Can Rent the Runway move past unlimited rentals?
Imagine if Netflix or Spotify got rid of unlimited streaming and how viewers would react? Rent the Runway may be facing a similar challenge as it moves to end unlimited rentals.
The shift should give the company the ability to add tighter control over expenses and ensure faster deliveries. Sending fewer overall shipments per customer also supports sustainability goals. The change comes as the demand for formal wear, Rent the Runway’s forte, has waned in a stay-at-home economy.
Members gain more customization and flexibility under the new subscription structure, although Rent the Runway CEO Jen Hyman admits that losing the unlimited option will annoy some customers. “There are of course going to be a segment of unlimited users who are extremely upset about this decision … and this isn’t a decision we made lightly,” she told CNBC.
The new monthly structure offers customers the choice of:
- A four-item plan (formerly called 1 Swap) for $89 per month, with access to a narrower basics inventory, including casual and workwear;
- An eight-item plan (formerly called 2 Swaps) for $135 per month, with access to all inventory, including formal wear;
- A 16-item plan (new) for $199 per month, which equates to four shipments of four items each month, also with access to all inventory.
The company has instituted an upgrade to include faster turnaround — members will be able to get their next shipment before their returns are scanned back. It’s the “most-requested feature of all-time.”
The 16-item plan, however, is still priced higher than the current $159 Unlimited Swap plan. Ms. Hyman noted that 70 percent of Unlimited Swap members were renting fewer than eight items per month and have the opportunity to shift to the cheaper plan. Only six percent were renting 16 items or more monthly.
“We believe that when a member is in the right plan that matches their needs and budget, they’ll stay with us longer and keep renting — helping us on our mission to reduce clothing waste and build a better future for fashion,” said Ms. Hyman.
The new structure is set to debut this week. Current Unlimited members will have until early next year to phase out of their plan before picking a new one.
- An Open Letter from Our CEO Jenn Hyman on the Future of Subscription – Rent the Runway
- Rent the Runway overhauls subscription plan as pandemic reshapes business – CNBC
- Rent the Runway is ending its unlimited monthly subscription — but you can still sign up for it before next week and enjoy it until ‘early next year’ – Business Insider
- Rent the Runway is ditching its unlimited membership – CNN
- Rent the Runway axes the Unlimited model – Glossy
DISCUSSION QUESTIONS: Are the changes under Rent the Runway’s new membership structure equally beneficial to Rent the Runway and members? How much of a hurdle does Rent the Runway face convincing Unlimited Swap members to embrace new plans?