gnerex, which launched in 2016, among others.  These businesses thrived on the “wear once and post” Instagram culture. But in recent years, many of they seem to be struggling. Rent The Runway had to pivot its value proposition after its stock dropped 90 per cent one-year post its IPO, and earlier this year Designerex went into voluntary administration before being acquired in July. Fashion at the best of times has a harsh maths, let alone a fashion rental business that must account for costly operational frictions including logistics, cleaning and sizing challenges. But more than just financially challenging, the fashion rental business model appears to not be a cultural fit for consumer behaviour today. Trend-motivated consumers are able to turn to ultra-fast fashion brands, such as Shein or Temu, to get the look-for-less, or in some cases an identical dupe. Meanwhile, environmentally conscious consumers are able to browse countless consignment platforms like The Real Real and Vestiare Collective for coveted items at a fraction of the price. Where does this leave fashion rental platforms? As the fashion pendulum has swung away from renting back to owning, fashion rental platforms are reevaluating their strategies, and fashion brands are deliberating whether the rental business is a worthwhile endeavour. Rosanna Iacono, CEO of the Growth Activists and one of Australia’s leading advisors across retail strategy and sustainability, told Inside Retail that the concept of rentals replacing new purchases is happening but it has not yet manifested at scale.  “Rental is still largely confined to occasionwear, and is still working to overcome the operational complexities – both perceived and real – of short-term use, like two-way shipping and dry-cleaning between transactions,” she explained. From Iacono’s perspective, fashion rental businesses understand their core demographic is urban women aged 21 to 40, who are values-driven, motivated by access, affordability, sustainability and often highly attuned to digital trends and conscious consumption. But while most fashion rental businesses know their customer profile, they are failing to meet their expectations for a modern-day retail transaction.  “Many rental businesses underestimate how critical garment quality, perfect fit, and convenience are to customers, expecting them to trade down on experience for sustainability, when in fact most renters want a service as seamless and aspirational as traditional retail,” Iacono stated.  “The rental platforms that address this have a considerable advantage,” she added. While fashion rental platforms meet the mark for conscious consumption, many haven’t innovated as quickly as e-commerce brands and consignment marketplaces. “Online rental businesses can compete by leveraging technology, offering advanced sizing tools, rapid delivery and exceptional digital service that matches or exceeds in-person experiences. Building communities, personalised styling and flexible logistics are key,” she said. “But the real edge will come from integrating digital product passports and loyalty benefits that physical retail cannot match.” According to Iacono, integrating ‘digital product passports’ (DPPs) into fashion rental platforms would allow every garment to be uniquely tracked, authenticated and linked to its story and care history.  “But even more importantly, DPPs will allow garments to be treated as IP, and potentially enable the brands who created them to earn a royalty fee every time a garment is rented or resold,” she elaborated. Returning to the peer-to-peer model While fashion rental platforms are reconciling how to modernise their inventory and services, Australian peer-to-peer rental platform, The Volte, seems to be going from strength to strength and continent to continent. Perth-based The Volte launched in 2018 and closed a $4 million Series A round led by Ebay Ventures, the e-commerce giant’s investment arm. In June, The Volte announced its international expansion to the UK as a test market before global expansion. “What makes platforms like The Volte particularly interesting is that they’re not just offering a more sustainable way to engage with fashion – they’re also empowering individuals to turn their wardrobes into income,” Phoebes Garland, founder and director of fashion consulting agency Garland & Garland, told Inside Retail. According to The Volte, it has approximately 250 “super lenders” who earn up to $200,000 annually by renting out their clothing for about 30 per cent of the retail price. “Many women, particularly over 40, still prefer to own key pieces, but for younger shoppers or those regularly attending events, rental is a smart, sustainable solution – and a savvy business opportunity,” Garland shared. Now, The Volte has commissioned a study with the University of Technology Sydney to analyse the environmental impact of the peer-to-peer clothing rental model. A key finding so far is that renting a single high-quality garment can reduce emissions by up to 78 per cent per wear.  “Consumers are more environmentally conscious and cautious with spending, and rental offers access to designer fashion at a fraction of the price,” Garland said. But The Volte isn’t just trading on its contribution to and promotion of the circular fashion economy; the fashion platform has invested in the digital passport technology that Iacono referred to. Through an API widget, customers can list their latest purchases for rent during checkout, generating a digital passport for each item to ensure authentication. “These innovations can enable a richer, more transparent customer relationship, and unlock new revenue opportunities on every transaction, advantages that may be harder for traditional bricks-and-mortar retail to deliver,” Iacono concluded.