Rent the Runway has claimed it is back to “business as usual,” as an update indicates, with its system upgrades completed ahead of schedule. The upgrades were tentatively set for completion on Oct. 15, and today, the company is now “welcoming new orders and new subscribers” after an 11-day pause.
Jennifer Hyman, cofounder and chief executive officer, spoke for the subscription-rental business’s growth as an “exciting journey,” in a statement, and while marred in technical difficulty, the journey is no doubt bolstered by the company’s swell of subscribers.
The Journey of Circular
Resale and rental are pioneering business models that dovetail off of the changes brought forth by the sharing economy. The consensus is that while these companies are still figuring out how to operate, scale and profit on these circular principles, just as their sharing economy predecessors — their pedestal valuations don’t leave much room for error — or innovation.
Rent the Runway aims to continue innovating its proprietary reverse logistics technology, and as a spokesperson from the company said, one of the primary goals of the system upgrade was to “improve the availability of styles for our customers,” one of the competitive advantages that has aided in capturing its 11-million strong customer base.
Sharing Economy Losing Its Luster?
But Guy Marion, chief executive officer and founder of Brightback, an automated subscriber retention company, foresees a much larger shift happening in the industry, citing the recent trouble for sharing-economy darlings such as Uber, Lyft and WeWork.
“The days of easy, fast growth are over,” said Marion, stressing that bottom-line metrics and “proving themselves as sustainable businesses” are more viable than subscriber count or other “vanity metrics,” mentioning how WeWork’s reported desk count dropped or showed discrepancy within a few months.
Rent the Runway operates several drop-off locations in partnership with WeWork, and as the company spokesperson said, their drop-off locations offer convenience for its customers and were “not paused” or affected by the recent systems upgrades.
No Innovation Without Trial
“There is no way to create these new innovative resale and rental models at scale without these investments,” Andy Ruben, ceo and founder of reverse logistics and technology platform Yerdle, told WWD. Operating at the item level invites its share of challenges. Ruben stressed that this kind of logistics is still a “relatively new area given the growth in resale and rental.” And Rent the Runway is still “charting new territory,” Hyman said.
While Rent the Runway did not offer detail on the systems upgrades, the industry’s knowledge of these circular models is not threadbare and is seen in existing players in the circular space.
An adjacent business model to rental, Yerdle’s resale operations were mapped out by WWD earlier this year, which included steps such as the outsourcing of laundering and repairs, inspecting garments in-house and treating each item as unique within a QR code-based system. Similar to e-commerce pioneer Amazon, Yerdle’s stocking and picking operations are aided by a handheld picking app, tapping randomized put-away to enable the right item to be picked from the bins.
In an interview with Ambika Singh, founder and ceo of Seattle-based apparel rental business Armoire, operations are described as a “handshake between humans and operations,” with the ability to scale up demand in likeness to Amazon.
With a business such as Rent the Runway, inventory visibility is key for creating wardrobe access and repeat renters. Carly Llewellyn, vice president of marketing at Optoro, a returns logistics optimization platform, told WWD that the key to ensuring full inventory visibility is having “sophisticated technology in place that can handle the inventory at an individual item level (not just SKU-level).”