Resale and rental platforms are becoming department store staples

This week, Rent the Runway announced its latest partnership with Nordstrom: RTR Revive. At 24 Nordstrom Rack locations, customers can purchase (not rent) worn items from Rent the Runway’s catalog, essentially hosting a small resale section within the store.

It’s the latest collaboration between Rent the Runway and Nordstrom, a pair that’s been increasingly working together. Last year, Nordstrom added Rent the Runway pick-up and drop-off locations at five stores throughout California. In November, that partnership was extended into this year with 24 stores around the country. But it’s also the latest indication that department stores are catching on to something that’s been brewing for a while: the convergence of the primary and secondary markets.

Resale and rental models have become so popular and widespread that they’ve long since transitioned from curious novelty to a basic part of the fashion and retail landscape. Rather than fighting against resellers and renters, the way some brands are still doing, department stores have started to see them as a golden opportunity to remain relevant.

“In the past year or so, we’ve really seen a move toward the mentality of, ‘If you can’t beat them, join them,'” said George Sullivan, co-founder and CEO of Sole Supplier, a media company focused on footwear and sneakers. “More and more partnerships and investments are being announced, as brands and retailers attempt to monetize the resale market and keep it under control.”

Rent the Runway was unable to comment in time for the publication of this story.

Many of the major department stores now have at least some association with resale or rental. Macy’s began selling second-hand clothes in 40 stores last August, through a partnership with ThredUp. Rental company Le Tote bought Lord & Taylor last year, infusing rental services like Le Tote pick-up and drop-off at select Lord & Taylor locations. The first full-service Le Tote rental location at Lord & Taylor opened in New York in November, with more planned to come in the next few months.

Neiman Marcus bought into a resale platform, taking a minority stake in Fashionphile last year. The partnership has mutual benefits that, only a few years ago, retailers seemed to not recognize. Department stores can use the presence of these popular resale platforms to get more people in the door, where they can more easily be converted into customers. 

Much has been written about the struggles department stores have been facing. They’re overexpanded, so their costs are through the roof while waning sales mean they can’t afford to keep all those locations. But ironically, that weakness is also what makes them so valuable to resellers, many of which have limited brick-and-mortar footprints of their own.

Rent the Runway only has five physical locations, discounting its various drop-off locations. Nordstrom has more than 300. Even though the Nordstrom partnership is currently only limited to a few Nordstrom Rack locations, if Rent the Runway and Nordstrom continue strengthening their relationship as they’ve done over the past year, that gives Rent the Runway the opportunity to vastly grow its physical footprint.

“We drive a lot of business for the brands,” said Fashionphile founder Sarah Davis. “When you sell a bag to us through Neiman Marcus, you can get 10% more in store credit. We have a lot of anecdotal stories about our customers buying from Chanel, selling to us at Neiman Marcus, and then using that money to buy more from Chanel while they’re there. Now, we can go back to the brand and say, ‘In 2019, Neiman Marcus did millions of dollars’ worth of business for your brand.’ I can’t see any of these [department stores] not involved in the resale world in five years, especially the ones that are super against it now,” Davis said. “And they’ll need help from players like us.”

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