When Rent the Runway first came on the fashion scene, it was revolutionary. Why own designer pieces when you could rent them at a fraction of the cost? After all, how many times are you really going to where a Versace ball gown?
Then, Rent the Runway stepped up their game. In 2016, Rent the Runway started a subscription service, allowing women to pay a fee and receive four pieces at a time. In the three years since, the subscription has grown to include unlimited exchanges, costing $159 a month.
In March, Rent the Runway became a “unicorn,” any company valued at $1 billion. This enviable status being owed in part to their innovative approach to dressing women daily and being the first subscription service of its kind. We subscribe for our music, our movies and even getting our mail faster through amazon. Our closets are a logical next step.
Yet, now the subscription scene has become flooded with options. Most recent of which is Urban Outfitters. In May 2019, Urban Outfitters Inc. announced they would launch a subscription service named Nuuly.
The service costs $88 and allows customers to rent pieces from Urban, vintage sources and street style brands. At any point in time, a subscriber can check-out $800 worth of merchandise. Simply put: it’s Rent the Runway on a budget.
Where did all the subscriptions come from, though?
First and foremost, subscription services target millennials who are increasingly conscious of their ecological footprint. Millennials and their Gen Z contemporaries want to live sustainably and not buying fast fashion is one of the easiest ways to start doing so.
Second, owning an online storefront is much less expensive than a brick-and-mortar counterpart. Since Amazon became the industry giant that it is, more people are putting on sweatpants and shopping online rather than in stores. It is simply easier.
Lastly, subscription allows for clothes to have multiple lives and earn more than their value. Here is an example: I have a shirt and each of my housemates wears it to a party that I got as a gift. If I charge each girl $10 a wear and there are six girls, I am earning $60. That is not including all the times I wear it. Even if I take out the cost of cleaning that shirt, I did not buy it, so I am still earning money.
A company only has to pay for the production of the shirt the first time around and will easily make up the difference during rental.
Is there room for the new ventures?
Yes and no.
Yes, because people will always want to pay less for a service they enjoy. Nuuly even offers some of the same brands that Rent the Runway does such as Universal Studio and Anna Sui.
But, the other side is that Rent the Runway has had three years to hone their market, their service and solve any issues that have come up in the process. They have even expanded into store fronts and offer college discounts.
So, will Nuuly work?
Rent the Runway became an industry innovator by breaking the rules of what a closet can be. They found their niche: fashionable women who cannot afford what they really want to wear.
Nuuly has the unique spin of being more affordable than Rent the Runway. However, they have built a following of girls who pride themselves on their earthy vibes, personal thrifting prowess and nonchalant attitude around their look.
The only question left is whether or not this niche will give up that identity in favor of door step delivery of the same vibe.