Rent the Runway and WeWork, two “disruptors” changing how people outfit themselves and how they work, respectively, have formed a partnership.
Rent the Runway has installed drop-off boxes for returning rented clothes at 15 WeWork locations in six cities: New York, San Francisco, Los Angeles, Chicago, Washington, D.C., and Miami. Rent the Runway members can find the drop-off boxes in WeWork locations through a “drop-off finder” feature within the RTR app.
In addition, pop-up versions of Rent the Runway’s “dream closet” stores will open over the next six weeks at the same locations where the drop-off boxes are placed. The pop-ups will range from 1,000 to 3,000 square feet and will be situated in the common areas of the WeWork facilities, including the 18th Street headquarters in Manhattan and in the DUMBO section of Brooklyn.
“In our own ways, Rent the Runway and WeWork are both disruptive and transformative,” Maureen Sullivan, chief operating officer of Rent the Runway, told WWD. “It’s a great alignment.”
With WeWork innovating how and where people work, and Rent the Runway “on a mission to define the future of getting dressed…the partnership makes sense and goes hand-in-hand,” said Artie Minson, president and chief financial officer of WeWork.
For WeWork, Rent the Runway’s offering represents another amenity being provided to tenants, referred to as “members.” WeWork’s shared work space facilities have kitchens, coffee stops, meeting rooms, lounges and a community atmosphere. In another service to its members, WeWork is rolling out a retail format at its locations, called WeMrkt, selling food, healthy snacks, office supplies, flowers, phone chargers, even a smattering of apparel. Members can shop WeMrkt, and in many cases, they supply WeMrkts with their products, furthering the community spirit and supporting tenants’ businesses.
The partnership with WeWork makes it more convenient for those renting clothes from Rent the Runway to return the fashions selected from its web site or stores. The partnership will also save RTR some costs that would have otherwise been incurred from using a carrier for returns.
It’s a marketing strategy as well. RTR foresees getting more users through the exposure at WeWork, which says it has more than 268,000 members at its 287 locations in 77 cities in 23 countries. According to Sullivan, 90 percent of Rent the Runway subscribers are working women. It’s possible that Rent the Runway sees a lift in workwear rentals, but Sullivan suggested the company is well prepared, having grown RTR’s assortment of workwear by 250 percent for fall.
The company could also see a lift in casual clothing rentals, such as denim, among the more popular categories at RTR, given that WeWork facilities are predominantly populated by younger workers often engaged in start-ups and technology. It’s generally not a suit and tie crowd. WeWork says its members are typically creators including entrepreneurs, freelancers, artists, small businesses and even divisions of large corporations.
To support the partnership, RTR has launched an editorial campaign featuring several WeWork members, including Olivia June Clement, founder and chief executive officer of Vina; Lindsey Frischer, director of business development for Lesbians Who Tech; Cassandra Wesch, founder and ceo of Upward Commerce, and Amanda Villarosa, a freelance photographer.
“Coming together enables Rent the Runway to offer its self-service capabilities to members outside of its current five-store footprint,” Minson said. “WeWork’s national footprint accelerates the growth and scale for this partnership.”
The Rent the Runway drop-off boxes are situated in the lobbies of the WeWork buildings so anyone can have access to them, WeWork members or not. The boxes are unmanned but have iPads with built-in scanners so the bar codes on the garments can be read. Rent the Runway members just brush the garment’s bar code against the scanner and plop the garment in the box. The drop-off boxes were designed to secure the items until they’re picked up by the Rent the Runway fulfillment team. “It’s super important to make sure this is a seamless and quick return process,” Sullivan said.
The technology for the drop-off returns was developed about a year a half ago so Rent the Runway could enable its members to return merchandise at its five stores. Drop-offs represent 60 percent of all in-store transactions, the company said.
Rent the Runway did experiment with a store inside the Neiman Marcus on Union Square in San Francisco. The collaboration didn’t work out. A month ago, Rent the Runway opened a store on Union Square on Post Street and closed its location inside Neiman’s. According to Sullivan, RTR outgrew the Neiman’s space. Also, being on the fifth floor of the luxury store could have hindered some traffic. “We want to make sure we have locations that are very convenient,” Sullivan said. “WeWork has a great real estate footprint. We think the network of drop-off boxes can grow.”
Sullivan suggested that Rent the Runway drop-off boxes could appear elsewhere in addition to WeWork. “There are a lot of interesting players that would love to have a drop box in their locations,” Sullivan said. “But we believe there is real opportunity in all WeWork locations. Forty-eight percent of their members are females.”
One possibility is opening a RTR drop-off point, or possibly a store, inside the Lord & Taylor flagship on Fifth Avenue in Manhattan, which is being purchased by WeWork. The flagship will close after the holiday season.
According to RTR, the company has 10 million members across the U.S., and subscriptions represent more than 50 percent of the company’s total revenue. The average subscriber visits the app more than eight times a week and wears a RTR rental more than 120 days a year, mostly for work.
RTR offers rentals from more than 500 designer brands and 150,000 styles, including Proenza Schouler, Iro, Tanya Taylor, Derek Lam, Marni, and A.L.C. Subscribers can rent four items at a time and exchange new items as frequently as they want. Eighty-five percent of the orders come from mobile, with the most active members using RTR’s mobile app five times a week.
Sullivan declined to share financial terms of the partnership, such as whether Rent the Runway pays for the space it occupies at WeWork.