There’s no doubting that the mutual consumer base has a growing interest in buying ethically. While industry professionals look for alternative methods to introduce sustainability into the world of fashion. Where rental has typically been an avenue of success, the complexities of its typical business model now mean companies face closure. During its most important time, can fashion keep the act of rental alive?
Established companies such as Rental to Runway, Seasons and The Rotation have reported closures and continued struggles to reach sustainable profit. Needing to raise substantial capital for funding, the pile up of costs—from logistics to dry cleaning—has got the best of many. Key players are now of the mindset that a rental operation won’t work on its own, proving to be a uniquely difficult business in the sea of new ideas.
Unlike a typical store, the logistics are much more intricate, ferrying clothes to and from cleaning, consumer, and storage. There’s a lot of risk to take for a fledgling start-up, while also unlikely to enable desired levels of business growth. In the midst of growing problems that conceal themselves from the easy-to-use consumer end, businesses have tried to tackle them with different strategies. Some companies have chosen to keep services that require extra finances in house, while others have drafted in third parties. Regardless of which business model brands have chosen, costs of shipping and warehousing have undeniably risen during the pandemic.
Many agree that rental businesses have a lot more parts to them than traditional retail. There’s more to the customer journey than simply supplying them with the product—there are many more questions, swapping and waitlists. There’s also a greater inventory risk, which could be reduced with offering more streamlined selections. Another alternative way of saving rental could be a peer-to-peer business model, which is arguably more democratic. Brands could lean more heavily on the mechanics of social media, with the ability to take a commission at different points of the journey. Keeping things light and scalable seems the most likely way for rental to still be a viable business option, utilising flexibility and offers such as consignment partnerships.
Photo source: https://graziadaily.co.uk/fashion/how-to/sustainability-clothes-rental-services/