Rent the Runway already has a presence in stores, homes and, as of last year, some work spaces. Now, the rental platform is moving on to hotels.
Starting Thursday, Rent the Runway is launching a partnership with W Hotels at four locations across the U.S., where customers can order four pieces from Rent the Runway when they book a hotel room, which will be waiting for them in their closet when they arrive. Rent the Runway’s COO, Maureen Sullivan, said this was an obvious next step after home and work, and represents the company’s larger strategy of having a little piece of Rent the Runway in every part of customers’ lives where it’s relevant.
While Rent the Runway has recently struggled to keep up with demand, it still outpaces competition. This year, it reached a $1 billion valuation and reported $100 million annual revenue, while competitors Nuuly brought in $50 million and Le Tote brought in $5 million annually.
“It’s really based on our idea of the closet in the cloud, or a closet that can manifest wherever you need it,” Sullivan said. “That’s our vision. Travel was such an obvious place for us to expand, because it’s a time where you want those pieces that you will only wear for specific occasions, not whatever black and beige stuff you wear all the time.”
In practice, the process is quite simple. When customers book a room at W Hotels in Aspen, South Beach, West Hollywood or Washington, D.C., they will be offered a prompt on the hotel’s website to select four pieces from Rent the Runway’s Unlimited Closet for an extra $69. When the customers arrive, the pieces will be waiting for them in the closet of their hotel room. When their trip is over, all they need to do is leave the clothes in their closet to return them.
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While any product from Rent the Runway’s inventory can be selected, Sullivan said that, in her experience, customers react better when offered suggestions. Each of the four hotels will have a curated selection of clothes specific to that area. The hotel in South Beach, for example, includes beach coverups and summery clothing while the Aspen location features several pieces from the Rent the Runway’s Ski category, which was newly launched on Monday.
“On the backend, it’s pretty similar to what we normally do: People pick the inventory, and we ship it to them,” Sullivan said. “But this is the first time we’re shipping orders to some place outside of our stores or directly to the customer. It’s the first time we are shipping product to someone else and working with a partner to hold inventory.”
Sullivan declined to disclose the specific structure of the deal between W Hotels and Rent the Runway. While only four hotel locations will have the program to begin with, more are being considered for the future depending on how the first wave of launches go.
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The rental space has gotten significantly more crowded and competitive since Rent the Runway launched in 2009. Newcomers like Nuuly and rental software platforms like Caastle have given customers more options for where they rent from. Since many of these platforms offer similar product, customer service and convenience has become a bigger differentiating factor.
Rent the Runway has experienced a few setbacks, like being forced to pause new memberships earlier this year to deal with back-end logistical issues and some analysts have pointed to other companies that are challenging Rent the Runway, particularly in the area of travel.
“For example, FashionPass is a clothing rental subscription company who really stands out in my mind as delivering exceptional customer service and targeting a very niche market,” said Steve Weiss, CEO of digital marketing agency MuteSix. FashionPass is a similar rental service that is focused on brands slightly below Rent the Runway’s luxury focus but above fast fashion. “While Rent the Runway is targeting an older audience, FashionPass strictly focuses on millennials who are using the service for things like vacation, brunch and other Instagrammable moments.“
Others in the rental space have already broached travel as a natural rental companion. In April, fashion rental company Wardrobe partnered with The Gregory Hotel in New York City for a similar project where customers could reserve clothes ahead of time to be waiting for them in their closets and leave them there after they check out.
“Anything that is a utility or part of your habits could be a right [partner] for us, I think,” Sullivan said. “Work is a forced habit and people like to travel, so those are obvious. I think the gym is a place many of us go to all the time, but I think that would be a natural fit, too. We’re always thinking about where are customer is going to be in the future. In 2030, will people even need to bring a suitcase when they travel? Our vision is a living closet, dynamically merchandised, that’s accessible anywhere.”
This story originally stated that the hotels would have extra inventory on-site, allowing customers to switch out styles. Rent the Runway later clarified that this was a misstatement and that no extra inventory will be available.
