9. PRODUCTS FOR CHILDREN

Two main product groups are defined in this cateogry: children’s clothing (including maternity wear) and toys and equipment (for children, maternity, and nursing). Companies in the Nordic market often provide products across these subcategories, even when initially specialising in one area. For instance, a company may start by offering toys but later expand to include items like breast pumps, weighted blankets, or clothing.

Examples in the category include Danish companies DearBaby, Baby BoogieWoogie, and Babysam; Icelandic companies Barnalán and Móðurást; Norwegian company SmallTrolls; and Swedish company Parently, all of which offer rentals of toys and equipment through leasing or subscription models. In contrast, children’s clothing is often offered as a standalone category, as seen with Swedish company Hyber’s subscription service and Norwegian company Bergans’ snowsuit rental within its sales model.

As a result, children’s clothing is presented separately here, based solely on existing literature, while the subcategories of toys, equipment, and maternity & nursing are analysed using literature and empirical data from pilot studies.

Renting children’s clothing through PSS solutions has been steadily gaining traction in the Nordic region, where companies have offered use-oriented PSS models for over a decade. Subscription-based services, in particular, provide parents with convenient access to appropriately sized clothing as their children grow, addressing both practicality and sustainability by significantly reducing the need for frequent purchases.

Even though there are several positive aspects to sharing used children's garments, implementing a subscription model for children's clothing can present significant challenges. This is explored in a study of the former Danish children's clothing rental company, Vigga (Petersen & Riisberg, 2017) . One key challenge identified was the normative understanding of gendered clothing – for instance, blue for boys and pink for girls. Since the clothes were supplied in pre-assembled age-specific sets of various colours, and customers did not have full visibility of the products before renting, additional logistics were needed to meet customer preferences.

The study also highlights the strong emotional bonds some consumers formed with their children’s clothing, which posed an additional challenge to product circulation (Petersen & Riisberg, 2017). A leasing system like Vigga depends on consumers not forming lasting emotional attachments to the garments, which could hinder reuse. To address this, Vigga redirected emotional attachment towards the community of subscribers, fostering a sense of participation in a collective movement for sustainability. By promoting the idea of shared responsibility for the planet and providing an ongoing flow of new garments, the company aimed to reduce personal attachment to individual items while reinforcing the environmental and social benefits of their rental model.

Another study, also focusing on Vigga, explores the key factors influencing the environmental impact of its rental subscription model (Kjaer et al., 2019). The findings highlight that a significant portion of the environmental benefits depend on how consumers handle and care for rented children's clothing. Proper care can greatly extend the lifespan of the garments, which is essential for reducing their environmental footprint. To support this, Vigga partnered with Novozymes, a producer of industrial enzymes for detergents, to implement a cold-wash system that gently cleans the garments. However, this approach was challenged by customers' harsher washing practices during the rental period. In response, Vigga introduced care guides with recommended cleaning methods to help consumers maintain garment quality and extend their life. These efforts also included communication about the importance of responsible consumer behaviour in minimising environmental impact by reducing the need for frequent replacements (Kjaer et al., 2019). This initiative thereby aimed to encourage sustainable consumer behaviour and eventually contributed to extending the product’s longevity.

Several studies highlight the potential for rebound effects in subscription-based models of children’s products (Kjaer et al., 2019; Mont et al., 2006; Petersen & Riisberg, 2017). While renting children’s clothing can offer environmental benefits, it may unintentionally lead to shifts in consumer behaviour that offset these gains. For instance, when parents save storage space by renting rather than buying, they might fill that space with other items, undermining the positive environmental effects of the rental model. Additionally, the financial savings from renting may encourage increased consumption in other areas. This rebound effect (further studied in section 15.2) has been observed across various studies on children’s products like prams and toys as well, where consumers perceive rental as a sustainable action, potentially justifying additional purchases elsewhere (Mont et al., 2006). One way to overcome this barrier is to encourage more sustainable consumption patterns by educating consumers about the environmental benefits of such models and fostering a community around sustainable practices (Petersen & Riisberg, 2017).

The Nordic market for children’s and maternity products and equipment increasingly embraces circular business models, focusing on their sustainability and resource efficiency aspects. The businesses are particularly within use-oriented PSS and provide similar services like single rent solutions, monthly subscriptions and membership deals. Besides that, the services include logistics, cleaning, maintenance, repair and refurbishment of a wide range of products like entertainment blankets, books, strollers, auto seats, bikes, beds, gravity blankets, etc., emphasising convenience and product variation. These services meet the practical needs of growing children and resonate with environmentally conscious parents by extending the lifespan of high-quality toys and reducing waste.

Although some businesses still primarily operate within a traditional sales framework, some also offer rental options for specific items like breast pumps and baby scales. This shift toward offering rental services, even within conventional business models, signifies a growing recognition of the benefits of PSS and perhaps an industry-wide move toward more sustainable practices.

