Rent the Runway and the Future of Retail
Rent the Runway continues to challenge the need of brick-and-mortar retail stores by providing a compelling and accessible online platform to rent high-end women’s fashion for work, evening, and any event in between.
Rent the Runway makes couture accessible through a subscription model and single-item rentals. The platform promises to solve the problem of what to wear to work, for everyone from interns to C-suite execs. It has ultimately freed up the time women use to select outfits, which can equate to a more level and equitable playing field. Originally, the platform was conceived as a solution for women who didn’t want to invest in event-wear that they might only use just once; however, since starting in 2009, the majority of the platform’s revenue comes from the 50,000 members who are active “unlimited” subscribers.
How It Works (Unlimited Subscription).
- For $159/month, members obtain an “unlimited” subscription in which they can rent up to four items at a time and keep the items for as long as they want.
- Members can choose items by browsing an online “store” of garments through the Rent the Runway app.
- When up to 4 items are “Added to Bag” through the app they can be directly shipped to members with return labels included.
- Each subscription includes the cost of item insurance, dry cleaning, and shipping.
- Once a member is done with a garment and it is shipped back, members can select another item to have shipped to them.
- Alternatively, a member can also buy the item they are renting. Generally, members can buy items for about 50% of the retail price.
- Members can publicly rate the item based on sizing, look, price, and even the number of compliments received while wearing.
How It Works (One-Time Rental).
- Priced relative to the cost of its retail value, items can be rented for a period of either 4 days or 8 days
- Renters can select their size and include the rental of an additional “backup size” of the garment at no additional cost
- Items are directly shipped to customers with return labels included.
- Each rental includes the cost of item insurance, dry cleaning, and shipping.
- Customers can also buy the item they are renting. Generally, members can buy items for about 50% of the retail price.
- Renters can publicly rate the item based on sizing, look, price, and even the number of compliments received while wearing.
Changing the Field.
Rent the Runway’s success can be attributed to how it addresses the typical pain points of working women: space, money, and impact. Its value rests in the platforms ability to make high-end fashion accessible to an audience that did not the need or space to own garments they would wear only once. Allowing users the ability to rent different pieces for a fraction of the price can, for instance, feed the desire to shop with the need to dress for very specific moments in life such as weddings, conferences, and work events which all might require their own unique, rarefied dress code. Filling this need has not only freed up time, but also negated the need to frequent brick-and-mortar retail stores. Why spend time shopping piece-for-piece when you can scroll through an app and easily select items for a specific event, meeting, or social gathering?
As it continues to expand, Rent the Runway faces the challenge of committing to a more refined business model. Since the success of its “unlimited” subscription has generated the majority of company revenue, the platform needs to decide if it should continue exclusively with this model or retain the item-by-item rental with which it initially started. Additionally, the platform is currently dependent on the shipping efficiency of third-party post services, such as UPS, which can sometimes delay shipments of garments. Additionally, Rent the Runway collects thousands of data points weekly from customer reviews of garments, which it can add to its algorithms to make “shopping” for items more efficient and more customized.
Student comments on Rent the Runway and the Future of Retail
As a Rent the Runway user I can say they have a great service! They truly want to make sure their clients find the perfect outfit for each occasion. There is a lot of similar in the market but I feel they truly differentiate themselves by excelling in service quality.