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https://www.klarna.com/uk/smoooth/

Johnnie Norton
- Commercial Manager

NOTES:
- Largest provider of Pay later services in the world and much more.
-Klarna is the highest valued non-listed FinTech in Europe
-28M app downloads, 90M global shoppers, 2M transactions per day, 200k+ retailers, 78k+ physical stores
-Klarna is the brand for a new generation of online shoppers
-Amount of stock, price drops and new releases can be managed through the Klarna app
-Klarna also fills in payment and customer details automatically, if the merchant allows this option (e.g. Amazon)
-giving customers a better way to shop as opposed to using credit cards with high interest rates

Q&A:
How has COVID impacted Klarna and if there is any transformation in your business?

So in terms of the physical retail Klarna has really slowed down as you can imagine but having Klarna installed for a lot of these retailers is a safer payment method because the customer can checkout on their phone. They don't have to get their card out to touch any anything in the store and they could do it from a distance as well. That's something that's fairly been a nice accidental advantage. When we look back at the first lockdown back in March last year, we were seeing a lot of growth within homeware, home improvements, and fitness and lifestyle. The growth was just incredible. Fashion at the time was slowed down. And now what's been interesting is we've seen a growth in 42 to 55 year old consumers using Klarna for the first time. As the only option is choosing to pay and shop online now so the loyalty is still very much there with those 40 to 55 year old consumers. They’re open to the idea of shopping with Klarna and what we're seeing is a levelling out. It's not just some 18 to 30 year olds paying with Klarna and now we tend to find that typically older age groups, with more disposable income are actually catching up pretty quickly. It's been a really interesting 14 months in terms of seeing that revolve. But what we want to try and do as well once the high street reopens is to boost that confidence so Klarna can also be seen as a champion of the high street. We want to try and create High Street communities to get people out shopping again. Ultimately it's great people are shopping online more but we want these retailers to survive and retail is at the heart of Klarna for some businesses. It’s been very interesting. I would say on the long run it's been beneficial to a lot of our merchants as well.

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Raw Materials Fraud is Rampant

Our data confirms that 15-25% of raw materials transactions are fraudulent: they fail to meet legal and company-specific standards for due diligence. That can mean non-compliance with import regulations, fraudulent certifications, counterfeiting, smuggling, and more.

Traceability Offers Continuous Due Diligence

By monitoring every shipment and delivery of raw materials for anomalies, traceability provides continuous due diligence that far outperforms sample-based audits. It's real-time assurance that your supply chain is as it should be.

Before Blockchain, a Trusted Authority

Before you write any traceability to the blockchain (or the cloud) be sure that it's being validated by a trusted authority. That's where Sourcemap comes in: deploying the first data science aimed at rooting out raw materials fraud by analyzing every transactions, every day.

Audits and Certifications you Substantiate

Sourcemap's traceability audit trail is second-to-none: every transaction, every audit, with meta-data captured and cross-referencing with the best-available trade and production statistics. With traceability, you can verify the verifiers.

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Digitalization of the Supply Chain

Brands today need to deliver to their customers at every level

-       Fresh products

-       Fast delivery

-       Sustainability and transparency

-       High quality, affordable price

Managing production is HARD

Key production and supply chain challenges

-       Too much time spent managing orders

-       Lack of control and visibility across orders

-       Fragmented comms and information sharing

-       Inconsistent product quality

-       Need for faster lead-times

Supplycompass was started to empower brands and manufacturers to produce better together

Whats the benefit?

-       Faster design-to-delivery

-       Effoicient process to free up team time

-       Improved quality, fewer mistakes

-       Better collab and communication

-       More control and order visibility

-       Access to the best supply chains

Feature overview

-       Inspiration and mood boards

-       Product and card libraries

-       Costings and purchase orders

-       Style creation and management

-       Sampling and approvals

-       chat

Did Brexit affect your business?

