When Jennifer Hyman and Jenny Fleiss started Rent the Runway, they wanted to disrupt the fashion industry. Now, as the company’s 15th birthday nears, Hyman has unveiled her plans to “reinvigorate” the business heading into 2025 and beyond. But that means first reflecting on how much the company has changed, how much she has changed as CEO, and ironically, how far the fashion industry still has to go.
“As much as the world has changed over the last 15 years, the consumer has completely changed — her preferences and ultimately how we go to market in response are completely different — the fashion industry itself is still only embracing change on the margins,” Hyman said during a fireside chat at Shoptalk Fall in Chicago.
As an example, Hyman pointed to the beauty industry, which she said has been fully disrupted, with upstarts like Glossier transforming the way they engage with consumers and develop products, Hyman explained. Although Rent the Runway works with “hundreds of brands” that have embraced the rental and resale model, she noted that, as an industry, “we need to jump into the deep end of the pool in a much bigger way. Embracing this on the margins is no longer going to cut it.”
Aligning with the Demands of Today’s Consumers
“Some of the language that I continue to hear when I go to many of [my go-to-market appointments] are things like, ‘What will our adjacencies be?’” Hyman added. “This is a phrase I’ve heard thousands of times over the past 15 years — it’s a relic of [thinking], ‘Who will we sit next to in the department store?’ It’s like people are talking out of the 19th century. Your adjacency is now the TikTok video and the influencer talking about your product next to the 10 other products that you have no control of.”
In today’s digital world, “there are no adjacencies,” Hyman explained. Consumers are finding inspiration everywhere, and they’re more eclectic in their fashion choices. That means they’re willing to tap into various channels and different types of brands — luxury and low-price alike — to get what they want. If brands cannot keep pace with this demand for variety, they simply won’t survive.
“In our first few years, we worked with a few hundred brands, and nearly three-quarters of those brands are out of business now,” Hyman said. “I have seen more brands go out of business over the last 15 years than I have brands that have stayed in business. Why? Because we’re not actually thinking about what the consumer wants. The consumer has told us loud and clear that she cares about variety, she cares about constant newness, and she’s willing to get that constant newness from rental. She’s willing to get it from resale. She’s also willing to get it from Shein. She’s willing to get it in any way that is affordable and easy for her to access.”
But in addition to ease and convenience, the consumer also wants uniqueness: “She wants to be original; she doesn’t want to wear the same thing as everyone else,” Hyman added. “That creates an opportunity for indie brands to become mainstream in every industry. You no longer need the same established players — retailers, the media or editors — saying you’re cool. You can become a $100 million business based on a 13-year-old girl talking about you on TikTok.”
A New Business, A ‘New’ CEO
Rent the Runway is playing a distinct role in the fashion industry’s evolution by launching a new subscription tier that aims to make the service more accessible for consumers. The brand is planning to “usher in a wave of newness and innovation” by allowing consumers to rent five items from a curated edit of everyday clothing and accessories for $95 per month — a more accessible price point than the company’s other subscription tiers that the company hopes “will enable people to start to dabble even more in rental,” Hyman said.
This is just one of many changes Rent the Runway is making in the lead up to its 15th anniversary. And these changes will be so significant that Hyman believes they will amount to more of a “company relaunch” for 2025.
“Fifteen years ago, I was trying to convince people that wearing clothing that other people had worn before wasn’t disgusting and that it was aspirational and could be sustainable,” Hyman said. “Today, tens of millions of people in the United States alone engage in rental and resale every single year. So the consumer is there, but what we need to do now is make sure that we have the products to usher in completely new customer segments into the business”
This goal comes on the heels of a few very tough years for Rent the Runway. The business experienced “rocket ship growth” until March 2020, “when people fundamentally stopped wearing anything except pajamas,” Hyman explained. “We had some years where we had to rebuild, and we focused on our margins, we focused on getting to profitability. And basically, at the very end of last year and beginning of this year, I knew our business was going to be free-cash-flow break-even this year, and we had to reunite the business around growth. So, I came back to the start of the year as if I was almost a new CEO of the business.”
As Rent the Runway’s “new” CEO, Hyman knew she had to focus on five core initiatives:
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- Evolving the assortment to include more unique items and emerging brands, so consumers see Rent the Runway as a fashion destination that helps them “take more risks and be more bold”;
- Collaborating with new brands and embedding them into the Rent the Runway community, so they become true marketing partners;
- Investing more in technology, including improving its mobile app experience;
- Finding new ways to show up contextually for consumers “IRL.” For example, Rent the Runway is touring major colleges before game days and major events to “get the brand back out there; and
- Leveling up its brand marketing strategy, including new, fresh creative that appeals to younger consumers.
And every step of the way, Rent the Runway will remain laser-focused on its community, which it has spent the last 15 years building and nurturing. “Our business always has been about, fundamentally, the power of community, and so infusing that community into our creative has been a huge part of this creative evolution that we’ve been making. We have some really fun things in store next month for our 15-year anniversary involving that community.”