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Direct to consumer fashion rentals company Rent the Runway (RTR) has taken the fashion community by storm. The company’s sustainable and adventuresome subscription service has become a mainstay in the working woman’s closet. With RTR unlimited for just $159 per month, customers can rotate up to four items at any time, giving them access to a virtual dream closet full of 600 plus brands and designers to choose from. With subscription services seemingly taking over the ecommerce and the direct to consumer shopping experience, we asked ourselves: how has the digital-first customer evolved and what consumer behavior is driving this trend?
Maureen Sullivan, COO of RTR, sat down with Danny Wright, Chief Brand Officer at Adweek, to discuss how RTR uses their subscription model to create a dream closet for their customer and help develop relationships with brands and designers using consumer behavior data from their offering.
Sullivan notes the “casualization of the workplace” as the driving force behind the shifting spend on new clothes. Since the early 2000’s as industries increasingly encouraged a more relaxed dress code in the workplace, the market has seen a 4% increase in the amount the average woman spends from her paycheck on clothing for work. While this shift in consumer behavior towards a more individualized wardrobe is certainly not limited to female-dominated industries, Sullivan commented on the pressures that women feel to “show up” and differentiate their outfits from day to day. This pressure fuels the burden of a constant closet rotation, lest they be recognized wearing the same top twice in one week.
RTR began in 2009 as a service allowing women access to high fashion pieces and designers for special occasions. The average client would be dressed by the RTR team a few times a year, choosing from a selection of special occasion pieces. Flash forward to 2019, and RTR has scaled to carry over 600 brands and designers ranging from gowns to weekend wear to office casual pieces that mix and match. Their goal: “to remove the burden of ownership and make it easier for [women] to get dressed every day.”
In scaling from their showroom styling service to a full-blown direct to consumer subscription fashion platform, RTR was met with industry skepticism from their potential fashion brand partners. Sullivan noted the hesitancy stemming from the subscription model, with questions about how the model could sustain sales and help drive customer acquisition for the fashion brands being offered through the platform. Sullivan marks the growth of the RTR we know today in three steps: the bulk of the skepticism falling in the first five years, followed by an interest for industry testing, and leading up to their present portfolio of brands and designers who, according to Sullivan, “Can’t get enough!”
RTR has been able to grow their brand partnerships largely due to their database of consumer behavior customized to the personal experiences of their digital, as well as brick and mortar customers. 94% of RTR customers hear about their subscription through word of mouth- what Sullivan calls the “referral on the dance floor.” Their customer acquisition relies largely on the communities of women who are willing to share their style secrets, from the office to cocktail hour to the dancefloor at a wedding. This overwhelmingly positive word-of-mouth is backed by a uniquely personalized experience of shopping that removes the anxiety of purchasing “trend” pieces while providing customers the opportunity to experiment with fashion and individuality. On average, according to Sullivan, a new customer will try 15 new brands within her first three months subscribing to RTR. By inspiring women to experiment with their closets risk-free of purchase guilt (in the American woman’s closet, 80% of her garments will be worn an average of three times or less), their customers gain access to a treasure trove of designers they would otherwise never experience, and in turn, often drive these subscribers to become life-long customers of the brands that they try.
In inspiring these women to experiment with their personal style risk-free, RTR in turn gains access to a mass of data and analytics surrounding fit, fabric, style, and more supplied by the customer themselves that they can share with their brand partners. Tanya Taylor, who just presented her new collection at NYFW this past week, is known throughout the fashion community as a champion of extended size ranges in women’s high fashion. Maureen Sullivan shared that RTR saw overwhelmingly positive feedback on larger sizes in the Tanya Taylor styles they carried; by sharing this consumer behavior with their team, RTR influenced the extension of Tanya Taylor’s size range which now makes up for a third of their business revenue.
While RTR currently caters to a female client, Sullivan shares that a menswear centric service may be on the horizon. RTR currently runs five brick and mortar locations where a large number of their client base chooses to shop and return their items. These locations are optimized for data retrieval on consumer behavior with self-service tech, allowing customers to quickly scan and drop their used items while inputting their feedback from wear time. From the vantage of this experience, RTR has built a veritable fashion wonderland within their physical locations, where women can participate in what Sullivan calls “legalized shoplifting,” engaging with the fashions without the stress of a price tag.
RTR continues to scale in a market valuing customer experience, sustainable buying practices, and a newfound curiosity for fashion fuelled by its increasing accessibility by way of the RTR subscription model that has effectively democratized high fashion in all facets of the female consumer’s daily life. They have done all this while also creating a customer acquisition platform for brand partners. The experience is designed to be nothing short of magical, catering to the limited time and money their clientele have to spend on their daily looks.
You can see the entire keynote with direct to consumer brand RTR on our YouTube channel, here.