If a business is working with our supply chain their goods get delivered to our warehouse. The logistics partner handles more on the side of things with transporting. Supplycompass handles warehousing. Fortunately Brexit is not a hurdle we had to handle with

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Avery Dennison is a global science company and manufacturer so we have over 30,000 employees worldwide and we make labels for a number of industries. These industries cover Pharmaceuticals, automotive, food and drink, and apparel and footwear. Apparel and footwear is the division that I'm in. Just to put that into context for fashion, we make swim tags, woven labels, care labels, sticky labels, embellishments, and packaging. We're also moving into the digital space, so just touching on that video. We're also looking at how we can enable clothing products to be part of the Internet of things. We network by connecting products to the data cloud and the brands that we work with are large scale and global across every market from contemporary to luxury to performance and across all product categories so like Nike, Adidas, H&M, Uniqlo, Ralph Lauren. It's the major players and our production facilities are set up to operate at scale. We’re also looking in team sports so we just had a contract renewed with the Premier League to produce all of the names and numbers for the players kits. We supply the crests and the labels and the names and numbers and they come in like a plastic carrier. There’s heat applied to the garments either in the factory or in store if it's for customization. So yeah that’s what we've got kind of got our fingers in lots of pies and across the entire industry. I just wanted to kind of set the scene with opposition in the market before we go into the questions.

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What were the challenges that you had to face when you first joined the Avery Dennison team?

Yes so I remember how easy my role was compared to now when I joined. I remember being really impressed that there is someone in place to do everything and that it was my soul, like my role was to research and create trends reports for our customers so it was such a lovely position to be in. I remember being advised by my manager at the time to be a sponge for what is happening in the business and that really stuck with me and I think it's one of the best pieces of advice that I have received. It is so impactful because Avery is such a huge company and there are so many capabilities that being a sponge in those early days really enabled me to network and grow. My value has really built up overtime because it makes you indispensable to have that specialised knowledge in a business particularly in Avery, the products and the solutions and the production methods, they're quite technical and that they’re complex. So to have an authority over trends content without understanding the bigger picture and service that you are providing is a challenge. So I’d say that was the biggest thing really and I had to learn very quickly about the product itself.

Sustainability has become each day more popular and we can all agree that leaning towards a more sustainable world is obviously a good way to preserve our planet so do you think that consumers are starting to be more involved with the concept of sustainability an if yes how do you think this is?

I'm kind of saying that from a global corporate perspective and that the movement is real and it's it's big and it's long term and brands are really changing not just for their own integrity but because it's so important for business. If they don't change then they won't exist in the future and I think there are two big themes threatening businesses if they don't keep up and they are sustainability and technology. So we've seen Forever 21 and Arcadia have fallen short, JCPenney JCrew, True Religion. And there's tonnes of brands who haven't been able to weather the storm of COVID and that's because they haven't had the infrastructure to operate through the crisis and all about how they’re just not relevant enough to win market share and that's a huge issue with people spending less and and changing their habits. I think you can see it on social media and the movement from consumers something that came to mind. When I was thinking about this question, there is a website called didtheyhelp.com where brands were being called out for being heroes or zeros, for whether or not they contributed in in the pandemic. This is a massive human issue as well as an environmental crisis so brands who are cancelling orders with their factories without collaborating and caring for the people in their supply chain were really being shot down and consumers are much more switched on to the behaviour that businesses have and they're not afraid to publicly shame them if it if it's negative. So that means lost loyalty, lost confidence and lost sales. So it is really a business imperative to operate with integrity. There are lots of white papers on this topic and I encourage everybody to regularly check out McKinsey and Co, the Business of Fashion, Accenture the Ellen MacArthur Foundation as they often release reports that back up these messages:

71 percent of consumers are indicating a shift into high quality garments and a deepened interest towards circular models such as resale, rental or refurbishment following covid. So we’re really seeing brands on a global scale that are working with these new expectations from consumers.

Can you explain more about digital and RFID tagging?

