Photos: Instagram/@renttherunway
Rent the Runway becoming Resell the Runway
Is Rent the Runway due for a company name change? The women’s clothing rental service says it is entering the resale business, putting it in competition with a growing list of companies chasing the opportunity behind the fastest growing segment of the apparel market.
Rent the Runway has technically always been in the business of selling secondhand clothing. The company, primarily known for renting women’s apparel, has always offered previously worn merchandise for sale at a discount to its subscribers. Even so, co-founder and CEO Jennifer Hyman was surprised to see resales double during the pandemic months as subscribers chose in larger numbers to hold onto their rentals.
Going forward goods on Rent the Runway will be available for purchase, whether the shopper is a subscriber or not.
“Our goal is to be a fully circular platform where the customer has the flexibility to choose how she wants to consume our products,” Ms. Hyman told Vogue.
“There’s a very broad audience of people who want to consume secondhand, but potentially didn’t come to our platform in the past because they weren’t ready to subscribe, or they didn’t have an upcoming party or event,” she said. “Now, they have the opportunity to experience the quality of our assortment, the diversity of our brands, and the incredible fashion on our platform.”
Rent the Runway moves into a market filled with many players, including Poshmark, ThredUP, The RealReal and StockX, CNBC reports. Mainstream brands and retailers, such as lululemon, Neiman Marcus, Nike, Nordstrom, Levi Strauss and Walmart, are also pursuing secondhand good sales to varying degrees.
Ms. Hyman says she isn’t daunted by the numbers in the market. Fast Company reports that she believes the growing size of the market offers opportunities for a wide variety of companies to enter successfully. She also thinks that her company’s merchandise and shopping experience is differentiated enough to help it stand out.
“The runway feels more like a luxury site than it feels like a treasure hunt,” she said when offering a comparison with The RealReal.
- Rent the Runway is Now a Fully-Fledged Resale Site – Vogue
- Rent the Runway enters $33 billion fashion resale market as it looks to build back from pandemic lows – CNBC
- Forget renting the runway. Now you can own it – Fast Company
- How high can thredUP grow? – RetailWire
- Lululemon to pilot ‘Like New’ clothing test – RetailWire
- Nike decides to ‘just do it’ in the sneaker resale market – RetailWire
- Will Levi’s Secondhand store give the brand a sustainable advantage? – RetailWire
- Is Walmart about to become the king of online resale retailing? – RetailWire
- Will a resale shop deliver bigger sales for Nordstrom? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Will Rent The Runway’s decision to offer its clothing for sale to non-subscribers add to or detract from its rental business? Do you see the floodgates opening in the resale market with large numbers of established and startup brands rushing in?
Poll
BrainTrust
Rick Watson
CEO, RMW Commerce Consulting
Bob Phibbs
President/CEO, The Retail Doctor
The apparel rental business took a tumble during the pandemic and, because of ongoing shifts in how and where we work, it will be quite some time before it gets back on track. As such, it is not surprising that Rent The Runway is pivoting into resale – a fast expanding part of the market that suffered far less and is on a far steeper growth trajectory. I don’t see this as being detrimental Rent The Runway’s rental business. However I am slightly cautious about the number of players now piling into resale; as fast growing as it is, differentiation is needed for new players to stand out.
This makes ultimate sense. I even see it as an advantage for Rent the Runway, though perhaps only a psychological one. IMO, the downside of second-hand is wearing someone else’s sneakers, sweats, jeans — I don’t find that appealing.
However I know Rent the Runway is in the business of reprocessing clothing. That same halo will carry over into their resale market.
And it is great for inventory control!
From all accounts, the inventory for this new initiative will come from their old rentals. This has upsides and downsides.
The upside is that the authenticity is more assured. The downside is that this isn’t really a marketplace and so inventory will be limited.
As a result, I don’t expect this to make a big difference in RtR’s returns, or threaten any existing players.
It may be technically a resale, but the operations vary quite significantly between a ThredUP and RTR. The key thing is, you cannot sell your items at RTR.
ThredUP and other marketplaces built competencies in identifying, cataloging, and pricing second-hand products. It is a thrift market, fully automated. RTR is far from that business model.
Now it is possible to apply some of the competencies of RTR to appeal to brands to sell their excess inventory.
IMO, RTR has pivoted one too many times. The physical stores are totally unnecessary and were a huge drain. This is a good example where dark locations might have served just fine to support the operations. They had to back off from that and now they are making this pivot, which isn’t entirely course changing. But it has the potential for distraction in terms of losing the focus on positioning.
I just don’t see the demand for buying others’ cast-offs at the scale we are seeing VC money piling on. Yes a younger demographic is driving it, but at what point are you brainlessly sorting through hundreds of photos to find some one-off item at a discount? And how much profit is out there at scale? Asking for a friend.
Women used Rent the Runway for special events but, with no special events in sight, RTR needed to come up with a different focus. Perhaps sales will help.
I agree with you Cathy. Plus why pay to rent something you can own for the same price or less from resellers like ThredUP?
The decision to sell apparel could actually help the rental business. It offers flexibility and one-stop shopping. Rentals of special occasion apparel made sense, but selling apparel could open up the business to new categories. The infrastructure exists. It’s leveraged for this new layer of business.
The resale market is going to be hot for quite some time. I think this is a great move for Rent the Runway and also codifies the fact that *something* has to happen to those clothes when their rental time is through.
Apparel brands are on the front lines of retail, fighting for survival. The entire retail industry is at the beginning of a shift toward accountability and responsibility for the entire life cycle of their products and services — from sustainable material use to ethical manufacturing standards to recycling and end of life. Brands and retailers are already seeing these values becoming part of the shopper’s purchasing decisions. Rent the Runway is right to try and take ownership of this aspect of their product lifecycle to better control their brand reputation and their customer’s experience, especially since clothing rentals aren’t gaining the same ground that used closing sales are experiencing.
I think that – done correctly – it will both compliment the existing brand and open it up for a broader section of the young hipster market. There is a Salvation Army about six blocks from my house (operating as “Sally’s on 4th”) that is full of very affluent young people sorting through a highly curated selection of goods. The store has a Wexford Crystal section for example, and offers lots of high-end labels and vintage clothing. Integrating these fashionistas into the customer mix seems to be right in Rent The Runway’s “sweet spot.” The higher end of the resale market is already surprisingly robust, but it may be an area where the size of a retailer may be a significant barrier to success. These shoppers love finding new, obscure, resale shops. Scale that up and “Sally’s on 4th” goes back to being a Salvation Army store. This may be an area where prime mover advantage effectively eliminates a significant number of potential competitors.
I’m not the least surprised to see this. Let’s give it nine to 18 months before they start opening stores — because that’s the trend in high profile “pure-play digital” efforts. They end up either in existing retailers or starting their own stores. The profits simply aren’t there without brick-and-mortar.
I see this as a natural monetization play for Rent the Runway. It’s aligned with the values of their customer base and those who do already prefer to support circular consumption. Based on the trends during the pandemic, these customers overlap more than even RTR expected. As long as resale is a value-add and not a dilution of their value prop, they have the ability to leverage a large base and recognizable brand.