Rent the Runway this week did away with its subscription requirement for the purchase of secondhand items from its site.
Last year, the rental service began allowing subscribers only to purchase directly from its site; shoppers could also head to resale site ThredUp, which forged a partnership with Rent the Runway in September.
When the service launched subscriptions five years ago, members could buy items they'd rented and had in their possession. The further expansion comes as Bloomberg reports the company is consulting banks on a possible initial public offering. Rent the Runway didn't immediately return a request for comment on that report.
Limiting resale to subscribers may have seemed like a nice perk of Rent the Runway's service a few years ago. After all, locking consumers into recurring payments has proven to be fruitful for many e-commerce players, perhaps even more so during the pandemic.
At the moment, however, it seems unwise to limit opportunities in the rocketing secondhand apparel market.
Early concerns that fear of germs could undermine sales of used clothing during a pandemic quickly dissipated last year as growth continued apace. In fact, in a blog post, Rent the Runway Co-founder and CEO Jennifer Hyman noted that, in March last year, subscribers began buying used items at twice their usual rate, which she said demonstrated "an acceleration in consumer comfortability with and demand for shopping secondhand."
Apparel resale site ThredUp last year said it expects the market to reach $64 billion by 2024, with $28 billion coming from traditional thrift and donation and $36 billion coming from resale. It's a lucrative segment that is increasingly hard to ignore. This week, marketplace Etsy, after announcing plans to acquire resale site Depop for $1.6 billion, vaulted atop an elite pantheon of e-commerce players, above the likes of Apple and JD.com, according to a scorecard from analytics firm GlobalData.
While some environmentalists question just how sustainable secondhand clothing sales truly are, especially in e-commerce, Hyman and others make the pitch that they are an important aspect of the circular economy, something that resonates with Generation Z. Analysts increasingly see that as a challenge to fast fashion and a sign of a potential realignment in apparel retail.
Close to half (46.8%) of Gen Z consumers are influenced by how sustainable products are, compared to over a third of baby boomers, according to GlobalData's global first quarter consumer survey.
"While fast fashion has long been tainted by [environmental and social] concerns, it has not had much impact on sales," GlobalData U.K. Retail Research Director Patrick O'Brien said in emailed comments. "However, if the likes of [resale sites] Vinted and Depop continue to grow at the pace they have been — and a more reflective attitude to buying fashion becomes more widespread — then the structure of the retail market could be significantly altered over the next decade."
By opening its resale option to a wider audience, Rent the Runway, already a disruptor thanks to its core rental proposition, appears to be betting on this shift.