Retail

Rent The Runway Bets On Subscription Shopping

Rent the Runway is test-driving an updated version of their fashion subscription program, which will give their customers access to a lower price point plan to experiment with a variety of new looks.

The updated clothing rental program will give customers a chance to subscribe for $89 a month — as opposed to $139 (the price on the plan rolled out about a year ago) — and will give them access to four items of women’s fashion, excluding some designers.

According to CEO and Co-Founder, Jennifer Hyman, the new plan aims to draw in more price-sensitive shoppers outside the site’s normal base of affluent professionals who make up most of Rent the Runway’s existing subscribers.

“It’s unrealistic to assume that at a price point of over $100 a month that you’re ever going to touch people who are making less than $100,000 a year,” she said.

The four pieces in the monthly haul can include dresses, coats or handbags, from labels such as Tory Burch, Vince and Diane von Furstenberg.

But will customers — en masse — want to rent clothes instead of buy them?

“Getting people to change their behavior is difficult,” said David Bell, a marketing professor at University of Pennsylvania’s Wharton School.

The math people do in a renting vs. buying situation, he noted, is hard to quantify, as is the degree to which people will feel uncomfortable wearing a pre-worn dress.

Subscriptions now make up one-third of Rent the Runway’s retail revenue; one-time fashion rentals are the rest of its business. Subscription 2.0 offers 200 women’s fashion brands. The original program, of course, remains on offer, which gives shoppers access to high-end labels like Oscar de la Renta and unlimited exchanges throughout the month; the service will increase from three retail items at a time to four, bumping the cost to $159 per month for new customers.

Under both plans, more women’s fashion items can be rented for an additional charge.

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