flourish. The clothing rental service offers new kind of a business model for retail stores and clothing labels. This new model does not compete with old-fashioned sales but on the contrary: selling and renting work well side by side.
By renting a retail store can get even better profit than by selling an item. This is the case especially with high-quality, more expensive designer items as you are able to keep the piece of clothing in circulation for a long period of time.
If you compare selling with renting, there is many benefits in renting: the retailer is able to have a much closer customer relationship and a returning customer. Through the rental platform the retailers have access to huge amounts of data: about customer behavior but also about product lifecycles. This way the retailers are able to offer customized services, enhance the circulation of clothing and learn more about their customers.
The operator makes a profitable business
The operator acts as the service provider for the digital rental platform in the clothing as a service system. This platform enables the efficient circulation of garments from the owner to the renter, safe money transaction, information sharing and communication among others.
It might not be wise for a single renter to develop this kind of a system as it needs a lot of know-how, money and resources. As the rental platform operator is able to focus on its core business – platform development and operation – it is possible for the operator to offer a functional and user friendly platform for others to run an efficient clothing rental business.
The operator gets a profit by taking a commission from each money transaction. The platform is easily scalable thus enabling a profitable business model. Another option is to build a open source platform which enables collaboration and transparency.
Laundry and repair services employ locally
The laundry and repair services play an important role in clothing rental business. This makes it possible to form new business activities for local businesses. The service providers are connected in the rental process through the digital rental platform which make it easy to utilize these services.
Renting promotes quality
The clothing as a service system makes the production of long-lasting garments profitable: the longer the piece of clothing stays in circulation the better the profit. This is the reason why it makes sense for the garment owner – consumer, retailer or label – to favor long-lasting, high-quality clothes.
When the low price of clothing is not the only thing that matters anymore, the clothing companies have a bigger and better possibility to invest in the quality and sustainability of materials and production.
Change your mindset
One of the biggest challenges in clothing rental becoming common is our current way of consumption. We are accustomed to owning our clothes and buying new ones almost for free. But bit by bit we’re seeing more and more signals of change: There’s a growing number of people who are sick of having excessive amounts of stuff in their homes and have started to question their consumption habits.
The clothing as a service model needs a new way of thinking and a new kind of a relationship to clothes but at the same time it gives a lot in return. Perhaps we’re soon ready to move to the post-ownership era of fashion.
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Examples of Clothing as a service businesses:
Clothing libraries:
Lena the fashion library (The Netherlands)
Kleiderei (Germany)
Vaatepuu (Finland)
Lånegarderoben (Sweden)
Online clothing rental services:
Rent the runway (US)
Le Tote (US)
Girl Meets Dress (US)
StyleLend (US)
Peer-to-peer clothing rental platforms:
Humm (US)
Clothing labels offering rental services:
Vigga (Denmark)
Mud Jeans (The Netherlands)
Filippa K (Sweden)
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The article was originally published in Finnish at www.vihreatvaatteet.com & Vihreät vaatteet guide book.
Photos: Kaisu Jouppi
// EDIT: List of rental services edited on 16th of March 2019
