With new $89 a month subscription, Rent the Runway takes aim at fast-fashion retail
Rent the Runway is expanding its “closet in the cloud” as it aims to eradicate the closet in your bedroom.
The designer clothing rental company announced on Monday a new $89 per month subscription tier more than one year after debuting its Unlimited plan in early 2016.
The new plan, RTR Update, which targets households making $75,000 and up, marks the company’s latest move in making its product accessible to the mass market, while edging toward its “nirvana vision” of eliminating the need for “archaic” closets as we know them.
“It makes no sense that we live in a world today that we have to buy hundreds of things keep them in a closet and never use them. A closet is just a storage facility,” Rent the Runway CEO Jennifer Hyman told AOL Finance. “We think that closets are going to be a relic of the past just like landlines and DVDs and CDs, so in this world, we want to make a subscription to fashion accessible to tens of millions of more people.”
For $89 a month, subscribers have access to four pieces that they can hold onto for a month, which Rent the Runway believes is price competitive with the likes of Walmart, Target, Amazon and H&M at $22.50 per piece per month.
The Unlimited plan, which by contrast allows users to swap their monthly items as many times as desired, was also refreshed on Monday with an increase from three to four items per month and a new $159 monthly fee. Existing users will be “grandmothered” into the original $139 price forever.
It’s no matter that women have to return their clothes each month, Hyman claims, as “that’s how women actually are using their closets anyway.” Only 20 percent of the closet is used regularly, according to the Wall Street Journal.
“What we’re trying to do with our subscription is make renting more and more frictionless as time goes on and make it a bigger part of how you get dressed,” Hyman said.
Already, scores of women are buying into the rental thesis. Rent the Runway has seen 125 percent year-over-year growth in users, with many reporting wearing eight to 15 rented outfits per month. Subscribers are also seen renting bold styles, like bright colors, prints and trendy, seasonal items, which differs from the “basics” typically seen sold in stores.
The perception that Rent the Runway is primarily a prom or cocktail dress rental service was shattered by the launch of the company's first subscription plan in 2016, which showed that subscribers -- 90 percent of whom are working professionals -- are using the program to get dressed for work. With RTR Update, Hyman expects to see another shift in consumer behavior, with users holding onto seasonal, utility-oriented items, like handbags, jewelry or a chic leather jacket, for the duration of the month.
Hyman, who had a baby earlier this year, relied heavily on RTR Unlimited during her pregnancy; she only purchased two pairs of maternity jeans and rented the rest of her wardrobe, knowing that she wasn't investing in clothing that she "certainly was never going to wear again."
“From a very rational standpoint -- beyond the fact that this is the enabling you to have access to your dream closet -- for me, nothing in my real-life closet really fits me, so I actually need it,” she said.