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Rent the Runway CEO Jennifer Hyman says often when you’re buying clothes, you’re really just renting them.
“When you buy something for $9.99 and you know that it’ll fall apart after you wear it once ... you’re going into the shopping experience knowing that you’re renting. So all I’m doing is making the rental process more efficient,” she said at Recode’s Code Commerce event in Las Vegas on Tuesday night.
That’s also why Rent the Runway’s subscription business will account for more than half of its annual revenue in 2018. The service — for $159 a month, women can rent as often as they want, four pieces at a time — is growing at a rate of over 150 percent a year, according to Hyman.
“I think about our subscriber growth, and that’s the metric I’m obsessed with,” she said, while not providing whole figures.
She did suggest in 2016 when she started the subscription service that it would generate more than $20 million annually and that it could eventually exceed the company’s first offering — women renting higher-end items for special events — in a few years.
That kind of growth has sparked interest from some clothing labels, she said, and the company plans to start offering its “wardrobe in the cloud” service to other brands. That also spotlights a larger ambition, what Hyman calls a “reverse logistics” business.
“We’re in the 100 percent return business,” she said. “This is driving millions of new customers into brands; most of our customers are wearing brands they’ve never tried before. We’re saying here’s a new revenue stream for you that not only gives you money, but also gives you customers and data.”
She did not specify which clothing brands plan to use its rental logistics service, but Hyman did highlight some other details:
- Rent the Runway includes over 550 brands.
- Subscribers to the service use Rent the Runway 150 days a year on average.
- The chief complaint among subscribers is they want items turned around more quickly, which suggests customers are likely to use the service as much as 200 days a year.
- The company plans to open a new distribution facility in Dallas.
- Rent the Runway has served 8.5 million customers since it started eight years ago and has raised $210 million so far.
But her company’s rapid success has also inspired a somewhat surprising mission statement: “We want you to buy less stuff.”
You can watch the full conversation below:
This article originally appeared on Recode.net.
