Rent the Runway CEO Jennifer Hyman thinks clothing rental is inflation-proof

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Jul 26, 2022

Jennifer Hyman, Co-founder and CEO of Rent the Runway, shares her insights on the clothing rental industry. She discusses the company's recovery from the pandemic, highlighting a shift in consumer spending towards experiences. Hyman explains the complexities of managing high-risk logistics in fashion rentals, from sourcing to cleaning. She also emphasizes how data analytics drive sustainability efforts and influence durable clothing design. As wedding season picks up, Rent the Runway positions itself to cater to a new wave of fashion needs.

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ANECDOTE

Rent the Runway's Evolution

Rent the Runway began by renting designer clothes for special events at discounted prices.
It later expanded to a subscription model, offering an "unlimited closet" of designer clothing.

INSIGHT

Fashion Waste

50% of most closets are underutilized due to low usage (worn three times or less).
This waste is driven by the consumer desire for variety and retailers offering high quantity at low prices.

INSIGHT

Demand-Driven Expansion

Customer feedback revealed a demand for everyday workwear, leading to Rent the Runway's subscription model.
This model expanded to include various occasions, increasing customer engagement to 80+ days per year.

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Today we’re talking to Jennifer Hyman, co-founder and CEO of Rent the Runway.

Rent the Runway is a a pretty simple idea: it’s a clothing rental and subscription business for women which launched in 2008. The basic idea is pretty simple: you can rent clothes one by one, and Subscribers pay a certain monthly amount for a certain number of pieces that they can swap out anywhere from 1 to 4 times a month depending on the tier of their membership. Rent the Runway also lets customers buy secondhand clothing either after they rent it or just outright.

But Rent the Runway has had a pretty intense path from its founding in 2008 to going public in 2021: the onset of the pandemic in 2020 cratered the business as 60 percent of customers canceled or paused their subscriptions, and Jennifer was forced to make drastic cuts to survive. But she says that now things are swinging back, as more and more people are spending their dollars going out, traveling, and generally shifting their spending from things to experiences. There’s a post Covid wedding boom going on: Rent the Runway is right there for people.

Jenn and I talked about that swing in the business, but we spent most of this conversation talking about running a company that basically does really high-risk logistics: sourcing clothes, sending them to people, getting them back, cleaning them, and sending them out again. Spotify and Netflix run subscription businesses where the products never wear out or get dirty; Jenn has to deal with red win stains at scale. In fact, Rent the Runway runs one of the country’s biggest dry cleaning operations, which I find to be completely fascinating: what does dry cleaning innovation actually look like, and how does it hit the bottom line?

My favorite episodes of Decoder are the ones where simple ideas – renting clothes – turn out to be incredible complicated to execute. This is one of those.

Links:

Apple defends upcoming privacy changes as ‘standing up for our users’

Rent the Runway, a secondhand fashion site, makes its trading debut.

Transcript:

https://www.theverge.com/e/23041884

Credits:

Decoder is a production of The Verge, and part of the Vox Media Podcast Network.

Today’s episode was produced by Creighton DeSimone and Jackie McDermott and it was edited by Callie Wright.

The Decoder music is by Breakmaster Cylinder. Our Sr Audio Director is Andrew Marino. Our Editorial Director is Brooke Minters. And our Executive Producer is Eleanor Donovan.

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