With summertime comes weddings, proms and parties that demand you look your best. For many women that means spending hundreds, even thousands of dollars on new dresses for each event, or wearing the dress, hiding the tags and returning it to the store the next day. But Rent the Runway gives women another option --renting dresses that are in season, capture the hottest fashions, and doesn't require bending the rules.
"We’re actually legalizing a behavior that women have been doing kind of on the DL [down low] for many years," says co-founder & CEO Jennifer Hyman. "We’re taking away some of the worst customers from a department store and converting them into positive luxury customers on our end."
Hyman and her Harvard Business School classmate Jenny Fleiss started their company in 2009. It's been called the Netflix of fashion; they offer short-term rental of designer clothing at a fraction of the department store prices.
For instance: a $3,500 Carolina Herrera gown can be rented for four days for $450 dollars. If that's still outside your budget you could rent a $425 Diane von Furstenberg dress for 50 bucks. There are all sorts of price points available to customers who log onto RentTheRunway.com. Once there women can browse dresses by style, designer and price. They can even input their measurements and see user-submitted pictures of dresses being worn by someone with a similar body type.
"We think this is really empowering for women," says Hyman, "both that we’ve turned our customers into our models...[and] letting our own customers make the decision as to whether they think that someone like them looks good in [a particular dress]."
The company recently partnered with Beyonce. The international superstar has chosen her favorite Rent the Runway styles and put them all in one place on the website. This allows customers to get a Beyonce look without paying Beyonce money.And it was money, specifically from outside investors that was a key challenge to getting Rent the Runway off the ground.
"Many of the boardrooms of venture capital firms or strategic investors are filled 100% by men," Hyman states. "You can’t describe to a man why it is that women feel compelled to wear a new dress to every occasion, or why women are obsessed with living this celebrity lifestyle... it’s just something you intuitively know as a woman...So we would have to address these kind of board rooms full of men by showing them videos of our customers."
Once Hyman and Fleiss had their funding they were able to expand their offerings and move from the back of a dry cleaning store to loft space in Manhattan's trendy Tribeca neighborhood. Here they opened their first showroom, making the company more than just an online retailer. Shoppers can come see the dresses for themselves, try them on and rent them all in one place.
But for women who can't get to New York City, Rent the Runway does its best to recreate the in-person shopping experience online too.
"When you order a dress you always get it in two sizes to ensure the perfect fit," explains Hyman. "We also allow you, for $25, to choose an entirely different style so you can replicate that department store dressing room experience where you would often bring multiple sizes of multiple styles and try them all on."
Hyman hopes these features will keep her company a step ahead of competitors.
"I see the competition as any time a woman is going to buy something disposable at a store like H&M, Zara, Forever 21," Hyman says. "So my marketing challenge is convincing you to spend that same $75 on rent the runway and have the aspirational experience to try a dress that you’ve always dreamed of wearing."
But what's hot today is not tomorrow, and that is what could keep Rent the Runway relevant.
"The profitability model is really around loyalty and it’s around customer lifetime value," Hyman says. "Renting is a behavior that’s just as relevant when you’re 16 and you’re going to your prom as when you’re 25 going to a wedding or when you’re 45 and going to an anniversary dinner with your husband."
As for the future, Hyman won't comment on the possibility of taking her company public but does have some ideas for growth that may lead to a closer relationship with traditional brick and mortar retailers.
"There’s gonna be a lot of categories that we launch over time beyond just dresses and jewelry and hand bags," she says, "and I think you’ll also see Rent the Runway helping other retailers to potentially rent their inventory."