Next month, Rent the Runway will celebrate its 15th anniversary. Co-founder and CEO Jennifer Hyman plans to celebrate by starting from scratch — in terms of her approach to leading the company, anyway.
“I need to evaluate the market as a new CEO who is just joining [the company],” she said during a keynote speaking session kicking off Shoptalk Fall on Wednesday. “The speed at which things are moving is 10 times what it used to be. … We need to stop acting like it’s 2009.”
Over the next couple of months, Rent the Runway will introduce several updates, starting with a new subscription tier that rolled out on Thursday.
“It is going to be at a more accessible price point and will give people access to the full array of the millions of products we have,” Hyman said. “We think it will enable people to dabble even more in rental.”
Before Wednesday, Rent the Runway offered three membership tiers. One allowed members to rent five products from a limited selection for $94 monthly, and another offered 10 rentals from the full product range for $144 per month. The new subscription will be priced between the two and permit five monthly rentals from the full selection. “These are the best brands in the world. … You could rent Rabanne,” Hyman told Glossy.
Rent the Runway has been shaking up its subscription offerings since 2020, when it discontinued its popular $159-per-month “Unlimited” plan. It allowed members to rent four items at a time, trading up whenever they’d like.
As the fashion rental pioneer, Rent the Runway has faced its share of obstacles. Hyman recalled struggling to sell potential brand partners on the company’s concept 15 years ago — brands now see it as a marketing channel, she said, and 80% of Rent the Runway members report buying from brands they discover via RTR. Most brands work with Rent the Runway on a revenue-share model. In the early days, the company also had to convince consumers that “wearing clothing other people had worn before wasn’t disgusting,” she said. The company was “on a rocket ship of growth” until 2020, “when people began wearing pajamas.”
Other upcoming changes by Rent the Runway will include the addition of more “interesting” and trendy brands, Hyman said. And the company will continue carrying out the overhaul of its creative, initiated when CMO Natalie McGrath joined the company in March. UGC is now incorporated on product category pages, and more “emotion” is being infused, Hyman said.
Following her Shoptalk session, Hyman planned to visit one of Rent the Runway’s college campus activations. “You have to engage offline,” she said. And, moving forward, engaging in more product collaborations will be a focus of the company.
For the last three and a half years, Rent the Runway has heavily focused its investments on tech and customer experience, while its marketing has remained relatively stagnant. “We were too slow in reallocating dollars back into the magic of the brand,” Hyman told Glossy. “Now, we’re bringing back the magic.”
Rent the Runway also just hired an entrepreneur behind Fab.com who will lead its product team.
“We’re thinking about this as a relaunch of the company,” Hyman said. “We need to think about reinvigorating [everything from] our assortment to our marketing strategy.”
Hyman’s announcement drove buzz among attendees of Shoptalk Day 1. An apparel tech investor speaking to Glossy off the record said he planned to up his stock in the company, based on the session’s discussion.
Failure to evolve is an epidemic in the fashion industry, Hyman said. As such, she’s seen more brands close down than thrive in the last 15 years. As an example, she noted that brand executives still question the “brand alignment” offered at Rent the Runway, worried their products will be offered alongside less elevated brands. It’s an outdated concern, she said.
“People aren’t shopping at department stores anymore,” she said. “They’re [discovering brands] in the TikTok post of an influencer talking about a product and 10 other brand’s products.”
The renewed focus on innovation is serving Rent the Runway well. Hyman is “confident” the company will break even this year, she told Glossy. For the second quarter of 2024, reported in September, Rent the Runway reported a 4.2% year-over-year revenue boost to $78.9 million.
