ARI SHAPIRO, HOST:
Millennial and Gen Z shoppers concerned about the environment are pushing fashion brands, especially purveyors of fast fashion, to change their business models. Stacey Vanek Smith and Sally Herships from our daily economics podcast The Indicator from Planet Money explore how H&M plans to start renting clothing in a bid to appeal to its environmentally conscious young consumers.
STACEY VANEK SMITH, BYLINE: So H&M has a problem. It sells fast fashion from the best in the business, but its customers are mostly young shoppers, like millennials and Gen Zers, and they increasingly care about the environment and about labor practices.
MARYLEIGH BLISS: These are two generations that have been raised really being told that everything that they do has a significant impact on the environment.
SALLY HERSHIPS, BYLINE: That's MaryLeigh Bliss. She's with YPulse, a youth research agency. And she says these are generations that are worried about things like, were your clothes made by child labor? Was the fabric farmed in a sustainable way? Is the label that is making your clothing dumping toxic chemicals in that river near your house?
BLISS: There's a really high consciousness for Gen Z and millennials about the waste that they produce.
SMITH: So H&M is trying to go from being seen as, you know, just a store where you can buy something quick and hip and cheap and disposable to a more conscious kind of brand, and it is doing that by offering rentals.
SMITH: Yes. So if you're a customer who's part of the H&M loyalty program in Sweden, you can now rent clothes at the flagship store.
HERSHIPS: Yeah. And rentals are becoming super common for retailers. Like, all these different brands are getting on board - like Banana Republic, Ann Taylor, Levi's, even Macy's.
SMITH: So here's how these rental services work. You pay a monthly subscription fee. At Banana Republic, for instance, it's $85; Ann Taylor - a little fancier - $95. You are allowed to have three items out at a time. Free shipping, free returns. H&M works a little bit differently - you pay per piece, about 350 Swedish kroner or about $36.
HERSHIPS: But if you're thinking, wow, H&M - aren't these clothes kind of disposable? Yeah, not such great quality. You should know that H&M has a whole other side. The clothes the company is renting come from its Conscious Exclusive Collections. They're made with sustainable materials like organic silk.
SMITH: MaryLeigh says, so far, H&M's strategies seem to be pretty popular with its customers. Her company did a survey, and it found that about 12% of millennials have rented clothes and about 6% percent of Gen Zers.
HERSHIPS: And seeming more eco-conscious is not just a strategy for fashion brands. All kinds of brands are trying to be seen as more environmentally conscious and to make their consumers feel less guilty.
So this is just like when Burger King started offering fake beef.
BLISS: Plant-based meat is another great example. And young consumers, their consciousness around how all of their behavior impacts the environment is something that all industries really need to be aware of.
SMITH: H&M's rental program is currently only being tested in Sweden. We asked millennial shoppers what they thought about rentals as a sustainable alternative to fast fashion. One of those shoppers told us she thinks H&M calling its lines of clothing conscious ultimately rings a little hollow because, as she points out, the company is still making most of its profit off of fast fashion.
Stacey Vanek Smith.
HERSHIPS: Sally Herships, NPR News.
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