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NEW YORK — Rent the Runway is looking for a piece of the fast-fashion market — expanding beyond the confines of special occasion dressing with a new vertical and price model.
The almost five-year-old Web site, which has become the go-to online rental destination for customers seeking designer outfits for weddings, interviews, galas, dates and more, will today introduce an accessories category. More than 1,000 handbags, sunglasses, scarves, outerwear, hats and pieces of jewelry are unlimitedly available to members for a price of $75 per month. Offerings include contemporary and designer brands from Eddie Borgo and Pamela Love to Balenciaga and Oscar de la Renta.
This story first appeared in the July 17, 2014 issue of WWD. Subscribe Today.
After launching in November 2009 as a vehicle for customers to gain entrée into the world of designer brands on an occasion basis, cofounder and chief executive officer Jennifer Hyman wanted to focus on everyday style.
“We really wanted to attack Zara and H&M head on,” Hyman told WWD in an interview at the company’s headquarters here about the beta launch of Rent the Runway’s Unlimited business, which is part of what she calls Rent the Runway 2.0. “When there is a trend and you want to update, the mass-market customer will go to H&M or Zara and buy something disposable — [they] buy [this] like junk food.”
The monthly $75 subscription fee enables members to receive three items at a time — which they can keep for as long as they wish. Users have the option to rent accessories on an individual basis for the traditional four- or eight-day rental period as well.
The site has close to five million members with an average age of 29. Hyman and cofounder Jennifer Fleiss, who oversee a staff nearing 300, have received $54.4 million in funding to date from Highland Capital Partners, Bain Capital Ventures, Kleiner Perkins Caufield & Byers and WWD parent Condé Nast.
More than 90 percent of customers that Rent the Runway acquired last year were through word of mouth, and its user base has grown 126 percent year-over-year. Since February, the site has rented what would be the equivalent of $300 million in retail value of dresses and accessories. Hyman predicts that this number will reach about $600 million by the end of the year — not including the Unlimited business.
Hyman added that the brand has become a massive experiential marketing channel for the designer industry, with more than 90 percent of customers renting from brands that they’ve never owned before.
“It’s a new way to experience everyday style and trends and a new way to take what’s currently in your wardrobe and amp it up. It takes you out of fast fashion,” Hyman said. “This is about transforming and disrupting the way you get dressed — which on one hand is letting you make the choice of: ‘Should I rent this or should I buy this?’ and second, ‘How long should I rent this for?’”
A multiphase branding strategy to elevate the look and feel of the company is also being rolled out. Updated photography and editorial content can be seen on renttherunway.com, and even more changes — including a new logo and Web site, as well as luxe packaging — will launch during the fourth quarter.
According to Hyman, this is the first time Rent the Runway has ever used “everyday clothing” in its styling, and the photography now captures how members can upgrade their style day-to-day. Stylist and former Opening Ceremony buyer Kate Foley was tapped as a creative consultant to oversee production of all creative assets on the site, style shoots and develop trend stories.
Rent the Runway will also further its retail efforts, giving customers the option to buy any items they’ve rented on the site at a discounted rate via a Try to Buy service once the company officially relaunches in February. Currently, the site allocates inventory in a sale section.
The re-branding will touch every aspect of the brand from editorials on the site (the Unlimited business will publish new editorials every two weeks) to garment bags.
“A woman who is used to wearing fast fashion for her whole life suddenly puts on Carolina Herrera and suddenly she is like, ‘Oh my god.’ It’s this power in wearing the real thing,” Hyman said.
“This business is here to save designer fashion. [We have to] stop this addiction that we’ve had to disposable junk over the last 15 years.”