In contrast, the companies involved in the pilot phase of this project, DearBaby (DearBaby, 2023) and Barnalán, were founded specifically with the motivation to offer a sustainable, circular alternative to the widespread use-and-dispose culture. This vision is deeply influenced by their founders’ own experiences as parents. Committed to selecting durable products that ensure longer lifespans, these companies aim to help parents choose the right products at the right time, fostering more mindful and environmentally conscious consumption.

Logistics play a central role in the sustainability efforts of both cases, as efficient transport and handling are essential to their rental models. Close collaboration with logistics partners is critical due to the substantial transportation required for delivering and returning products, and these partnerships are key to ensuring smooth operations. Both companies maintain strong ties with their logistics providers, allowing them to meet high expectations for reliability, sustainability, and efficiency.

Beyond transport, cleaning, maintenance, and repair between rental periods also rely on close partnerships with external providers. The Swedish company Parently operates similarly to a retailer but has implemented a revenue-sharing model that allows manufacturers to retain ownership of certain products. This approach streamlines the maintenance cycle, ensuring products remain in top condition while strengthening relationships between brands and customers, ultimately enhancing service quality and customer loyalty.

The key drivers for adopting PSS in the children’s products sector include sustainability, economic efficiency, and consumer convenience. A major factor is the short lifespan of children’s products, as their needs for toys, clothing, and equipment change frequently. PSS models address this by extending product life through rental and shared use, maximising item usage before they are outgrown.

Consumer convenience plays a vital role. Renting allows parents to try out items without the financial commitment of purchasing, offering flexibility and preventing homes from becoming cluttered with quickly outgrown products. According to our case studies, flexibility and convenience are identified as some of the primary drivers for customers choosing a PSS solution. Here, the convenience aspects of trying out a product without paying for its total ownership and receiving a carefully expert-selected box of age-specific toys, including prepaid return shipment, is perceived as DearBabys customer’s primary motivation for choosing their solution. DearBaby states that the environmental benefit of their model is more of a positive add-on than it is their primary reason for choosing renting toys.

However, while these factors encourage the adoption of PSS, significant barriers remain that complicate the business model’s viability, particularly for start-ups. As with many PSS models, one of the major barriers to launching a PSS business is the significant initial investment needed to acquire inventory and build a sustainable business model. Companies must maintain a large stock of products, which presents a substantial financial challenge. This was evident in the pilot cases of this project, where DearBaby had to expand its inventory gradually, in line with cash flow, and highlighted the crucial role of funding from the Danish government and private innovation programs – without which the company would not have survived. Our study reveals that many PSS companies in this product category went bankrupt or closed down within the first years, highlighting the complex financial challenges of this type of business model.

In addition to financial hurdles, technology plays a key role in the success of PSS companies. Efficient IT systems are essential for managing subscription-based models, and both Barnalán and DearBaby have experienced difficulties in this area. Barnalán, for instance, relied on manual inventory management, which proved inefficient, time-consuming, and prone to errors. DearBaby, by contrast, secured funding to develop an IT system tailored to its business model and product range – a critical step in its survival. It is likely that Barnalán’s lack of a suitable IT system significantly contributed to their decision to close, as this was cited as a major operational challenge.

A common PSS adaptation challenge that DearBaby also confirms is shifting consumer mindsets towards rental or subscription-based models. In particular, DearBaby highlights the challenges of the cultural understanding of ownership where Christmas can be understood as a barrier as many customers wants to give physical products to their loved ones. To overcome this, DearBaby introduced their webshop featuring pre-loved items, which has proven to be an effective way to address this barrier and meet customer expectations.

Another cultural issue, particularly prevailing in this product group, is customers' emotional attachment to rented children’s products. A study on a children’s clothing rental service revealed that customers formed sentimental connections to the products, as it reminded them of their children’s growth and milestones (Petersen & Riisberg, 2017). In our case study of DearBaby, this behaviour was confirmed, as it was explained that the company had experienced customers who wanted to buy selected pieces of toys after the renting period. Therefore, DearBaby provides its customers with this opportunity, which is perceived as a beneficial arrangement for both the company and its customers. While this solution enhances customer satisfaction, it can also be viewed as a barrier, as it potentially undermines the circular purpose of PSS solutions by encouraging product retention rather than continuous reuse.

One of the primary environmental gains from PSS models is the reduced demand for new product manufacturing as products are systematically distributed and circulated among several users instead of only benefitting one child or family. Studies show that products like strollers, prams and bikes are often discarded after a brief period due to the rapid growth of children and changing needs, thereby presenting inefficiencies associated with short product lifespans (Kerdlap et al., 2021a).

