Why It's Time To Reconsider Rent The Runway
Before Rent the Runway launched in 2009, there was no clamor for the chance to rent and share clothes with strangers. Eschewing a trip to regular retailers to instead put money towards something you wouldn't actually keep was a behavior that consumers had to learn. But now, Rent the Runway's reviews have shifted. With more than 11 million community members, five standalone brick-and-mortar locations and a fresh $1 billion valuation, it’s fair to say that consumers have largely warmed up to the idea.
So much so in fact, that the shock factor of renting clothes is relatively non-existent today, with similar companies like Le Tote, Stitch Fix, Villageluxe, Armarium, and Urban Outfitter's forthcoming Nuuly popping up without anyone blinking an eye. But even as the space becomes increasingly crowded, Rent the Runway remains the category leader, projected to reach a revenue of $1.9 billion by the end of 2023 according to Allied Market Research.
In the 10 years since it's founding, the concept has also evolved — pivoting from a best kept secret for snagging a pricey one-wear wedding guest dress to a champion of emerging brands and a company shifting both consumer culture and the anatomy of closets across the country. According to Gabby Cohen, Rent the Runway’s SVP of Brand, Communications & Business Development, there wasn't just one driver behind the brand's success, but it was only a matter of time before the sharing economy made its way into fashion.
“There used to be a time when people would say, ‘I can’t imagine staying in someone else’s home,’ and now that’s the norm,” she tells TZR, nodding to Airbnb. “People are thinking about temporary ownership in a very different way. On a micro level, people are staying in cities far longer, so they have less storage space. There’s now this idea of, why would I own things that I’m only going to wear a few times a year versus rent something and use my space in a more creative way?”
The clothing rental service aims to let women rent high-fashion and trend-driven garments instead of buying them outright, and it allows its audience to engage in a handful of different ways. The original and most standard way to rent is RTR Reserve, where users can rent a piece for a one-off occasion and then send it back. In 2016, the service launched new membership plan RTR Unlimited (unlimited rentals of four items at a time for $159), and in 2017, RTR Update (four items per month for $89). In its most recent fiscal year, the brand’s subscription business grew a whopping 160 percent year over year, and according to Cohen, the Unlimited plan makes up over sixty percent of the total business today.
“We’re seeing RTR Unlimited continue to grow everyday. What’s so phenomenal about the plan is that you can use it for an evening gown or a pair of sweatpants. You can rent everything you’d need for an occasion as part of your unlimited,” Cohen shares. And she’s right; with over 600 brands and offerings that range from red carpet to your parents couch, the versatility of Unlimited is certainly appealing.
As social media continues to rise as a form of social currency, everyone — not just celebrities and influencers — is met with the pressure to maintain and curate their life and personal brand for all to see. When British credit card company Barclaycard surveyed more than 2,000 shoppers in 2018, results revealed that one in ten shoppers admit to buying clothes just to post on social media and then make a return. It's a clear indication that Rent the Runway's subscription services are an economically valid alternative to keeping up with such social pressure, and the roaring speed of the trend cycle. Having the option to curate a flexible and ever-changing wardrobe can help to quell the pressure to constantly spend on something new.
But for more than just aesthetics and likes, this circular concept of fashion allows women to embrace their bodies in states of change. "Between sizes, people are gaining weight, losing weight, postpartum. Every woman deserves to feel incredible every single day, and this is a great way to do that without breaking the bank or investing in things that you're not going to keep forever," says Cohen. Similarly, Rent the Runway has and is continuing to grow its maternity selection.
Another factor adding to its growth and reach has been the introduction of younger, indie brands to its roster, including fashion favorites like Rejina Pyo, Simon Miller, Sandy Liang, and inclusive leaders like Universal Standard. It’s an intentional effort to not only meet every potential consumer style profile, but broaden the scope of how the brand was initially perceived — a place for affluent, straight-sized women to expand their work wardrobe or find their next party dress. And while there's no need to fix what isn't broken, expanding offerings to include emerging designers and plus-size options is one strategy that's allowed Rent the Runway's memberships, and revenue, to grow.
The brand also sees on-boarding these younger, niche labels as a way to secure itself as a discovery platform for consumers. According to the Rent the Runway, members will discover at least 15 new brands within their first 90 days with the service. “We see ourselves as curators and want to curate incredible product that our consumer may not know about, and be a way for her to discover new designers that she loves," she adds. Unlike fashion e-commerce leaders like Net-a-Porter and Moda Operandi who have established themselves as discovery destinations for fashion enthusiasts around the globe, Rent the Runway is playing on a different field entirely.
Though there is surely overlap, the rental service's demographics differ and vary widely — from teenagers looking for a cost effective way to go to prom, to pregnant women who don't want to invest in maternity clothes they'll never wear again. Unlike those who frequent luxury retail sites, Rent the Runway members aren't necessarily keeping as close an eye on emerging designers or the fashion industry at large, but rather know what they like when they see it. This allows the brand and its buying team to closely follow emerging designers that are already gaining traction amongst the industry's trendsetters, and introduce them to an audience that might not have stumbled upon them — or paid full-price — otherwise.
As the brand continues to grow both its membership and message, the environmental benefit of the sharing economy is a key piece of RTR's message. “People want to consume less and want to understand what their impact is, so we’re certainly trying to create specific reports for our consumers so that we can share with them how they are personally making an impact,” Cohen says. “Fashion is an industry that has a huge impact on the environment. We do feel like we have a responsibility to do better and that is part of the appeal of Rent the Runway, that we are a shared service that is circular, and so we are certainly giving people an option to wear trend without having to buy in a way that feels wasteful.”
This pillar of the brand's identity is reflective of just how tuned in consumers are to their own economic impact, and why the secondhand industry has taken off over the last few years. Sites like The Real Real and designer handbag-focused Rebag in the luxe space, StockX and Grailed covering the sneaker and streetwear category, and apps like Depop and Poshmark have all emerged to fill niches within the resale market.
For a $1.7 trillion industry that pumps out more carbon dioxide than international flights and shipping combined, according to a 2017 Ellen MacArthur Foundation report, Rent the Runway’s focus on sustainability isn’t a marketing rollout — but it does happen to be what people want to hear more than ever right now.
Regardless of the means by which Rent the Runway continues to scale rapidly, the ends remain the same. In Rent the Runway’s perfect world, there’s less waste — both on a personal and economic level — but not less style, for everyone. And now with the challenge of shifting consumer behavior far past those early, trying stages, that perfect world might not be so far out of reach.
Below, check out some of Rent the Runway's exciting new arrivals.