Reimagining Charity Retail: Lessons from Developing a Circular Clothing Rental Model

As the drive towards more sustainable and responsible business intensifies, circular economy approaches are gaining increasing attention across the PRME community. Charity retail, long associated with reuse and social value, now faces new pressures that demand innovative responses.

In this blog, Olga Cieslak, Dr Kat Duffy and Professor Deirdre Shaw share insights from an ESRC-funded collaborative project exploring a circular clothing rental model within charity retail.

Their work highlights how partnerships between researchers, practitioners and consumers can support more sustainable, value-driven approaches to management in practice.

This blog forms part of our overall PRME UK & Ireland Blog Series and our PRME Knowledge Exchange Hub. 

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Introduction

Authors: Olga Cieslak, Dr Kat Duffy and Professor Deirdre Shaw

As businesses and policymakers grapple with the environmental consequences of overconsumption, circular economy approaches are increasingly viewed as a pathway towards more sustainable systems. Charity retailers have long played an important role in extending the life of products through donation and resale, reducing waste while generating income for social causes. However, changing consumer behaviours, growing volumes of low-quality clothing, and mounting sustainability challenges are placing renewed pressures on the sector.

This collaborative ESRC-funded PhD research explores the development and implementation of an innovative clothing rental model within charity retail. Working alongside charity practitioners, industry experts, and consumers, the project examined how circular business models can create environmental, social, and economic value while navigating the realities of day-to-day operations.

The research offers important insights for organisations seeking to embed sustainability into their business models and demonstrates the value of collaborative research in supporting responsible management practice.

 

Why charity retail matters in the circular economy

The clothing industry remains one of the clearest examples of the tension between sustainability ambitions and business models that depend on continued consumption. Whilst there is increasing attention on circularity, global clothing production and consumption continue to rise. Charity retailers sit at the centre of this challenge. Every year, millions of garments are donated to charity shops, positioning the sector as a key contributor to reuse and waste reduction. However, the landscape is changing. Donations are increasingly dominated by low-value fast fashion items, many of which are difficult to resell. At the same time, digital resale platforms have made it easier for consumers to sell higher-quality garments directly, reducing the availability of valuable stock for charity retailers. These shifts create both operational and strategic challenges. While society increasingly looks to charities to support sustainable consumption, many charity organisations face growing resource pressures, declining retail income, and rising costs associated with managing unsold goods. The question thus, becomes: how can charity retail continue to deliver social value while adapting to emerging sustainability challenges?

 

Exploring a new circular business model

To address these concerns, this research examines the experience of transitioning to a charity clothing rental business from the perspective of the charity, experts and consumers. Employing a multi-method qualitative approach, data was collected over a two-year period between 2022−2024. Semi-structured interviews with 23 consumers explored their role as donors to the clothing rental model during 2022 and again with 16 as potential renters in 2024 once the rental platform had been built. Thirteen semi structured interviews were conducted with charity staff and experts from the collaborating business and those employed in supporting positions to manage the development of the rental business.

The charity partnered with a specialist clothing rental provider responsible for garment care, cleaning, repairs, and logistics. This collaboration ensured professional standards while allowing the charity to focus on its core mission. Sharing the stories behind donated garments also helped create emotional connections between users and products, challenging perceptions of second-hand fashion and increasing engagement with circular consumption.

Most importantly, the model demonstrated how charities can shift from viewing donations as one-time transactions to recognising them as long-term assets capable of generating ongoing social, environmental, and financial value.

 

Practical Implications & Key Lessons for Responsible Management

Several important lessons emerged from the research

Circularity requires a shift from volume to value:

Traditional retail models often focus on increasing sales volume. In contrast, circular business models seek to maximise the value created from existing resources. The rental model encouraged both consumers and the charity to rethink ownership, consumption, and value creation.

Trust and transparency are key:

Consumers want confidence that donated items are being used responsibly. Clear communication about garment journeys, visible processes, and transparency around environmental impact played a crucial role in encouraging both donations and rentals.

Collaboration supports innovation:

The project highlighted the importance of partnerships in developing sustainable business models. Collaborations between charities, rental specialists, researchers, and consumers created opportunities for learning, experimentation, and knowledge sharing that would have been difficult to achieve independently.

Consumers adopt multiple roles:

Participants were not simply customers. Many acted simultaneously as donors, renters, advocates, and supporters of the charity's mission. Recognising these interconnected roles helped strengthen engagement and reinforced circular behaviours.

Sustainability innovation requires resource:

While circular business models offer significant opportunities, implementation is not straightforward. Funding constraints, staffing pressures, volunteer recruitment challenges, and competing organisational priorities can limit innovation. Successful transitions require long-term commitment, investment, and organisational support.

Conclusion and reflections on the collaborative research

One of the most valuable aspects of this project was the opportunity to study sustainability in action. Rather than examining circular business models from a distance, the research followed the development of a real-world initiative as it evolved. This provided insight into the practical realities of implementing sustainability strategies, including the trade-offs, competing priorities, and organisational tensions that are often absent from theoretical discussions. The research also demonstrated the value of collaborative research in generating meaningful impact. Working closely with practitioners created opportunities for mutual learning and allowed academic knowledge to be explored, challenged, and refined through practice.

A central learning was that circularity is about far more than reducing waste in practice. It requires organisations to rethink relationships between people, products, and ongoing value creation. For responsible management educators and practitioners, this illuminates the importance of developing future leaders who can navigate complexity, build partnerships, and balance environmental, social, and economic objectives.

Looking to the future

Charity retailers are uniquely positioned to contribute to a more circular and sustainable economy. Their existing role in extending product lifecycles aligns closely with circular economy principles, however, significant barriers remain to fully realising this potential.

This research suggests that innovative models such as clothing rental can help charities generate new forms of value while supporting more sustainable consumption practices. In practice achieving meaningful change requires more than innovative ideas. It demands leadership, collaboration, organisational learning, and the willingness to challenge traditional assumptions about growth, ownership, and consumption.

For researchers, policymakers, and practitioners, the experience highlights that sustainability transitions are rarely linear. They involve iterative experimentation, adaptation, and continuous learning. Within these challenges also lie opportunities to create more resilient, responsible, and impactful organisations.

For further information on the ongoing project

Shaw, Deirdre , Cieslak, Olga and Duffy, Katherine (2025). A Worthwhile Wardrobe: Bringing Rental to Charity Retail. Project Report. Adam Smith Business School, University of Glasgow.