In 2018 Rent the Runway — the company that transformed the way people think about buying, and owning, designer apparel and accessories — was named the ninth most disruptive company in the world on CNBC's Disruptor 50 list, joining the ranks of Uber, SpaceX and Airbnb. Now, a decade after its founding, the company is set to upset another major sector: home goods.
Last week the rental clothing company, which has grown to 10 million members and an estimated $100 million in revenue, has announced a partnership with Williams-Sonoma's West Elm brand to allow subscribers to rent soft home decor, including quilts, blankets, shams and decorative pillows. Items will be available in 26 different "bundles" that range in retail value from $150 to $450 beginning this summer.
Rent the Runway COO Maureen Sullivan is optimistic the partnership with West Elm will blossom and eventually evolve into other areas as consumers' mindsets shift with the times. "We used to say we think the future is 50 percent rented, 50 percent owned," said Sullivan. "As our growth accelerates, we say maybe it's 80 percent rented, 20 percent owned. I think there's more and more forces at play right now culturally that just make us realize you don't need to own as much as we all have."
Founded in 2009 by Jennifer Hyman and Jennifer Fleiss, Rent the Runway has evolved from a designer-dress rental service into a monthly unlimited clothing subscription service that includes RTR Update, where members can rent four items a month for $89, and RTR Unlimited, which allows members to rent four items on constant rotation each month for $159. Through the West Elm partnership, subscribers will now be able to replace one of their items with one of the 26 home decor bundles.
On Monday, Rent the Runway was in Austin to provide a first look at the upcoming Rent the Runway x West Elm home partnership collection. The pop-up event, which was attended by more than a thousand people, wasn't walking distance from the Austin convention center, the nexus of South by Southwest activity. Nor was it showcasing a celebrity or band, as many of the other packed event spaces in downtown Austin. Instead, the draw was the offer of $80 off two months of RTR unlimited, which will soon include the West Elm products.
Why West Elm isn't worried
When Rent the Runway first started renting dresses, it had to convince clothing brands that it wouldn't just cannibalize their business. West Elm president Alex Bellos said he's not at all concerned but rather sees the partnership as an opportunity.
"We know our customers are already participating in the circular economy. We are one of the brands on resale sites. People pass on West Elm products to their friends because it's good quality," said Bellos. "So what we want to do is have an active role in that conversation, and our partnership with Rent the Runway will allow us to do that."
We used to say we think the future is 50 percent rented, 50 percent owned. As our growth accelerates, we say maybe it's 80 percent rented, 20 percent owned. I think there's more and more forces at play right now culturally that just make us realize you don't need to own as much as we all have.Maureen SullivanRent the Runway COO
Plus, Bellos said he sees this as an opportunity to introduce Rent the Runway's customers to his brand and to help further the company's commitment to environmental sustainability.
And now West Elm will benefit from a wealth of data about how — and how long — consumers use their products. "In a traditional sales model, you just get sales data — what sold, what was the sell rate, what was the return rate," said Sullivan. "In our model, we know how people actually use the product and how they experience it, and so I think that is a different level of insight that many of the brands we work with wish they had."
Renting sites may have Instagram to thank
The rise of social sharing is driving demand for people to more frequently update not just what they're wearing but also everything else in the background of their pictures. "I think the home is really a backdrop where a lot of that content is created, and people want to make sure their environment reflects their personal style. ... Social media is a real driver of that," said Sullivan.
West Elm's Bellos believes soft home decor is just the beginning. In the Austin RTR pop-up, he said, "Just walking the line of customers, we've heard Christmas ornaments, party supplies. So we think this is the start of a real longer journey that we are in with Rent the Runway."
"This partnership really came out of our subscribers telling us to help them with other areas of their life, and I think it's just the beginning," said Sullivan. "I think there are many ways that people are realizing, removing the burden of ownership is a huge unlock and that it makes way more sense to discover new brands and to rent products you need, when you need them."
Rent the Runway is currently the nation's largest dry-cleaner, and the addition of soft home decor will only add to that logistical challenge. But barriers such as this do not stop trailblazing companies. Rent the Runway will continue to evolve and expand by listening to what else its customers want to rent rather than own.