Yeah it's such a huge traffic and it's really exciting I know. I think it's largely being driven by the end goal of being able to take out the label altogether and because at the moment you have to have all of that information printed on a label which just gets cut out and it's frustrating for everybody but there is a particular body called the AFA (Apparel and Footwear Association) and we’re lobbying alongside them to change the legislation so that you can have that information available via a digital trigger rather than having to be printed on a physical material. But that I think is still a way off but what we're doing with brands is just consulting with them on baby steps to have a digital trigger at all on their labelling and just playing about with what that experience can be. And so like the example that you saw in the video that was to show what the possibilities are with sharing your journey with the consumer. And ideally if you have full transparency in your supply chain which eventually everyone will too have a digital touchpoint to share that whether it's through blockchain or just through storytelling. There's lots of accessible ways that brands can share but with consumers today, it can be with a video, it can be to that sustainable messaging on their webpage, it can be much more dynamic than that if you want it to be. So you can actually change the experience. We did a project with the art collective in Hong Kong where it's a full scan experience. So each time you scan the label, it’s different messaging. So that's quite an interesting way to play with it. And it can be geolocated so you can send different messaging to different people around the world and obviously the data that you can go on from that as well is really valuable so yeah. And RFID as well, being another digital trigger traditionally well it is more on the supply chain side but being able to have full visibility of your inventory is massive and enables brands to really cut down their waste because they're not over ordering they know exactly where their stock is and that's really coming to the fore in covid because brands had to suddenly figure out how to fulfil orders from anywhere. Fulfil orders from store and order to be able to move their business to completely online and the ones the brands you had are with the ones who were able to pivot much more easily yeah that would prove places.

How much percentage do you think in terms of brands are actually greenwashing and trying to be transparent or sustainable just because they've been compelled to do that? And how much do you think people are genuinely trying to make a difference?

It frustrates me but the more that I watch the like senior members of big brands speaking about this topic, industry events and webinars even if they've put out some dubious messaging in the past I'm starting to believe that it is there really taking it more seriously now so I'd say that yeah some brands might be doing both. You know being a bit brazen with their messaging with things that are out there today but it doesn't mean they're not taking it seriously for the future. I know that doesn't really answer the question but because it is not very clear right because even though brands do want to go transparent, it is only to a certain extent. Just to add as well I think they're being held accountable by Fashion Revolution who does the transparency index. So I mean they are being called out for it as well but it's not difficult to find out what they're actually doing. And you know compared to what they're saying that doing so and they know that they know that they're under the spotlight and they have to improve.

What do you think is going to be the next trend of 2022 related to sustainability?

I think it's going to be about rental and resale. It is going to be massive and along with that the digital experience that comes with it. So I think a few of the topics that we've already touched on like that traceability and authenticity.  And also reusing waste I think dead stock has been a topic for a while but it's still a big challenge for the industry and I know a lot of a lot brands have faced issues with inventory from covid and they've got to answer for that waste if it's not sold on to consumers so in there a lot of people are looking into how they can repurpose that waste and regain the value.

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Gen Z is also considered as the most politically active age group and will account for more than 40% of global consumers in 2020 (Business of Fashion, 2021). With this, brands must gain the trust of the Gen Z consumers by providing more transparency and being more ethical with workers. In a survey by McKinsey and Company (2020), it is stated that 66% of consumers said that they would stop or significantly reduce shopping at a brand if they found it was not treating its employees or suppliers’ employees fairly.

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All brands will have to adjust and integrate transparency sooner or later into their supply chains in order to gain consumers' trust. Consumers are demanding more from brands especially when it comes to their socio-political values. In a research by Kantar Monitor, it was discovered that 54% of consumers believe brands have an important role to play in social conversations including race, gender and equality (Business of Fashion, 2021). When brands fall short to recognize the importance of these issues, consumers are quick to call them out.

