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Could Paying in Installments Make Sustainable Fashion More Accessible?

Splitting payments into manageable chunks could make investing in big-ticket (and responsibly made) items feel more possible for a wide range of shoppers.

More people than ever are searching for "sustainability" when they shop, and retailers are creating dedicated search platforms to cater to that increasing desire. But even for those who want to shop for responsibly-made fashion, there's often still one major barrier: price. Only 26% of millennials and 12% of baby boomers are willing to pay more for sustainable products, according to the 2019 McKinsey New Age of the Consumer U.S. Survey.

For many retailers prioritizing ethics in their supply chains, competing with the rock-bottom prices offered by fast fashion purveyors simply isn't possible. But the new purchasing landscape offers a potential solution. New ways of shopping, including paying in installments, renting to own and collaborative saving, make it easier for customers to work toward purchases — while still ending up with investment pieces that are sustainably sourced, ethically produced and built to last. This means they often yield a lower cost per wear than a cheaper piece would, while maintaining more resale value.

Interestingly, most of these routes are a blast from the past when austerity, patience and an emotional connection with the garment were the order of the day, a far cry from our current impulsive shopping habits.

Buy now, pay later

The first option in this deck of alternative payment formats is the 'buy now, pay later' (also called BNPL or afterpay) mechanism that took off in the 2010s in the realm of consumer electronics. Services like Afterpay, Affirm and Openpay allow for the shopper to receive the product up front while financing payment over three to four months.

While in most cases, no interest is charged, late fees are capped and buyers are sent multiple notifications to pay on time, BNPL has earned a bad name for pushing younger customers into 'debt traps' and hurting their credit scores. Buying a $10 throwaway Missguided crop top on credit is — surprise! — not exactly the best application of this method.

Secondhand luxury clothing sites like Vestiaire Collective and TheRealReal have begun to offer similar plans and might be a better fit. And some 'sustainable' brands explicitly justify the presence of BNPL at their checkout pages.

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The tagline at American brand Maven Women reads, 'Clothing is an investment. Afterpay lets you pay for it as such.' British clothier Henri London works with Swedish payment gateway provider Klarna and states on its site, 'Quality comes at a price, no matter what you're buying. We want to make shopping with Henri an affordable option for everyone.'

Of course, some might argue that one should only buy what they can afford. Henri London's founder, Henrietta Adams, thinks it's a little more complicated than that.

"Yes, I think one should only buy within their means," she says. "But if that means buying from brands that make huge environmental and social compromises to squash down prices, then where is the ethical argument to back that up? You can't say that paying for a sustainably-made piece in a few installments is less ethical than financially supporting fast fashion."

To Andy Harding, UK Managing Director at Australian BNPL player Openpay, responsible lending means utilizing BNPL plans — but steering clear of mass-market fashion. Harding is aiming to sign up luxury brands and serve an older customer who can afford to pay. 

"The onset of open banking has created a new wave of smarter customers who control their finances better and are anti-credit," he tells Fashionista. "With buy now pay later, we offer them a mechanism to make purchases while managing their cash flows, interest-free."

New-age banks like Monzo and Revolut do equip the users with saving tools and dashboards, but they may have less capacity to impact how their users spend on fashion than an afterpay program that lives directly in the online shopping interface would. 

"Impulsive purchases are driven by emotions or the right side of the brain — usually peer-to-peer comparisons due to social media, or another stress at work or home," explains financial technology (aka fintech) expert Devie Mohan. "These impulses can only be controlled to a small extent with the help of logic. So I believe dashboards are nice to have, but not very effective in controlling shopping or spending behavior."


BNPL is often considered a 21st-century update on the original purchase arrangement, called lay-by or layaway. Dating back to the period of The Great Depression in the 1930s, lay-by helped cash-strapped customers pay for goods interest-free over a period of time. Till the full payment could be made, products would be stored at the retailer's end. If the buyer changed their mind about an item, they would get a refund, minus cancellation fees.

Lay-by was popular for years in the U.S., Australia and Europe, but faded in popularity when credit cards arrived in the 1980s.

Offering lay-by to a generation programmed by social media and online shopping to expect instant gratification might sound like an out-of-sync approach, but some slow fashion proponents think it has promise.

Eleanor White runs a brand called The Old Rectory Clothing Company out of Dorset, England and is piloting a layaway program she calls 'pay at your own pace.' Her clients decide on the installment amount and frequency and pay via Paypal, and White reserves the fabric till full payment comes through. 

"I've had a wonderful response to it as my customers appreciate the flexibility of payment," she says via email. "I can never compete with big brands on prices, and this is my way of making buying clothing from a small business accessible without the use of credit." 

Her handmade designs are timeless and don't ever go on sale, so there's no worry about price fluctuation getting in the way of customers being willing to commit. This customer attitude is exemplified by Lori Smith, a writer and researcher who says she's game for lay-by if her favorite brand offers it. A coat for the next winter is already on her mind, and she is willing to wait and wants to stay debt-free. 

"I am keen because the money will most definitely go towards the coat, reserved in my name," she explains in an interview. "I do need the coat and, in this way, I cannot get distracted and spend on something else."

While perhaps not scalable for larger brands, this version of slow buying, locked down to a product and retailer, embodies a kind of commitment and patience that may already be present amongst slow fashion enthusiasts.

