Pageant season at Hampton University is one of the most stressfully exciting times on campus. Young women across campus compete for crowns that essentially go un-remembered after graduation, but being in the midst of it all can form bonds for a lifetime.
My junior year, one of my friends participated in the Miss Black and Gold pageant, an annual show put on by the members of Alpha Phi Alpha Fraternity, Incorporated. That’s when I was first introduced to Rent The Runway, a platform that lets users rent clothes online.
My friend rented her designer pageant dress from the company within a few clicks. Nearly five years later, Rent The Runway has now reached a $1 billion valuation with the help of Franklin Templeton Investments and Bain Capital Ventures. The company plans to use its latest funding to scale its offerings and build out more stores.
Rent The Runway’s success highlights a trend from millennials looking to save money on clothing, rather than purchasing thousands of dollars in formal attire and events garments. Rent The Runway also offers rentals perfect for prom, cocktail hours or a girl’s night out. The company currently does not offer clothing for men.
Rent The Runway also offers two subscription plans — RTR Update and RTR Unlimited. RTR Updates allows users to swap out clothes up to four times per month for $89 each month, while RTR Unlimited gives subscribers an unlimited amount of swaps for $159 per month.
“Rent The Runway platform has had to tackle the challenge of customers who want to try on clothes before renting them. Since launching in 2009, the company has created five brick-and-mortar stores across the United States. Rent The Runway now has locations in Chicago, New York, San Francisco, Topanga, C.A. and Washington, D.C.
Retail-focused startups tapping into a very special time where they can take advantage of online shopping and users’ short-term needs. Rent The Runway’s story began with one of its co-founders, Jenn Hyman, watched her sister spend thousands of dollars on a dress for a wedding using her credit card. The move sparked an idea for Hyman that would later turn Rent The Runway into what it is today.
As the company continues to grow, it emphasizes some huge changes in the retail industry and consumers habits. Not only are consumers willing to rent more often for cheaper prices, they also want to look good doing it.
The wedding industry has completely revamped its marketing and sales strategies. More dresses are being rented, fewer diamonds are being purchased and companies are now encouraging women to gift themselves jewelry.
Clothing retailers are fighting to stay open as they compete with the rapid pace of online stores like Fashion Nova. Rent The Runway has tapped into a market of consumers who want luxury, style and discounts without the hassle of cluttering their closets — and it’s working.