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Supply chains will also be integrated with the Internet of Things (IoT) and digital things. These technologies will digitally interconnect the supply chain ecosystem and improve network collaboration, visibility and risk management (Gartner, 2021). These technologies will also enable faster responses and changes in the supply chain.

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According to a research by Gartner (2021), 41% of supply chain leaders today are integrating digitalized supply chain functions but are not yet fully digital. However, research shows that by 2025, 34% of supply chain leaders expect to speed up by integrating a fully digital supply chain. In the next ten years, it is expected that this number will grow even more, and supply chain digitalization will be common for brands.

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According to a market report on Grandview Research (2020), the global blockchain technology market size was valued at USD 3.67 bn in 2020 and is expected to grow at a CAGR of 82.4% from 2021 to 2028.

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In a research conducted by Venture Scanner in 2018, venture capital funding for blockchain technology increased nearly 400% in 2017 and 2018

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Investment in blockchain startups are increasing at a CAGR of 90% over the past five years. (Vogue Business, 2019)

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Blockchain in fashion is a relatively new concept, however it is showing signs of traction.

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FUTURE OF BLOCKCHAIN AND OTHER SUPPLY CHAIN TECHNOLOGIES IN FASHION

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FUTURE OF BLOCKCHAIN AND OTHER SUPPLY CHAIN TECHNOLOGIES IN FASHION

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Big brands such as Nike, H&M, Levi’s and Gap are also making efforts to increase transparency.

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Apparel company, Patagonia, has also innovated their transparency through their ‘Footprint Chronicles’ map which is a subset of raw materials, mills, and factories that make their products and drills down into details about vendors’ operations and staff (Harvard Business Review, 2019).

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M&S was one of the first mass-market companies to take control of their supply chain through putting a factory map on their website.

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The first garment tracked using blockchain was in 2018 by Martine Jarlgaard, a Danish designer. Jarlgaard partnered with Provenance, a company that works on developing supply chain transparency through the use of blockchain. Each step of a garment was tracked and registered via blockchain through the Provenance app. Since then, more and more fashion companies have been taking action to integrate blockchain into their supply chain. (Fashion United, 2021)

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DEVELOPMENT OF BLOCKCHAIN FOR SUPPLY CHAINS IN FASHION

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DEVELOPMENT OF BLOCKCHAIN FOR SUPPLY CHAINS IN FASHION

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Researchers at the MIT Sloan School of Management found that consumers are willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency (Harvard Business Review, 2019).

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Due to increasing globalisation and offshore manufacturing, companies are becoming less aware of where their products are coming from and how they are produced

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Since the collapse of the Rana Plaza factory, Fashion Revolution has been releasing a Fashion Transparency Index to rank brands according to their level of transparency. These incidents had also shifted the way consumers view transparency, demanding brands to take action.

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Rana Plaza Factory in Bangladesh
The Rana Plaza factory collapsed in 2013, which shed light on the unethical working conditions of garment workers in Bangladesh

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TREND 3: SUPPLY CHAIN TRANSPARENCY AND BLOCKCHAIN

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An example of brands taking up rental would be the sustainable womenswear brand, Mother of Pearl. Mother of Pearl partnered with subscription-based rental platform Onloan. Onloan partners with a number of designers, however, Mother of Pearl is the first brand to integrate the rental option onto their website.

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There is also an opportunity for brands to expand their offerings to rental in the future.

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MY WARDROBE HQ x BELSTAFF at London Fashion Week

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My Wardrobe HQ, a fashion rental platform, offers womenswear, and has recently expanded their offering to childrenswear and menswear.

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Little Loop, launched in April 2020 as a subscription-based kidswear rental site.

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The report mentions that COVID-19 had a significant impact on the market as lockdowns imposed affected gatherings and social events where rental clothing is usually used for. However, the market is expected to recover and have stable growth as economic stability is improving, social events are returning, and there is increasing awareness about rental fashion (Technavio, 2021).

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According to an industry report by Technavio (2021), the global online clothing rental market is expected to grow by USD 990 million, at a CAGR of almost 10% during 2021-2025.

