A new lease on life
Rent the Runway wants to replace your everyday wardrobe with its $89 monthly plan
Rent the Runway began eight years ago as a rental service for formal gowns, cocktail dresses and bejeweled accessories.
Now the company is doubling down on its efforts to appeal to more women, more often.
The New York-based service is expanding its subscription program for everyday items, including pants, jackets and sweaters, with a new option that allows customers to rent four items each month for a flat rate of $89. A service the company began last year offers up to four items at a time, with no monthly limit, for $159 per month.
The idea, Chief Executive Jennifer Hyman said, is to help women pare down their wardrobes. Instead of buying new items each season, they can rent them — and then ship them back when they’re done.
“There is so much waste when it comes to the closet — most women don’t use 80 or 85 percent of what they have,” she said in an interview. “What we offer is newness and variety.”
Experts say the constant chronicling of our lives on social media, combined with the willingness to share the most personal of items, including cars and homes, has made it more palatable for people to borrow the clothes they wear. Services such as Airbnb, Lyft and Uber have gained ground in recent years, causing traditional companies to rethink their business models, too. Discount shoe purveyor DSW is considering adding shoerental services at its stores, while Nordstrom has begun testing tuxedo rentals aimed at younger shoppers.
“Social media has created an atmosphere in which, yeah, you could wear the same thing twice, but you’d rather not if you can avoid it,” said Rachel Saunders, strategy director at research firm Cassandra. “So how do you do that without spending a fortune? It’s all contributed to this idea that it’s OK to share clothes with strangers.”
Although the percentage of people who rent clothing is still small, about 6 percent, according to data from market research firm Forrester, some say there is potential for growth, particularly among younger consumers living in urban areas. Data from Cassandra show that 62 percent of millennials and 57 percent of teenagers wish brands offered more ways to rent or borrow items.
But some said there could be challenges in persuading shoppers to rent not just pieces for one-time wear, but also commonplace staples for a monthly fee.
“Everyday wear is already so affordable,” said Sucharita Mulpuru, a retail analyst for Forrester. “Are people really going to pay to rent it? It might appeal to a certain population, but overall I think it’s going to be a tough sell.”
The average Rent the Runway user is 33 years old, and 90 percent of them are working professionals clustered in large cities.
And there is room to grow, the New York company said. Its inventory has doubled year over year to about 450,000 pieces, Hyman said, and traffic to its stores is up 120 percent this year. Rent the Runway, valued at nearly $1 billion, had $100 million in sales last year.
‘I’m renting this’
And as more women sign up for the service, they’re starting to use it in new ways, Hyman says. Over the summer, she began to notice that customers were increasingly stopping by Rent the Runway stores on their way to work, to pick out new outfits for that day. Many of those women said they were using the rental service to help them get dressed 10 or 15 days each month, she said.
Rachel Jo Silver is one of those women. Since becoming a Rent the Runway subscriber last year, the New Yorker says she has gotten rid of 90 percent of her wardrobe and curtailed clothing-related spending by about 70 percent. The only items she can remember buying over the past year, she says, are two dresses from Zara and a pair of jeans from ShopBop.
“Sometimes my friends will come over and be like, ‘What? Where are all your clothes?,’” said Silver, founder of Love Stories TV, a website for sharing and viewing wedding videos. “And I’ll tell them, ‘I don’t buy anything anymore.’ It’s great. My closet is so clean.”
Instead, she pays $139 a month to rent three items at a time. Her current lineup: A leather jacket by Vince (which retails for $1,050), an Elizabeth and James tote bag ($545) and striped trousers by Solace London ($600).
Sometimes, she says, she likes an item so much that she considers buying it (Rent the Runway offers discounts on previously borrowed clothing). But she has yet to make the leap.
“Buying a $1,000 bag — what’s cool about that?” she said. “It just means you have a lot of money. It’s much more interesting to say, ‘I’m renting this.’”