How Sustainable Are Clothing Rentals? (Breakdown)
Rental companies, especially Nuuly, benefit from the rising demand for sustainability. But here's the twist—these companies are also deeply tied to fast fashion. And so we must ask how sustainable clothing rentals are, especially when the clothing rental market is expected to be worth over $3.5 billion by 2028. No wonder fast fashion giants are jumping on this trend, so let’s unpack the complexities of the rental model, its implications for our planet, and how sustainable rentals really are.
Breakdown of Fast Fashion
First, let’s talk about fast fashion. Brands are churning out new styles at lightning speed to keep up with the latest trends. But this comes at a huge cost—both to workers and the environment.
Fast fashion is responsible for significant pollution, waste, and exploitation in the supply chain. The constant demand for new clothes drives overproduction and overconsumption.
In response, we the consumers are increasingly turning to more sustainable options, demanding transparency, and looking for ways to reduce our environmental footprint. This has given rise to alternative models like secondhand shopping and, of course, clothing rentals.
Rental fashion has even infiltrated the luxury and designer markets - given us who are still interested in wearing designer pieces while keeping up with fast-moving fashion trends, and rentals allow them to do both without paying the full price.
Clothing Rental Service Models
But, how does the clothing rental model work? It’s pretty simple—so you pay a subscription fee, and in return, you get access to a rotating wardrobe. You can wear the clothes, return them, and get new ones without the guilt of buying something new. And as you may have already guessed, prices, return dates, and brands differ depending on the rental company.
But, for the most part, rental services are marketed as a sustainable solution. They give us a way to experiment with different styles without contributing to the waste generated by fast fashion. But is this really the answer to the issues in the industry?
Nuuly: Clothing Rental Service
But let’s take a closer look at the recent news of the rising success of a subscription clothing rental service called Nuuly, owned by Urban Outfitters Inc., which also owns Anthropologie and Free People. Nuuly charges $98/month to borrow six items, and you can pay $20 for each additional item, up to two items.
Nuuly sends you the six items in a soft-sided container, which includes a pre-paid return shipping label – so you don’t have to worry about packaging! You then return it before the month is up so you can pick out 6 new things. Or return and pause your account until you need some new stuff. But if you end up liking any of the items you can always buy at a discount.
Recently, it was reported that Nuuly saw more than 50% annual sales growth for the first quarter that ended April 30, following full-year increases of 172% in 2023 and 96% in 2022.
Nuuly also saw its average active subscribers grow to more than 224,000, up 45% from last year and a three-fold increase from 2022—with almost 40% of them still renting two years after signing up, according to Kim Gallagher, executive director of marketing at Nuuly.
Nuuly’s success can be attributed to its appeal to sustainability-conscious consumers, particularly to millennials and Gen-Z interested in discovering and getting their hands on trendy pieces at a lower price.
Steven Curtis, a researcher at Sweden’s Lund University termed this practice as share-washing, which is when an access-based model, like Nuuly, can make you consume more because it makes a good more accessible – but this only feeds into the problems in the fashion industry… even if these services seem to refresh our wardrobes without buying new clothes.
Clothing Rental Services and Fast Fashion
But here’s a fashion paradox I want to explore—while Nuuly promotes sustainability in the fashion industry, it allows its parent companies, like fast fashion brand Urban Outfitters to profit from our interest in sustainable fashion. So it makes me consider whether Nuuly is a solution or just a clever way to capitalize on our need to follow trends, save money, and/or desire to reduce clothing waste. We honestly have no way to tell where the profit from Nuuly is going nor if they have any goals to push the industry towards sustainability and holistically.
However, Nuuly is bringing local jobs back to the United States. In February 2024, it announced the opening of its new 600,000-square-foot fulfillment center in Raymore, Missouri. Urban Outfitters is also investing $60 million in two phases of work over the next five years to build a second Nuuly fulfillment and laundry facility in the Kansas City region. This is expected to create 750 jobs over the next five years and will provide the company with the capacity to triple its active subscriber base.
They are also working with zero-waste designers to create sustainable fashion collections which are then rented on Nuuly’s site. However, we can’t forget that Urban Outfitters Inc. has spent at least $100 million on Nuuly to make the brand an affordable, more laid-back option in rental that will bring in younger, less-affluent customers.
Clothing Rental Services: Past, Present, and Future
But let's be real. It feels pretentious to complain about people using clothing rental services, especially when demand for rental fashion surged during (and after) the pandemic. Many of us became more aware of our spending habits throughout the prolonged exposure to isolation, while inflation and economic turbulence forced us to be smarter with our finances.
Renting clothing has now continued to be a way to wear new styles and get a variety of outfits, as well as the ability to save money, especially when using rentals for special occasions. Yet it introduces something called the Jevons paradox/ Jevons effect, which is when the tech progress increases the efficiency of a resource to reduce the amount needed for any one use of it. However, if there is a big demand for the resource then the rate of consumption increases.
In fast fashion clothing rental services, more efficient rental models lead to increased circulation of clothing, which boosts the use of each piece. While this can reduce the environmental impact per item, it may also drive higher consumption due to the demand for more styles. For example, Nuuly, owned by Urban Outfitters, needs to ramp up production to meet the demand for new styles, hence their expansion in Missouri and Kansas City.
The overall demand in the system therefore increases despite having models that started as a way to help the planet and society. We end up with solutions that make things worse. This means that improving the efficiency of a system cannot be the sole answer to our sustainability considerations, even if it does create local jobs…. unionized, fashion jobs if we are lucky.
However, we should consider that clothing rentals can be the following:
Clothing rentals can be a step toward sustainability but are not a complete solution to fast fashion.
While demand for sustainable options has led to the rise of clothing rentals, there’s a fine line between genuine sustainability and greenwashing.
The appeal of rentals lies in finding new styles and avoiding unnecessary purchases, but it raises questions about whether renting or buying certain items is more impactful in the long term.
Rentals can help reduce waste by curbing impulse buys and encouraging people to value clothing more, especially with time constraints.
However, emotional attachment to clothing can make renting feel unnatural, as people often grow attached to items and may want to keep them, which could lead to overconsumption.
The idea that clothing is disposable and temporary may clash with the desire to own and cherish pieces that reflect personal identity and needs. Yet, teens aren’t wearing outfits more than once if it has appeared on social media and often discard or return their clothing.
Teens have been trained to see clothing as:
A low-commitment purchase
Trash to be tossed out as cheap waste
Plastic-based quality that is untailored to their body, basically blind to what good quality clothing looks and feels like and
And finally, a commodity known as fast fashion, if they are aware of the issues in the industry.
Honestly, companies like Urban Outfitters benefit from this apathy, wastefulness, and short-term outlook on what things mean to us.
Fast fashion wants us to consume what they think is trendy and desirable, and knows younger generations aren't used to holding on to things because they want to keep up with trends and what is popular at all times.
Clothing rentals are set to grow even more in the coming years. More brands are likely to enter this space, offering consumers an ever-increasing array of options. And as consumers, we must remain informed and critical. We need to ensure that the services we support align with our values and genuinely contribute to a more sustainable future.
We don’t deserve for more brands to sell us more things and to expose us to more unnecessary clothing items, especially when there are reports rental companies target teenagers who can't afford to wear the latest brands at full price but can avoid FOMO now through the use of rentals.
What we need is more social equity and human rights in the creation, consumption, and disposal of clothing. We cannot blankly believe the claims that clothing rental services make, especially given the lack of studies or reports proving their claims of sustainability. This is especially relevant when analysts project that Nuuly will add $1 billion in value to URBN over the next three to five years.