Rent the Runway’s chief executive and co-founder Jennifer Hyman is emphatic that leasing clothes could reverse fashion’s flagging fortunes.
However, the biggest challenge for the etailer – which is one of many businesses at the NRF show that is capitalising on the booming subscription economy – has been “convincing retailers that it wouldn’t cannibalise sales of designer brands”, says Hyman.
“They thought it would destroy their businesses but what it’s actually done is get a whole new group of people to consider designer clothes for the first time,” she says.
The business now has stock to rent from over 500 designers – and Hyman insists this plethora of retail partnerships would never have materialised if renting didn’t positively impact these businesses’ bottom lines.
Rent The Runway’s membership model, which allows shoppers to pay a monthly fee for unlimited access to the business’ raft of luxury clothing items, was launched 18 months ago – and the service has had some unforeseen perks for its luxury retail partners.
Designers have been able to see very quickly which of their items have caught the eye of Rent the Runway’s clientele and have tweaked their collections accordingly. They also receive feedback when the calibre of an item is not up to scratch.
“The data we have now is so important to the manufacturing process for designers. Our model allows us to identify problems and challenges in traditional retail and fix them through our data,” says Hyman.
In this spirit of collaboration, Rent The Runway plans to work with retailers in luxury and the ever-squeezed middle market to help them develop their own rental platforms.
“Rental increases the size of the industry, one thing we’re really passionate about is helping other brands and retailers power rental for themselves. An online fashion product page that gives you a ‘Buy’ and ‘Try’ button will be really powerful because it gives customer choice in how they want to interact with your brand,” she says.
The next Netflix
Rent The Runway wasn’t the only business touting itself as the Netflix of its sector at NRF this year. Serial entrepreneur Marcia Kilgore, who founded brands including Soap & Glory and Fitflop, has taken on the subscription economy with her latest venture Beauty Pie.
Touted as a means of getting ‘luxury beauty at factory prices’, the retail venture will send shoppers high-end make-up products for a monthly subscription fee – like a posher Birchbox.
However, unlike Hyman, it was Kilgore’s reluctance to cater to the whims of big retail names that spurred her to create Beauty Pie.
“No retailer is going to give you a shot [in beauty] because they’re busy selling their own stuff. Sephora has incubated its own brands and then pushed them out and Boots is now doing the same thing,” says Kilgore.
As a start-up, Kilgore is looking to circumvent the traditional retail channels to get her offer out to the masses – and with her success to date, you wouldn’t want to bet against her.
But where does this leave traditional retail? If promising and disruptive start-ups are actively choosing to avoid working with retailers to get scale, there are worrying implications. Where will that leave the department store beauty hall in years to come?