Rent the Runway rolls out cheaper subscription service
Rent the Runway on Monday announced a new membership tier for $89 per month, where four pieces are delivered each a month from more than 200 top brands, including Tory Burch, DVF, Milly, Opening Ceremony and The Kooples. The company also unveiled its first national brand campaign, with 15- and 30-second TV spots airing now and subway ads in New York City illustrated by Instagram-famous artist Julie Houts displaying later this month.
The company has also tweaked its $159 per month "RTR Unlimited" subscription, too, bumping the cost by $20 (though current members get to keep their $139 monthly rate for life), according to a press release emailed to Retail Dive. Those members can now rent four items (instead of three) from more than 500 designer brands, including Marni, Proenza Schouler, Tanya Taylor, Carven, Derek Lam and Loeffler Randall.
Both memberships include free shipping and dry-cleaning, 25% off "RTR Reserve" rentals and the ability to pause or cancel anytime. Rent the Runway’s subscription business is up 125% year-over-year and is projected to triple in 2018, co-founder/CEO Jennifer Hyman said in a statement emailed to Retail Dive.
While e-commerce, a direct descendent of the old catalog days, is a couple of decades old, Rent the Runway is playing in particularly disruptive areas of retail — subscriptions and rentals — and that complicates its operations. The tweaks to its subscriptions and the unveiling of its first-ever national brand campaign indicate that the company is still working on customer acquisitions and retention. The new subscription offer is aimed at women whose incomes precluded signing up for the Unlimited rate.
"From the beginning, we knew that the cost of an Unlimited subscription wouldn’t be a realistic expense for all women," Hyman said in a LinkedIn blog post Monday. "But we did want to make Rent the Runway and the dream closet we offer accessible to women everywhere. This is why I am proud to announce RTR Update, our latest membership program that makes the Closetless Future accessible to more women than ever before."
A year after shaking up its compensation structure after losing a few key executives, Rent the Runway appears to be focusing on business and moving beyond relying on buzz, saying in an email that its growth so far has been "largely organic," with most customers hearing about the brand through word of mouth.
Now, according to Hyman, 68% of those subscribed to its original level report buying less clothing than they did before. “We’ve made clothing rental a utility in women’s lives, and I’m thrilled to be bringing the closet in the cloud to millions more women with 'RTR Update.'"
Those top-tier members are also frequenting the company’s few brick-and-mortar locations — the company has noted a 120% increase in services in-store, including pick-up, drop-off and new item selection among those subscribers.
As Rent the Runway evolves, it’s also testing the limits of its own revolutionary premise — that people will begin to think of their wardrobes as existing "in the cloud," making it virtually infinite. It’s a step beyond the original concept of renting special occasion dresses and shoes—the Cinderella approach — to renting casual wear and office wear on a routine basis. It’s a concept still very new for most people, but Hyman says it’s gaining traction.
It’s a direct challenge to fast fashion, which relies on ownership on the cheap and a closet’s high turnover. Another selling point, related to that turnover, is the notion that renting clothes is kinder to the planet, although the back-and-forth shipping and constant dry cleaning (owned clothes are likely laundered less often) may make that difficult to defend to any great extent.
- Rent the Runway co-founder/CEO Jennifer Hyman The Closetless Future
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