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An example of a brand engaging in circular fashion is The Vampire’s Wife. According to Harper’s Bazaar (2021), The Vampire’s Wife collaborated with the rental platform HURR, as an effort to support sustainability by contributing to the circular economy.

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Circular fashion was introduced as an answer to replace fashion’s linear model, which caused the industry to be one of the most polluting (Harper’s Bazaar, 2021). According to Fanny Moizant, the co-founder of Vestiaire Collective, businesses must focus on extending the lifespan of clothing in circulation.

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As mentioned in The State of Fashion 2019, 114 billion items of clothing were sold globally in 2019 (McKinsey & Company, 2019). This shows how the growth of fashion is immense. Buying less and rewearing more helps slow fast fashion and leads to reducing overproduction and other environmental and ethical issues. There are multiple ways to engage in circular fashion which include shopping second-hand and vintage, rental, resale, and purchasing from circular fashion brands.

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According to Green Strategy (n.d.), Brismar introduced the concept of circular fashion while planning for a sustainable fashion event in Stockholm. The event was later named after the coined term and introduced the concept and principles of circular fashion to brands and panelists such as Filippa K and Nudie Jeans. The ‘Circular Fashion Show and Talk 2014’ was the beginning to spreading the concept of circular fashion within the fashion industry in Sweden, and globally (Green Strategy, n.d.).

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The term ‘Circular Fashion’ was first coined by Dr. Anna Brismar, the owner of the consultancy firm, Green Strategy (Elle, 2020).

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‘Clothes, shoes or accessories that are designed, sourced, produced and provided with the intention to be used and circulated responsibly and effectively in society for as long as possible in their most valuable form, and hereafter return safely to the biosphere when no longer of human use’.

Dr. Anna Brismar

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The life span of fashion products is being stretched as preowned, refurbished, repaired, and rental business models continue to evolve. Across many categories consumers have demonstrated an appetite to shift away from traditional ownership to newer ways in which to access products.

In fashion, the shift to new ownership models is driven by growing consumer desire for variety, sustainability, and affordability, and sources suggest that the resale market, for instance, could be bigger than fast fashion within ten years. In recognition of this consumer shift, start-ups will not be the only players making their mark in these segments-established fashion brands will also accelerate the pace with which they embrace new ownership models to further their relevance to consumers.

In more and more categories, consumers are choosing to rent rather than own goods outright. Think of Spotify supplanting compact-disc sales and downloads, Netflix replacing video stores, and Zipcar standing in for car ownership among many young urbanites. This is a fundamental evolution in consumer behavior, and we expect it will have an impact in the fashion business in the years ahead-as we outline in our latest State of Fashion report, written in partnership with the Business of Fashion (BoF).

This trend is partly driven by the young generation's hunger for newness, while embracing sustainability. Research shows that average consumers today buy 60 percent more items of clothing than they did 15 years ago. But consumers keep that clothing for only half as long as they used to. For example, a survey done in Britain found that one in three young women consider clothes "old" after wearing them once or twice. One in seven consider it a fashion faux pas to be photographed in an outfit twice. Simply put, young people today crave newness, and these cohorts are much more likely to embrace churn in their wardrobes. At the same time, younger generations are more interested in sustainable clothing than older consumers. Rental, resale, and refurbishment models lengthen the product life cycle while offering the newness consumers desire.

Meanwhile, luxury brands are raising prices, significantly. Prices of fine watches and jewelry have nearly doubled since 2005. Tracking global prices of Louis Vuitton's Speedy 30 handbag suggests an increase of approximately 19 percent per year since 2016. So, even consumers with six-figure incomes are looking to discounts and alternative models of acquisition for relief.

These demands are catalyzing the successes of rental and preowned models. We expect that the ability of these players to satisfy a heightened desire for newness and an increased unattainability will bring them into the spotlight in 2019. That's reflected in survey data from our State of Fashion research (exhibit).