PSS models, such as those employed by Barnalán and DearBaby, extend the usage of these products by renting them to multiple users. This sharing model diminishes the need for new products to be produced, thereby conserving raw materials and reducing emissions associated with manufacturing. For instance, a study conducted in Singapore revealed that renting prams led to 29–46% lower lifecycle environmental impacts than purchasing and discarding after the initial period of use (Kerdlap et al., 2021a). The study further showed that the most impactful scenario involved parents using a pram for three years and then passing it on to others for another three years, leading to a 50 % reduction in environmental impacts. This scenario has the most significant environmental potential, as renting out the product involves frequent heavy cleaning and transport for maintenance and between customers. Therefore, it becomes crucial for rental companies, especially those offering baby prams, to manage and limit heavy cleaning.

Extending the lifespan of children's products is another significant environmental benefit of PSS. By maintaining, repairing, and refurbishing products, PSS companies ensure that items remain in good condition for longer, increasing their overall usable lifespan (Lee et al., 2023). DearBaby also contributes to improving the environmental performance of their products during the usage phase by guiding proper use and cleaning of their products to their customers while in use. For example, detailed care instructions are given on the webpage and sent via e-mail when renting a product to ensure that the products are handled correctly, such as cleaning with a damp cloth without chemicals. This aims to optimise product longevity and functionality.

Finally, PSS models contribute to reduced waste generation by extending product lifespan and ensuring continued use, thereby minimising waste generated from discarded items. Our case studies show that products go through several stages before being sent for recycling, where both Barnalán and DearBaby clean and maintain products after each rental and have a marketplace where products that no longer meet rental standards can be purchased at a reduced price. Finally, both cases state that they strive to minimise waste as much as possible by donating products for reuse if they can no longer be rented or sold. Companies that rent out children's equipment, such as Parently, go further by replacing broken parts that can be swapped out. They also encourage manufacturers to adopt modular design in the development phase, ensuring that products have the longest possible lifespan. This approach minimises waste, for example, by allowing a highchair to be repaired if a buckle breaks rather than being discarded. Ultimately, this strategy could potentially help reduce the need for new production (Kerdlap et al., 2021a).

PSS for children's products offer different socioeconomic and other benefits, making them a compelling choice for consumers and businesses. By transforming the traditional product ownership model, PSS not only makes high-quality children's items more accessible and affordable but also promotes sustainable consumption and supports the development of a circular economy (Petersen & Riisberg, 2017).

One of its primary advantages is its significant cost savings, allowing parents to rent or subscribe to products without incurring the high upfront costs of purchasing. This approach is particularly beneficial for families with limited budgets or those seeking to allocate financial resources more efficiently. By lowering financial barriers, PSS models make products more accessible, ensuring that more families can afford the necessary tools for their children's development. This democratisation of access helps level the playing field, allowing all children to benefit from products that support their growth and learning, as demonstrated by cases like DearBaby and Barnalán, where families can use products only as long as needed, avoiding the financial burden of frequent replacements. At the same time, this circumstance allows parents to spoil their children without encouraging overconsumption, which DearBaby explains was one of the main motivations for founding the company.

Convenience and flexibility are key advantages of PSS models within children’s products. With the option to rent or subscribe to products, parents can easily adjust to their children's changing needs without the hassle of buying, storing, or disposing of items. Parents can return or exchange products as children move through different developmental stages, ensuring they always have the appropriate items. This adaptability allows families to respond quickly to changing needs and preferences, making parenting easier and more manageable. The increased flexibility also makes it easier to live in smaller spaces, as there is no need to store products that are no longer needed or were mistaken purchases. This aspect can positively impact living arrangements, potentially delaying the need for a larger home and ultimately having a greater environmental footprint (Viegand Maagøe, 2023).

The Nordic children's product market is particularly well-suited for PSS solutions due to the rapid changes in children's needs and the short lifespan of products like toys, strollers, and clothing. Insights from companies like DearBaby and Barnalán illustrate the clear benefits of PSS, including reduced waste, extended product lifecycles, and increased convenience for parents. These rental and subscription services allow access to age-specific products, helping families avoid unnecessary purchases and clutter.

However, significant challenges remain. High initial costs for building and maintaining inventory are barriers, particularly for start-ups. Additionally, cultural preferences for ownership, especially when parents form emotional attachments to children's products, complicate the adoption of PSS. This issue can be addressed by fostering a sense of community around sustainability, encouraging customers to shift their emotional attachment from individual products to shared environmental responsibility.

Logistics, maintenance, and IT infrastructure are crucial for the success of PSS models. Efficient systems must manage product rotation seamlessly, while robust procedures for maintaining product quality through repair and refurbishment are essential. Additionally, manufacturers need to design products that are easy to repair and circulate multiple times, ensuring they can withstand the demands of repeated use. Addressing these factors is key to unlocking the full potential of PSS models. Despite these challenges, PSS offers a powerful opportunity to encourage more sustainable consumption patterns, particularly as younger generations increasingly embrace circular economy models.