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Consumerism

Renting Clothes for Sustainable Fashion: Niche Markets Hold Key to Success

Renting clothes can reduce the fashion industry’s enormous environmental impact, but so far, the business models have not worked very well. The best chance of success is for a rental company to provide clothing within a niche market, such as specific sportswear, and to work closely with the suppliers and clothing manufacturers.

Published

7 months ago

March 30, 2025

Mona V

Renting clothes can significantly reduce the environmental impact of the fashion industry, which accounts for up to 10% of global greenhouse gas emissions. Researchers at Chalmers University of Technology in Sweden have studied alternative business models for the clothing industry and found that a rental company’s success lies in targeting specific niche markets.

In Sweden, over 90% of clothes’ climate impact is linked to purchasing newly produced goods. The researchers analyzed nine Swedish companies attempting to create sustainable and desirable clothes rental services. They identified three primary business models:

1. Membership model: customers become members and borrow clothes for a set period.
2. Subscription model: customers pay a monthly fee to rent a certain number of garments.
3. Individual rental model: companies provide specific types of clothing to rent, often paired with other equipment.

The researchers found that these business models face challenges in achieving profitability due to high costs for handling, logistics, and laundry, as well as difficulties obtaining venture capital.

However, companies focusing on niche markets, such as outdoor clothing, were more successful. By working closely with suppliers and manufacturers, rental companies can gain valuable insights into popular types of clothing and their quality. This collaboration enables the creation of value and helps businesses establish themselves in the market.

Based on their research, the scientists provide recommendations for those trying to rent clothes as a business model:

* Identify specific niche markets
* Collaborate with suppliers and manufacturers
* Develop a sustainable and desirable product or service
* Establish strong relationships with customers

The study emphasizes the importance of initiatives contributing to sustainability transitions, even if some companies may not survive. The results can be an essential contribution to the fashion industry’s transition towards more sustainable business models, providing insights for decision-makers and financial motivation.

By promoting sustainable fashion practices, such as reduced clothing purchases and extended use of existing garments, we can reduce waste and minimize the environmental impact of the fashion industry.

Source:Chalmers University of Technology

Original Link:https://www.sciencedaily.com/releases/2025/03/250327141732.htm

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Behavior

The Star Effect: How Rating Formats Shape Consumer Perceptions

Researchers found that consumers tend to overestimate fractional star ratings and underestimate fractional numerals. In either case, the ratings can be misleading, potentially causing a company to unknowingly overpromise and underdeliver — or sell its own product short.

Published

5 months ago

May 20, 2025

Tomy E.

The way we display product ratings has a profound impact on consumer behavior. A new marketing study from the Cornell SC Johnson College of Business reveals that consumers tend to overestimate fractional star ratings while underestimating numeric ratings. This can lead companies to unknowingly overpromise or underdeliver, potentially affecting their sales and reputation.

In six experiments, researchers found consistent results across all participants, demonstrating a clear difference in perception when ratings are displayed using stars versus numbers. The study’s first author, Deepak Sirwani, explained that the brain automatically completes half-pictures when presented with fractional star ratings, making them feel more like 3s than 4s. On the other hand, numeric ratings cause participants to focus on the left digit, resulting in an underestimation of their magnitude.

This phenomenon is not just about numbers; it’s also about how our brains process images and standard Arabic numerals. According to Manoj Thomas, a professor of management at Cornell University, “Our results suggest that the brain representations activated when processing stars are completely different from those activated when processing Arabic numerals.” This fundamental difference in brain processing has significant implications for businesses, as it can impact consumer perceptions and sales.

The researchers’ findings have far-reaching consequences, highlighting the need for new industry standards in rating formats. As Sirwani pointed out, ratings have become a crucial factor in purchasing decisions, often rivaling price, brand reputation, or even personal recommendations from friends and family. In fact, other research has shown that even a 0.2-point increase in ratings can boost sales by up to 300%. Given this context, the study’s conclusion that the star effect can potentially increase sales by orders of magnitude is both striking and significant.

In conclusion, the way we display product ratings matters more than ever. Businesses must be aware of the “star effect” and its potential impact on consumer perceptions, taking steps to ensure their rating systems accurately reflect the quality of their products or services. Only then can companies confidently promise what they deliver, ultimately leading to increased customer satisfaction, loyalty, and growth.