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Save now, buy later

Another road to delayed gratification is paved with pebbles of financial responsibility – and saving up.

US-based Reel and UK-based Cashmere are fintech-cum-e-commerce apps that list fashion items on their platforms and enable users to save up for high-value items rather than pay through credit. Both startups focus primarily on luxury and boast affiliate partnerships with retailers like Net-a-Porter, Farfetch and Neiman Marcus. According to Cashmere's founder Urenna Okonkwo, some of the app's users have already begun asking for sustainable fashion brands to be included in its offerings.

The way it works is pretty simple. While browsing through product listings, the user sees corresponding recommendations for daily or monthly savings — for example, a pair of Balenciaga sunglasses can be acquired by saving £50 for six months on Cashmere. Once a product and saving strategy is chosen, automatic monthly or weekly transfers are enabled from the user's bank account to the app's digital wallet. Users can pause, increase or decrease the savings amount at any time, or quit the process by paying an exit fee. Once the savings goal is reached, the item is bought and delivered through the app.

"We are launching new dashboards with motivational trackers for [users] to see how far they are from hitting their goal," Okonkwo tells Fashionista in an interview, "and they receive price change alerts on the item they are saving for. Loyalty points are awarded for hitting milestones."

Okonkwo has been running research panels with around 700 Londoners using the app, who are saving an average of £75-£100 every month. She says that many of them admit to reviewing and planning their fashion spends for the first time — which may be a good sign for those who want to see all shopping undertaken with more care and intention.

Collaborative saving and consumption

Still, staying consistent with a saving plan isn't easy for some of the 20-somethings on Cashmere. To bring in the discipline and give them a chance to reach their goal quicker, Okonkwo decided to test the dynamics of group saving. She has partnered with another London-based start-up, Stepladder, that helps first-time home buyers raise money for a down payment.

Here's how it works: All members on Stepladder are placed into smaller groups called circles. Each individual contributes the exact same amount of money to a central pot. And every 30 days, a member gets randomly selected to withdraw the group's entire monthly contribution. This carries on until all members draw out the monthly sum. The risk of member default is covered by Stepladder.

It might sound complicated to a first-timer, but community saving "loan clubs" are popular in many nations and called by different names, like 'susu' in West Africa and 'chit funds' in India.

Stepladder's financial model, 'Rotating Credit and Savings Association' (ROSCA), is now being applied to fashion: Cashmere is currently piloting its first circle with 10 women, each depositing £50. Every month, one of them receives £500 in her Cashmere wallet.

There's an element of credit if you are one of the early birds withdrawing the amount. But youngsters seem to be most drawn to the gamification aspect — the suspense of knowing who wins the monthly round. One such user, a 23-year-old ad executive named Holly Hanley, likes the idea of members supporting each other. 

"I would trust people more than the corporations doling out BNPL," she says.

So far, the members in circles are strangers, though Stepladder is launching an ambassador program that allows a person to run their circle for an amount and duration they desire. When translated to fashion, a group of friends could group-save to buy an investment item like a Birkin bag and timeshare it, similar to the way one might with a beachside home.

Rent to own

The "sharing economy" has found takers in fashion as women open up to renting and swapping clothes for variety and affordability. Furthermore, renting a high-quality item might be the most preferred version of 'try before you buy.'

'Rent to own' is yet another old concept that used to be prevalent in the U.S. and Europe and appealed to low-earning families. A flexible arrangement, it involves a rental payment and an option to buy.

Michael Solomon, consumer behavior strategist and author, calls its current version exploitative, "because the ownership price is generally way over market value, e.g. that TV you rent monthly would cost a lot more to buy [via renting] than if you just went out and purchased one new."

But under the right conditions, he thinks the model has potential for fashion. 

"A psychological investment accrues when we own something (generally called the endowment effect)," he says in a Skype interview. "As you make more payments the item becomes more closely linked to your self identity, so a sort of momentum occurs whereby you are more eager to reach the end state (ownership) than to start over with a different item."

A version of rent-to own exists on Amazon Rentals, renting out books, textbooks and mattresses in the U.S. market. The buyer can keep renting until the listed price is paid off, or they can opt to buy at any point by adjusting the rental fees. This potentially offers an interesting business model for established players like Rent The Runway, which presently offers members a discount if they buy a piece they've previously rented. Solomon sees it as "a cost-effective route for luxury companies to get new buyers into its franchise."

In short: there's lots of promise for the ways that these new purchasing methods could change how we buy. But it's not clear yet whether they'll actually convince us to invest in fewer, but better-made, things.

Chair of Fashion Design at California College of the Arts Lynda Grose recognizes that it's complicated. 

"Some of the above layaway [or] pay later approaches show promise in that they may help people bend away from impulse purchases... to adopt more thoughtful purchasing behaviors," she says. "Ultimately, we need to move away from a business and industry model dependent upon conspicuous production to one that places human activity within the context of nature's constraints."

By 2030, global apparel consumption is projected to rise by 63%, from 62 million tons in 2015 to 102 million tons. Only time will tell if new purchasing methods can help us collectively rethink our consumption patterns to disrupt that unsustainable growth trajectory before it's too late. 

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