The Interview: Isabella West, founder, Hirestreet and ZOA
Isabella West, named in Forbes 30 under 30 and a graduate from Oxford University in economics and management, founded the clothing rental business Hirestreet in 2017 with the purpose of helping customers find an affordable alternative to buying fast-fashion.
Tapping into a rental market segment that has up to this point been largely ignored, Isabella has found that demand cannot keep up with the growing business as customers find that renting instead of buying is not only more wallet-friendly but also better for the environment.
More on how and why Isabella founded Hirestreet can be listened to in a podcast episode hosted by TheIndustry.fashion senior news & features writer Tom Shearsmith.
In this interview Isabella talks about why she’s working hard to make sustainability accessible, deep-dives into calculations about the tipping point of when rental makes more sense than buying, and her new newest venture - a white-label rental platform called ZOA which launched earlier this year. Comparable to a Shopify for circular commerce, it enables brands to launch their own retail platform within just one month. This, she hopes, will encourage big retailers and entrepreneurs alike to ask “why go linear when you can go circular?”.
Thank you for joining us again! You go into this in more detail in the podcast, but could you give us some insights about what Hirestreet is and what kind of brands and retailers you work with?
Yes, absolutely. Hirestreet is basically built to provide a sustainable, affordable alternative to buying fast fashion. And what's really interesting is that we find we actually don't compete with other rental services. Instead of designer dresses we're renting out items that might be a £200 Whistles tuxedo that you'd rent for 40 pounds. If our customers didn't rent, they tend to panic buy from ASOS or Zara, that’s what we hear. The other kind of key area that we differentiate is that we are one of the only rental services that is not peer to peer, instead we work directly with brands and we basically help them choose stock and then we split profits. So, we have 50+ brand partners and they include, in the UK, Ghost, French Connection and Whistles.
And what about your customer base, can you give an indication of how many people use the site?
We've had well over a million people using the site. The problem is that we basically find that current demand outstrips our supply by over 20 times. So, we're desperately short, we actually have another 1000 items going on the site over the next three weeks. But even so, like we'll sell out. So that’s one of the bigger challenges we face, that we can't actually grow quickly enough. And so one of the new features we've just launched, it's super exciting, is 30-day rentals. And the whole concept of it is basically that people were telling us, I've got five events this December, I probably only need three outfits across all. So typically, they're booking on the fourth of December and keeping it to the fourth of January, which is great, because from a commerce perspective, but also from a cost perspective, it's one delivery and it's also one point of interaction with that customer. And I think it will be a massive shift towards how people rent.
That sounds like you're really interacting with and listening to your customer. Do you have a feedback system in place or is that just something that naturally comes to the company?
We are incredibly focused on the customer, and each team has customers metrics that they track. But I think that's been one of the key reasons why we've always had demand outstripping supply, because everything we've ever done has been guided by the customer. And sometimes it's a dangerous game and I think, just being totally honest, like there have been times where as a founder we have been too led by the customer and actually, there are times where you need to say no, we want to stay true to our brand. So, for instance, we've dabbled in kind of going higher-end and we don't see that much demand there. And so, I've definitely learned personally that we need strong brand principles and customer feedback loops.
You've also just started a white-label rental technology platform called ZOA, which offers brands and retailers the opportunity to launch their own rental service within a month. That sounds really exciting! What gave you the idea to launch it?
Well, to be honest, the retailers did. For the first time kind of March 2020 we started to hear retailers say we think we might do rental, and we would say to them, okay, what's stopping you? And they said we have no idea how, we don't know where to start. And we said, okay, we do rental and we've just gone through all of those teething points. So, we basically took what we had built for Hirestreet and decoupled it from our brand and basically made everything personalizable. So, if you are a retailer and you want to offer 20-day rentals, not 30-day rentals, that's fine. You can entirely customise every bit of your menu. We've built it like it's basically Shopify but for circular commerce - and we're the only people who are operating like that.
