Rent The Runway, West Elm And The Oversharing Economy

Home Furnishings

Millennials, we’ve often been told, are a generation of renters, as opposed to buyers. Maybe it was all the early childhood focus on sharing that was in vogue in the 1980s, maybe it was the Great Recession that forced many of them to graduate college into an economic wasteland, or perhaps it’s the $1.3 trillion in student debt of which they are demographically speaking the largest bearers. Maybe that first Uber ride really was life-changing.

Perhaps it was some combination of the above.

But the end result is that millennials aren’t just more likely to rent their homes later into life than their Generation X or baby boomer counterparts. It’s that they are more likely to rent — or “share” — everything. Why own a car when a ridesharing service will pick you up at the tap of a button? Who needs a timeshare when Airbnb has made everyone else’s house on this planet a potential vacation spot? Need a puppy but aren’t responsible enough to take care of a dog? Well, puppy temps are in fact a thing. Name a product or service, it seems, and it is hard to find something for which there isn’t a sharing service.

The sharing economy offers participants the ability to enjoy using goods and then hand them back when they are done. Some research has suggested that, while buying items usually makes more financial sense in the long run, because it’s easier psychologically speaking to spend a little over a long time than a lot all at once, the sharing economy has a lot of pull for buyers.

That’s particularly true if that good or service on offer for rent is something that might otherwise be wholly inaccessible to a consumer. Rent the Runway is a sharing economy business that leverages that model, by offering consumers the ability to rent designer fashion and accessories that can retail in the thousands and tens of thousands of dollars — but can be rented for a few days for a couple of hundred or less. Over the years, the brand has expanded its services to include everything from jewelry to activewear to maternity clothes on the site. The company also launched an unlimited subscription option in 2017, where for $159 a month, customers get access to a rotating, near-infinite wardrobe.

And now, RTR is making its next great leap forward — into home furnishings rentals.

“We see home goods as similar to your closet, where there are investment pieces along with design-based seasonal changes you are always wanting,” Rent the Runway CEO Jenn Hyman told Vox. “I think that the customer today wants flexibility to decide when to invest and when to play.”

Via a newly-announced partnership with West Elm, shoppers will be able to rent selected linens, blankets and throw pillows (among other staples) from the home decor eCommerce hub on the RTR site and mobile app.

Hyman says the goal is to make it easy for consumers to quickly and easily seasonably update their homes — something social media savvy millennials are increasingly focused on.

“The home used to be a private place, but now it’s a very public place,” Hyman said. “You see that millennials and Gen Z [are] constantly shooting photos of themselves in their homes on Instagram. It’s a reflection of who they are, and they don’t want to be stuck with the same things.”

And, she noted, when faced with the choice between renting and buying relatively inexpensive goods at places like Home Goods or Ikea — what she calls the home decor equivalent of fast fashion — she believes customers will instead choose to rent for less.

“Instead of creating waste, you can get use out of more well-designed products for the period of time that you need them for, and then you can always return them back into that shared closet,” she said.

And while home decor is new for RTR, rentals are a wholly new market for West Elm. But it might just be the way the home furnishing market is moving — it was less than two weeks ago Ikea announced it is piloting furniture rentals, first in Sweden, with the potential to expand into other countries.

West Elm gets the benefit of Rent the Runway’s built-in 10 million subscribers — all of whom are known rental enthusiasts. Programs like this one, Hyman said, make it easier to push their highest tier option, Unlimited membership, because the value becomes undeniable the more types of offerings consumers can choose from.

“We believe that millions and millions of women are going to have an Unlimited subscription, and so we want to increase the utility and the joy that comes from the program on a daily basis,” she said. “So Rent the Runway won’t just be stuff that you wear, but also the things that you use.”

Will it work?

Time will tell, but there are at least a few stumbling block to overcome. West Elm has had complaints about its quality and customer service in the past — and it is hard to imagine consumers paying to rent goods to create a fully Instagramable living room unless the goods they rent actually look … well good.

Then there is the simple conceptual hurdle — clothes are one thing, sheets are another. Sharing a designer dress that’s been worn less than 50 times total in its entire existence is one thing. Renting sheets that someone else slept on for a season is … a different thing

But Hyman maintains that that difference is more a mental projection than a reality, as Rent the Runway currently owns the largest dry cleaning facility in the world.

“We understand fabrics and garments more than any other company in the world. Fabrics and throw blankets are personal, but so is clothing, and we know how to restore items to perfect condition,” she said.

That may well be the case — but there is personal and there is … very personal. The things one does while wearing clothes are generally in the former category, while things one does while in a bed using sheets are pretty much the definition of the latter category. And while millennials are dedicated and enthusiastic sharers — there is such a thing as oversharing.

Communal bedding might be the location of that line.

Then again, 15 years ago the idea that everyone would be hopping into cars with strangers to get where they wanted to go would have seemed positively bizarre. The idea of what is too personal evolves over time.

But then again, sheets?


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.