Rent the Runway, the fashion startup that pioneered the concept of renting clothes instead of buying them, wants you to start renting your blankets, throw pillows, and linens.
Today, RTR is announcing a partnership with West Elm, where customers will be able to rent certain home goods from the design-focused furniture company on RTR’s website, starting this summer.
Jenn Hyman, RTR’s CEO, tells Vox that home goods was a natural next step for her company as it looked to expand its footprint in the sharing economy.
“We see home goods as similar to your closet, where there are investment pieces along with design-based seasonal changes you are always wanting,” she says. “I think that the customer today wants flexibility to decide when to invest and when to play.”
A little less than a decade ago, Rent the Runway launched with a novelty concept: letting women rent black-tie clothes, rather than having to drop major cash to buy evening clothes they’d only wear once. Over the years, RTR has expanded into other categories: You can now rent everything from jewelry to activewear to maternity clothes on the site. The company also launched an unlimited subscription option in 2017, where subscribers who pay about $159 a month get access to a rotating, near-infinite wardrobe.
Hyman says RTR expanding into this realm is a response to the hunger that millennials — its core customer demographic — have for home decor. Home ownership is down among people ages 25 to 34, with a 2018 report from the Urban Institute finding that the rate of millennial homeownership is currently much lower than that of baby boomers and members of Generation X. This age group is strapped for cash and inundated with student loans, which means many millennials are forced to rent. They tend to spend disposable income sprucing up their city apartments, splurging on plants, and doing small DIY renovations. Hyman wants RTR to be the place these customers turn to for their seasonal updates, especially as the home space becomes an important aspect of one’s social media presence, meaning eyeballs for the growing startup.
“The home used to be a private place, but now it’s a very public place,” she says. “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.”
Whereas in the past she’s spoken about RTR taking on big fast-fashion brands like H&M and Zara, Hyman now predicts this new service will eat away at the market share of Home Goods or Ikea.
“When you’re going into those stores, it’s very intentional that you’re using those products for a very short duration of time,” she says. “So 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.”
Hyman is betting big on the sharing economy. Many businesses predict that the future of shopping is being influenced by the “end of ownership,” an idea authors Aaron Perzanowski and Jason Schultz coined when describing shoppers eschewing personal property in the digital era. With so many options available to them, shoppers — especially millennials — appreciate the noncommittal freedom they get from renting products. Some research has suggested that, while buying might make more financial sense in the long run, the psychology of spending small amounts of money makes renting more popular.
Moving into home goods isn’t just a first for RTR: This will also be the first time West Elm is getting into the rental space. The move is in line with other mainstream companies jumping into rentals. On the fashion end, for example, mall brands like Ann Taylor, Jones New York, and Express started letting customers rent their clothes, trying to mimic RTR. On the furniture end, Ikea recently announced that it, too, was piloting furniture rentals, first in Sweden, with the potential to expand into other countries.
Expanding into home products is also about making RTR as attractive as possible to new customers, Hyman says. While it’s practically a household name as far as fashion startups go, RTR has also received about $416 million in funding — money that will need to be paid back at some point.
The company says it has over 10 million subscribers. It would not share annual revenue with Vox and does not disclose how many Unlimited members it has, but analysts told the New York Times last year that the company only has 50,000 of them. If the company’s assortment of fashion offerings aren’t enough to give RTR the push it needs to grow, perhaps its move into home goods will. Hyman says the goal is to turn its Unlimited service into Amazon Prime.
“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, the way Amazon started offering entertainment and music content to make us more loyal to Prime,” she says. “So Rent The Runway won’t just be stuff that you wear, but also the things that you use.”
This move could no doubt come with growing pains. Beyond the fact that West Elm doesn’t always have a great reputation when it comes to quality or customer service, there’s also the concern that sharing something as intimate as blankets and bedding won’t appeal to shoppers.
But if there’s any company that can solve this problem, it’s RTR, says Hyman. The company 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.”
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