I, for one, have never used Rent the Runway. In truth, there have been countless occasions in the years since its launch—birthday celebrations, weddings and various other formal events—for which I’ve considered it, but realistically, I hadn’t logged onto Rent the Runway’s site in earnest until today. In college, many of friends swore by it for reasons that still define the company’s impressive reputation—namely, that it has a giant collection of expensive dresses, and that it’s reliable.
And that, my friends, is the reason Rent the Runway is expected to be valued north of $750 million come fall.
September 8’s issue of Forbes includes a fascinating profile of Rent the Runway’s co-founders, Jennifer Hyman and Jennifer Fleiss, and the envelope-pushing business they’ve created together. To put the operation into perspective, the New York-based company processes more than five million members, 65,000 dresses, 25,000 earrings, bracelets and necklaces every single day. For good reason, too: a $2,295 Calvin Klein Collection gown rents for $70 on the site, and $30 gets you a $1,295 Vera Wang frock. With numbers like that, how couldn’t Rent the Runway have a customer base in the millions?
As Forbes so aptly puts it, the demand for new clothes—dresses, especially—will always be there. According to Rent the Runway’s internal research, an American woman purchases 64 new pieces of clothing a year, on average, and she’ll wear half of those just once. In today’s plugged-in, oversharing times, social media only makes that worse.
“It creates pressure for women,” Hyman, who graduated from Harvard Business School in 2009, told Forbes. “Now that you can’t repeat outfits because your friends have seen that outfit on social media. As ridiculous as that sounds, that is what drives our business.”
And so, the desire to wear an exciting new dress for a special occasion far outweighs any “icky” stigma that previously existed. Says Rent the Runway board member and CEO of textbook rental site Chegg, Dan Rosenweig: “The brilliance of what they’ve done is figure how to convince women it’s okay to rent and make it cool to rent and make sure a woman would be satisfied.”
That being said, the site is chic. With a clean white background, easy-to-navigate channels and nary a glaring advertisement, it’s got a decidedly high-end feel. But it’s the company’s services—the on-time arrivals, the stain-free items, the proper fits—that speak for themselves.
Forbes asks, could Rent the Runway’s revolutionary marriage of technology and data become technology’s next billion-dollar venture? They’re well on their way, and at this rate, it could happen sooner than anyone thinks.