How Sustainability Is Changing the Way Consumers Get Dressed

RIP, department stores and fast fashion

Green services like clothing rental are taking market share away from fast fashion. Rent the Runway
Headshot of Lisa Lacy

This story is part of a weeklong series on climate change and sustainability. It’s in partnership with Covering Climate Now, a global journalism initiative to cover climate change in the week leading up to the U.N. summit on climate change in New York on Sept. 23. Click here to learn more about the initiative and read all of Adweek’s coverage on how sustainability and marketing intersect.

There was a time when sharing clothes was limited to siblings, best friends and roommates. Now, however, thanks to services like Rent the Runway and the RealReal, the art of renting, subscribing to and consigning clothes owned or worn by other consumers has a much wider audience.

And while the genesis of these services may have been to bring the sharing economy to high-end fashion, the market is growing thanks in part to an unforeseen benefit at the start: sustainability.

“Ten years ago, I had a vision the sharing economy could apply to the closet,” said Jennifer Hyman, co-founder and CEO of Rent the Runway, at the Code Commerce event in New York last week. “I feel incredible validation now that mainstream retail and brands believe rental is a key part of the revenue mix.”

Indeed, according to a recent Gartner report on specialty retail in the U.S., the sustainable fashion trend is gaining momentum with even fast-fashion retailers like H&M and Zara launching sustainable lines with products made from recycled materials.

And, according to Hyman’s figures, 10% of the $2 trillion fashion market will be rental 10 years from now.

“I believe there are many different players that can win,” Hyman added. “Our strategy is: One, to make sure the actual merchandise on our platform is from designer brands … as well as [to focus on] how easy and frictionless the experience is.”

While Rent the Runway started out as a means to rent dresses for special occasions, it has since added a subscription service Hyman described as “a new form of dynamic ownership” with its most loyal customers using it as many as 120 days a year. She believes this will be the avenue to bring Rent the Runway’s “closet in the cloud” to more customers as over 70% of revenue comes from subscriptions and that figure is “growing astronomically year-over-year.”

“Your closet is a reflection of who you once were,” Hyman added. “Rent the Runway allows your life, taste and mood to change … you’re not trapped by what you purchased in the past.”

But clothing rental and consignment also keeps fashion in circulation longer, which is better for the environment. That may not have been part of the messaging to consumers a decade ago, but it certainly is now.

During the event, Scott Galloway, professor of marketing at NYU’s Stern School of Business, called models like this “the most disruptive force in retail”—and he said sustainability will increase its appeal to a wider audience.

Another conference speaker, Julie Wainwright, founder and CEO of The RealReal, agreed—millennials and Gen Z account for 35% of the RealReal’s customer base, which is its largest single cohort—and the “[sustainability] drumbeat is really loud in that group.”

Hyman, too, noted sustainability is one pathway to appeal to first-time renters.

On a dedicated page on its website, the RealReal says fashion contributes more to the world’s carbon footprint than the aviation industry as the equivalent of a single garbage truck full of textiles is put into a landfill or burned every second—and 95% of trashed clothing could be re-worn, recycled or re-used.

“Every time you rent, you’re saving all the water, electricity and emissions used to manufacture a new piece of clothing,” says Rent The Runway on its sustainability page. “Our fashion team invests in high-quality designer pieces that last seasons unlike fast fashion that falls apart and ends up in landfills.”

Rent the Runway also ships clothes in eco-friendly garbage bags instead of boxes and uses an eco-friendly solvent when dry cleaning clothes upon return.

This marks a radical shift in the fashion industry, which is perhaps why eyebrows were raised when another designer rental clothing business, Le Tote—which has long pitched itself as a greener alternative to traditional fashion retail, dropped $100 million to buy struggling department store Lord & Taylor last month.

“Department stores are dead, they just don’t know it yet,” Galloway said at the event. “No one under the age of 40 with any options will take an escalator to shop.”

Both Wainwright and Hyman said they have no interest in acquiring a traditional department store for their businesses because of challenges like debt and bad customer experiences.

“What I took away is just that decay of the traditional way that the apparel industry has run—it’s gone forever now,” Hyman said. “We’re in a new world where models like Rent the Runway, the RealReal and Stitch Fix are the dominant players in how people get dressed.”

@lisalacy Lisa Lacy is a senior writer at Adweek, where she focuses on retail and the growing reach of Amazon.