Luxury consumers can circumvent the price increases of the Speedy 30 bag, for example, through The RealReal, which was founded in 2011 and, as of May 2018, enjoys a $450 million valuation. It sells luxury brands, in gently used form, via a consignment model. The RealReal's hook: top fashion brands, up to 90 percent off. It recently raised $115 million in a Series G funding round and plans to expand its brick-and-mortar presence in the United States.

China's YCloset takes a different approach, using a subscription rental model to grant customers access to an array of clothing and accessories free of additional charges. Customers that like a particular piece have the option to buy it outright.

Although established brands have traditionally turned a blind or scorning eye toward secondhand retail, they are now wading into the preowned and rental markets. For example, Stella McCartney launched a partnership with The RealReal in 2017, offering a $100 credit to consumers consigning her products on the platform. This can create a circular flow that encourages footfall in Stella McCartney stores, while building confidence in the quality and longevity of Stella McCartney products. Additionally, because of the circular nature of this partnership, it bolsters the corporate and social responsibility of the fashion brand.

Other luxury players, such as Richemont, have purchased resale or rental businesses outright, to take control of how their products and brands are marketed on the secondary market.

Some players have ventured into refurbishment, taking advantage of its sustainability benefits. Eileen Fisher, through its program "Renew," takes back gently worn products and either refurbishes them or uses the materials to create new products all together. Patagonia pioneered an in-house repair and resale model by buying back their own products and selling those used items at a discount price. On its website, Patagonia asserts, "The single best thing we can do for the planet is keep our gear in use longer and cut down on consumption."

The company Express is betting on the rental market, launching "Express Style Trial," which allows consumers to rent up to three items at any given time for a monthly fee. In an interview with CNBC, Express's chief customer-experience officer, Jim Hilt, states, "The consumer who is more interested in access versus ownership is happening across many industries. We looked at this evolution and asked, 'How do we participate?'" In New York, French label Ba&sh is offering free rentals over a weekend period as part of its North America expansion strategy.

Turning to the months ahead, we expect 2019 will be known for three developments in particular. First, the number of brands getting into the rental, resale, and refurbishment business will increase markedly; established players will progressively regard alternative ownership as a force they need to embrace, or at least test, through new collaboration models with retailers or start-ups in the sector. This will require careful business-model considerations and a clear choice between partnerships, in-house development, or M&A. Second, we predict a notable increase in the number of "rental native" brands born exclusively for rental or subscription models. We would also not be surprised to see a unicorn in this space soon. Finally, more consumers will see a growing proportion of their wardrobes made up of preowned or rented products, especially for high-value items and accessories. While traditional players need not yet be alarmed, it will be essential to fully understand the emerging signals of what consumers prefer to own versus rent.
For more on all ten trends that will define the fashion agenda in 2019, see The State of Fashion 2019: A year of awakening.

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The end of ownership for fashion products?

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Fashion business models capitalizing on preowned, refurbished, or rented products have hit the industry. Brands and retailers need to pay attention as these models continue to evolve.

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(Bloomberg Opinion) -- In an era when fashion trends change in a nanosecond and people increasingly live their lives on camera, many shoppers have a "one and done" approach to outfits: they want to wear a look a single time and then move on to the next.

But mid-range retailers angling to help shoppers look good in selfies don't want to end up with a pile of unsold multicolor sequin party dresses, and they can't bear the increasing cost of consumers wearing and then returning garments.

Could rental services be the solution? It's a well-established practice at the high end, but getting the economics to work for affordable brands is tricky. And it looks like the enemy of efficient retail - it's a complicated business that could sap traditional sales.

But the risks haven't stopped Hennes & Mauritz AB from thinking about it. Express Inc. is among U.S. brands that have already got started.

It's worth a shot. Sales are being squeezed in both America and Europe as women's spending on clothes is increasingly getting shifted to experiences such as vacations and meals out. Renting could help retailers adapt to this new reality, as well as solve some of fashion's perennial problems.