And what's really cool is that because we built it as a platform, we empower the next generation of entrepreneurs. We obviously are working with large retailers as well, but an entrepreneur can say tomorrow: "I love fashion, I was planning on starting like a Shopify store, but why would I start linear now when I can start circular?" Even in the last kind of couple of months alone, we've powered five new entrepreneurs to enter the space which is so important for the rental industry in general. Whether it's launching vintage with Timeless London, or ski-wear with Blanqo, all of these entrepreneurs are incredible in their vision. I think that's my favourite part of our platform, that we built it for large retailers but it's so much more than that. It really is a tool to disrupt the space.
We can’t name them but we’ve also got three very big well-known retailers launching in Q1 next year. And I actually think a lot of the fashion industry is a little bit on FOMO [fear of missing out] and I think we'll start to see rapid change once those big players announce that they're doing their own brand rental.
I really love the quote when you said "why go linear, when you can go circular?" which I think is a really good point. And on that note, obviously COP26 is happening right now – can you expand on the environmental benefits of clothing rental for fashion retailers?
What we find is like rental is a win-win, because for lower use-case items you're delivering excess profit. So, if we take a standard occasional dress, that could either sell once for 100 pounds or it could be rented 20, 30 times that and it would typically make three times retail easily. But obviously, retailers are also very much interested in the circularity picture. So typically, if you're buying a standard polyester dress from Zara it releases about 24kg of CO2 into the atmosphere. But up to 90% of that CO2 emission occurs in the production phase, so that's the energy used in the production of fabrics, the dyeing and materials. So 22kg worth of the total emissions of that dress has been produced up-front in production. Now, if you imagine that one person has consumed that to wear once, obviously, that's the total footprint of that dress is 24gm per wear. Now if you wear it twice, it's going down to 12 kilogrammes.
So, what we encourage customers to do is to think about how many times you would wear it.
That’s something I have heard time and time again, to ask myself before I am buying something – am I going to wear this 30 times?
It's exactly that. If you're in store and you're going to wear that outfit less than eight times, you should rent it instead. And the way we calculate that is basically, we take the up-front carbon production cost of that item and then we put that over 20, which is how many wears we’d get out of it. And even when you add back into the footprint the carbon cost of cleaning and delivery, what we find is that if a customer was to wear the item eight times, they'd be better off buying it than renting it, from a carbon perspective. And the McKinsey statistic, based on the kind of carbon profile of the fashion industry, is that you should aim, as a consumer, for one in five of your garments to be rented.
How do you think the sustainability conversation has up to this point maybe felt a bit remote or even elitist to the everyday consumer?
I think it's so true, we have found in the past that customers have told us that they feel like sustainability is a privilege. You have this whole cohort of young people that don't have access to premium, sustainable brands and also don't feel comfortable renting items that might, should they ever be damaged, end up costing them the whole savings for that month.
We are one of the only providers that really focus on the accessible sustainable side and I think it's so important because quite literally sustainability does not exist without accessibility. And particularly when we think about the fact that £40 billion pounds is being spent on fashion a year, which is wild, it's like 50% of UK female fashion spend, yet, nobody's tackled that bit head-on. And that's what we're trying to do. But the truth is that it's such a huge market and we need to grow so much quicker to be able to fulfil it.
I guess that's also where the platform ZOA comes into it then, to kind of allow you to open up that market?
So that is one hundred percent what happened. What we found was that if we wanted to truly disrupt the market, we could grow under our own brand Hirestreet, but just naturally that will take time to build. With ZOA what happens is we are working with massive retailers who already have customers, already have stock, and that basically takes rental from a small percentage of the market to being accessible to a far bigger range.
Well, finally, again in the spirit of COP26, what are your wishes for the future of the fashion industry?
I'm an economist, that's my background. And I just hate waste, I think the current way we consume is just so inefficient, and I think the fashion industry right now is so lacking in optimization. There's so much wastage, whether it's on the factory floor, at the consumption level, at the end-of-life level. So, we really need to stop prioritising simple consumption and actually take a step back and look at where value is currently being lost throughout the supply chain and address that now.