Fashion’s Circular Models of Clothing Ownership
A Deep Dive into Resale, Rental, and Subscription Models
Circular fashion is changing how we shop and why we buy. It encourages borrowing instead of buying and rotating your wardrobe like a playlist.
Ever looked into your closet and felt an overwhelming sense of guilt? Maybe you saw a piece of clothing that hasn’t been worn in years, or you’re unsure where to wear that evening gown after the event is over.
Circular fashion is about reducing waste from style choices. It helps us dress while caring for the environment. At its core, it promotes minimizing waste, lengthening clothes lifespan, and changing the business of fashion.
Fast Fashion’s Hangover—and the Fresh Start We Need
It’s no secret that the fashion industry is wasteful.
Experts have ranked the fashion industry as the second-largest industrial polluter after the oil industry. With a global carbon emission of 10%, it ranks higher than emissions from international flights and maritime shipping combined. This number is expected to rise quickly as it's estimated that the industry's emissions will exceed 60% by 2030.
"Fast fashion" is responsible for this increase. The term refers to the mass production of clothes that copy high-end styles, to make them affordable for consumers. The name speaks for itself, as the turnaround for fast fashion pieces is concerningly quick and unethically produced.
Meet the Power Trio of Circular Fashion
Circular fashion disrupts this wasteful cycle through 3 Business Models:
Secondhand Shopping
Fashion Rental
Subscription Clothing Boxes
Secondhand and Recommerce
This first circular model focuses on buying secondhand clothes– and how it’s gone digital. You don't have to go to a thrift store and look through racks of unwanted clothes. Shopping secondhand can feel like a treasure hunt, and this sense of discovery is not lost in digital recommerce.
Analysts expect the U.S. secondhand apparel market to reach $73 billion by 2028, growing on average about 11% annually. Out of the entire market, 63% of consumers purchased second-hand apparel online.
Generational insights from Thred Up’s 2024 ResaleReport
Buy or Sell: You Choose
Secondhand platforms enable customers to act as both buyers and sellers.
Want to Shop?
High-quality pieces sold at a fraction of the cost
Low-cost and high-reward search: filter and recommendations
Unique clothing that doesn’t take excessive time to look for
Looking to Sell?
Companies provide access to create your customized listing
Shipping options: Prepaid labels or opt to self-source a shipping carrier
Direct messaging with peer buyers
Where to Shop Secondhand Online
The Real Real- Authenticated luxury goods
ThredUp- Donate goods to be sold, as well as shop from a selection processed by the company
Depop: Peer-to-Peer resale that encourages community interaction
Fashion Rental
This first business model is the gift that keeps on giving. You’re probably familiar with borrowing a suit for weddings, but this is the same concept elevated. Why spend a lot of money on one item? Instead, consider borrowing that piece at a fraction of the cost.
Fashion rental services offer a library of options, with platforms ranging with selections from runway looks or everyday wear.
How Does It Work?
Businesses set prices at around 10% of the recommended retail price. The rental periods vary across platforms, usually lasting 2-4 days for formal wear and 4-7 days for casual wear.
The lender, whether a peer or a business, is in charge of the cleaning and maintenance of the item. So the buyer can wear the item stress-free without the hassle of washing and drying before sending the clothes back.
Subscription pricing has been introduced to fashion rentals, and customers can choose from tiered plans that allow for item swapping and the possibility of owning. When you’re done with your clothes, you can send them back or buy the items at a discounted cost than the retail value.
The Benefits:
According to the Waste and Resource Action Program, extending a single clothing lifespan by nine months can reduce its carbon, water, and waste footprints by 20%.
Combats single-use buying, as formal eventwear, can be borrowed and reused after the event is over.
Types of Rental Services:
Peer-to-peer rental
B2B Rental
B2C Rental
B2B2C Rental
Read about The Business of Borrowing: Inside the 4 Rental Frameworks Powering the Circular Fashion Economy
Subscription-Box Style
The third circular fashion business model is curated fashion, but in a box. It uses subscription-based pricing to send out monthly boxes of clothing pieces.
Unboxing the Frustrations
The style quizzes and initial curation of these fashion subscription boxes are not perfect.
Automation: Using algorithms and AI to sort out information from style quizzes does not guarantee that the personal touch consumers are looking for. The data used to select the pieces sent out is only meant to fulfill fashion archetypes that don’t appeal to every user.
Trial and Error: With continual use, the data and feedback these platforms collect from what you send back shape the algorithm. Receiving your first box and only liking 4 out of 5 of the items often deters subscribers from trying again.
Vice columnist Ryan Bassil experimented with several subscription companies like Stitch Fix, THREAD, and Outfittery. Specifying his taste in the style quizzes, he chose categories like casual workwear, bold colors, and experimental style. After being directed to choose brands he already wore and paired with their AI stylist, the box he was sent seemed out of touch with his taste.
Why Brands Are Getting Circular Too
For fashion companies, circular models are more than just a marketing strategy—they’re a smart business move.
With rising return rates and an increasingly fast-paced trend cycle, the traditional one-time purchase model is no longer sustainable. Circular models—resale, rental, and subscription—offer a way for brands to profit from clothing in a different way. These systems don’t just rely on the consumer; they require active participation from both shoppers and businesses to keep the cycle moving. It’s a collaborative shift, redefining what ownership and value look like in fashion today.