A chain stuck with a bloated inventory - perhaps because it has been a little too bold in its buying choices - could divert surplus items to a rental operation, where consumers might be more inclined to take a risk with fashion-forward pieces. This could offer a better economic outcome than getting rid of the excess through heavy discounts. Markdowns to shift unwanted stock can be a real drag on margins.

Then there are the millennials. Their demand for fresh looks is prompting some to order garments, wear them, and return them to retailers as unwanted goods.

One in five U.K. clothing consumers admit to this behavior, according to research firm Mintel. This makes "wardrobing," as the practice is known, a big and expensive problem. It undoubtedly contributes to online retailers' returns rates, which can be as high as 50 percent of everything sold.

Chains could try to cope with both of these challenges by starting up a rental service. After all, they already deal with returns, some cleaning and repairs to resell garments.

But it's much harder to persuade consumers to hire affordable apparel than catwalk creations, where Rent the Runway has demonstrated the appeal. That's because there are so many cheap and chic options available.

Still, there are some models that could work. Hirestreet, a U.K. start up that works independently of retailers, offers 10-day leases starting at around 10 pounds ($13) on mid-market occasion wear from the likes of Inditex's Zara and Asos Plc.

This compares well with the cost of buying an item from a fast-fashion retailer, and could persuade consumers to switch from wardrobing to hiring. This also looks financially viable, and could give chains an incentive to experiment. It seems to be working for Hirestreet as well - although it is investing heavily in stock right now, its core operation is profitable.

In the U.S., CaaStle operates rental services for its own Gwynnie Bee brand as well as for third-party retailers including Express, American Eagle Outfitters Inc. and Ascena Retail Group Inc.'s Ann Taylor. It charges a flat fee per active subscriber to provide all aspects of the offer, from logistics to laundry.

Christine Hunsicker, chief executive officer of CaaStle, says the economics do stack up: retailers using its platform to offer rental subscriptions can generate operating margins of 25 percent. That compares pretty well with the profitability of a mid-market fashion chain.

Apparel leasing has its limits as an industry. While the U.S. market could reach $4.4 billion by 2028, according to GlobalData, that would represent just 0.9 percent of total clothing sales in that year.

And it probably won't work for all retailers. Those selling a large assortment of basics such as denim, which customers are happy to purchase, aren't a good fit.

But for some chains, such as those focused on younger fashion, renting can go a long way toward tackling wardrobing. And for many others, it could be a useful way to bring in new customers. Hunsicker estimates that some 50 percent of subscribers are new to the retailer or have not shopped with it for the previous 12-24 months.

It can also help brands cope now that the tide is beginning to turn against disposable fashion. British lawmakers recently proposed a penny tax on all new garments. Indeed, H&M is considering it along with other initiatives as part of its broader sustainability agenda - though an additional benefit might be shifting some of its $4 billion of unsold stock. It's also a way for clothing chains to tap into consumers' increasing willingness to participate in the sharing economy.

With so much industry pressure and so many customers trying to figure out how to shop a selfie, one solution may be for retailers to dip the toe of their party stilettos into renting.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.

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(Bloomberg Opinion) -- In an era when fashion trends change in a nanosecond and people increasingly live their lives on camera, many shoppers have a "one and done" approach to outfits: they want to wear a look a single time and then move on to the next.

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In an interview with ByRotation’s founder, Eshita Kabra-Davies, and The Modems, Eshita had mentioned that the main target market of her platform are Millennial and Gen Z. She also mentions that there are quite a few students and graduates joining the app.

For Hurr, on the other hand, co-founder Victoria Prew emphasizes on how they target millennials with the app. According to Raconteur (2020), Prew states that Hurr serves as an additional revenue stream for brands and opens up to a millennial audience highly engaged in sustainability. She believes that Hurr introduces luxury brands to future shoppers who will eventually have the buying power. As stated by Prew in Financial Times (2019), “the appetite for rental fashion is massive, especially among young women -- a typical Hurr girl is aged between 25 and 35 -- and it's only gaining momentum”. Between March and September 2019, 10,000 new users have signed up for Hurr and they have also been seeing month-on-month growth of 120% in listings. According to Harper's Bazaar (2019), in terms of lenders, Prew also mentioned that they have lenders over 55 years old who have built amazing wardrobes over the years. The older generation effectively rents out their wardrobe to the younger generation.

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The rental fashion industry is also growing in Australia and Asia. According to the Financial Times (2019), YCloset, founded in Beijing in 2015, received a $50m series funding by Alibaba Innovation Ventures, Softbank China and Sequoia China in 2017.  China’s market for womenswear rentals is predicted to be worth more than Rmb100bn in the coming years.

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ByRotation, founded in 2019, is the first UK fashion rental service to have a mobile app. Hurr, on the other hand, only operates through an e-commerce site.

According to Eshita Kabra-Davies, ByRotation’s founder, they aim to make fashion circular and accessible to all. Eshita goes on to say that they have over 12,000 rotators in the UK (Elle, 2021).

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HURR is the UK's first peer-to-peer clothing rental service.

Hurr was founded in 2017 and has already gone through an investment round back in 2019.

According to Drapers (2020), New Look founder Tom Singh and Roger Devlin, the founder of house builder Persimmon, invested in the company in its latest round of fundraising.

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The UK clothing rental market is predicted to be worth £2.3 billion by 2029

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KEY PLAYERS IN RENTAL FASHION: PEER-TO-PEER PLATFORMS

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KEY PLAYERS IN RENTAL FASHION: PEER-TO-PEER PLATFORMS

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Rent the Runway continues to expand even throughout the pandemic. According to the Business of Fashion (2020), the company is raising new funding that would value them below their previous $1bn valuation (valued at $1bn last May 2019). Rent the Runway is currently seeking at least $25m in a funding round by the T.Rowe Price Group Inc. which values the company at around $750m.

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Rent the Runway, a US-based fashion rental service founded in 2009, is known for popularizing the fashion rental movement.

Men have been renting tuxedos for years, while renting evening dresses and accessories were not so popular for women. The founders of Rent the Runway, brought a “male concept” to feminine fashion. (Forbes, 2013)

The service allowed women to wear luxurious evening gowns for a fraction of the price.

Rent the Runway started as a way for women to rent dresses for special occasions like birthdays and weddings. However, Rent the Runway has now expanded to everyday wear through subscriptions wherein customers can fill their wardrobes for a week's worth of outfits (Bloomberg, 2020)

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THE SHARING ECONOMY IN FASHION: RENT THE RUNWAY

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THE SHARING ECONOMY IN FASHION: RENT THE RUNWAY

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Examples of Businesses in The Sharing Economy

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Examples of Businesses in The Sharing Economy

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eBay (ONLINE MARKETPLACE)

Uber (RIDE SHARING)

Airbnb (FLAT SHARING)

Rent The Runway (CLOTHING RENTAL)

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eBay first enabled the sharing economy when it was launched back in 1995.

Before the launch of eBay, the most common way for people to buy and sell used items were through garage sales.

However, these were done infrequently and did not have a global reach as compared to online marketplaces.

As stated in the Financial Times (2019), although eBay is nothing compared to modern sharing economy companies such as Airbnb and Uber, it was still the first step towards connecting individual buyers and sellers without a retailer in the middle.

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According to PWC, it is predicted that the sharing economy could generate $335bn in revenues by 2025, which is a huge jump from $15bn in 2016. As stated in the Business of Fashion (2016), the sharing economy allows people to transform their possessions into revenue streams as they are able to make more use of their items.

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BNPL is like using a credit card or getting a loan. But unlike credit cards, there is light at the end of the payment tunnel. Purchases are paid in installments over the course of a few weeks or months. And unlike credit cards, it's interest free.