Will Rent the Runway become all the fashion for kids?

Discussion
Photo: Rent the Runway
Apr 09, 2019
Tom Ryan

Rent the Runway, the online clothing rental leader, is adding kids’ apparel to its monthly subscription service.

The initial launch will include girls’ sizes 3Y to 10/12Y and feature special occasion and everyday wear from designers such as Chloe, Fendi, Stella McCartney, Mark Jacobs and Marni.

Jennifer Hyman, CEO and mother of a two-year-old, told Women’s Wear Daily that parents often don’t want to invest in trend-driven or special-occasion clothes since kids are inherently messy and continually growing.

She told Business Insider, “With this launch, you’ll never have to worry about a stain or a spill because Rent the Runway handles everything.”

Children’s clothing has also been a constant request from customers. The average age of a subscriber is 29 and many have young children.

Rent the Runway began in 2009 as a destination for women to rent formal gowns and cocktail dresses for weddings, sorority formals, proms and other special occasions. In 2016, it launched Rent the Runway Unlimited, which allows women to rent everyday apparel as well, four items at a time, for a monthly fee. Unlimited costs $159 per month.

Serving as an extension of the subscription offering, members will be able to rent four pieces of either women’s or kids’ offerings. Extra items can be added for a surcharge.

Children’s clothing is the third category Rent the Runway has entered. It moved beyond women’s apparel in March when it announced a partnership with West Elm to rent home furnishings such as throw pillows and blankets. Also in March, Rent the Runway received a new round of financing that valued the company at $1 billion.

Recently defining its goal to become the “Amazon Prime of rental,” Rent the Runway is planning to expand across categories over the next year on its belief that consumers will embrace an ever-rotating array of options as well as the sustainability benefits that come from renting instead of owning.

“Consumer behavior is shifting,” Maureen Sullivan, Rent the Runway’s COO, told Adweek. “There’s a massive cultural trend driving this behavior change. The experience in the sharing economy has made people realize they don’t need to commit to owning so many things.”

DISCUSSION QUESTIONS: How appealing do you think rentals of designer kids’ apparel will be on monthly subscription basis? What do you think of Rent the Runway’s ambition to expand into kids, home and other categories?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If there’s a business model here, Rent the Runway is on the right track. But where exactly do kids go that they need to dress to impress?"
" I guess Rent the Runway just has to add lots of cleaning formulas to get those stains out that children seem to pick up."
"I still maintain that the model works best where the cost per-use of a product is very high because it is used infrequently or is incredibly expensive to buy."

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17 Comments on "Will Rent the Runway become all the fashion for kids?"


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Ricardo Belmar
BrainTrust

The article is right – kids outgrow clothing at a constant rate and can often be messy and spoil new clothing – all reasons for parents to avoid buying higher-end apparel for their kids. Removing that feeling of lost money spent on clothes their kids can’t wear anymore may be very appealing to many parents in Rent the Runway’s target market. I could see this expanding their market as well. It will be interesting to see if they create a subscription model just for children’s clothes in addition to the add-on to the existing subscription.

Anne Howe
BrainTrust

What a great idea. My daughter has been a customer for years. She has 30 first cousins, only six are married. Her five- and two-year-old grand daughters are the perfect target audience for fabulous and fun dresses for the next 24 weddings! Party shoes should be the next category added.

Jeff Sward
BrainTrust

This actually makes as much if not more sense than renting for adults. Renting for pure short-term needs. Clothes for the two-year-old might be the very definition of short term need. It’s so much easier for my left brain when the logic is simple and obvious.

Bethany Allee
BrainTrust

Jeff sums it up perfectly, this “makes as much if not more sense than renting for adults.” I really wish this service had been around before my kids outgrew it!

Art Suriano
BrainTrust

Renting clothes sounds like a great idea but also has many steps involved not to mention a hefty price tag, so I’m on the fence with this. The concept is doing “okay” but has not emerged as the next best thing I have to have. It requires time to figure out what you want, wait for the clothes to arrive, and send the clothes back. Once the novelty wears off, I can see customers losing interest. Now adding kids creates more burden and expense, so I don’t see this as a long-term success. Also, as the technology for “custom made clothes while you wait” is perfected, consumers will opt for this service because they will no longer have to deal with the size and fit compromise. I see “custom made clothes while you wait” becoming a huge success within the next ten to twenty years and it will change the entire apparel industry.

Neil Saunders
BrainTrust

This seems like a sensible addition to the mix. While it is unlikely to be useful for everyday clothing, it solves the resistance to buying expensive, special occasion apparel for kids – garments that they may only wear once or twice before growing out of them.

Moving into other areas, like homewares, is also smart. However, I still maintain that the model works best where the cost per-use of a product is very high because it is used infrequently or is incredibly expensive to buy. That’s the sweet spot for the service.

Cathy Hotka
BrainTrust

If there’s a business model here, Rent the Runway is on the right track. But where exactly do kids go that they need to dress to impress?

Georganne Bender
BrainTrust

I have watched shoppers in high-end children’s clothing stores spend $3,000 on kid’s clothing without hesitation. $55 for toddler pajamas? No problem.

I don’t see this market renting kids clothing nor do I see the Millennials in my life renting everyday play clothes. But I do think it makes sense for special occasion clothing. Buying an expensive outfit for a special occasion that a kid will outgrow in weeks is currently a waste of money. If Rent the Runway is consistently getting requests for children’s clothing then it’s worth a shot.

Lee Kent
BrainTrust

I totally agree. I’m thinking this is likely more inclined toward the above toddler age too, though there will surely be some younger takers. Children have many special occasions and I heard the statistics once about how often children actually wear their special clothes before out growing them, and it’s something like 4 max. This is a great concept. I guess Rent the Runway just has to add lots of cleaning formulas to get those stains out that children seem to pick up. And that’s my 2 cents.

Ryan Mathews
BrainTrust

I think it’s a natural! Kids outgrow clothes. Fashions change quickly. Parents have limited time to take kids shopping and limited disposable income to sink into wardrobes that will stay in the closet a month or two after they are purchased. Seems to make perfect sense to me.

Ed Rosenbaum
BrainTrust

They are on to something here. Kids grow out of clothes faster than the credit card bill can be paid. This can grow into something. One other thing you can count on, competition will be coming once they see how successfully this marketplace is growing.

Doug Garnett
BrainTrust

Is Rent the Runway the new Groupon of retail?

I think there’s a very interesting market available to Rent the Runway. I also think that market is a narrow niche — strong but narrow. As with Groupon.

So is this smart? Probably a smart move for Rent the Runway, but that will depend on how rough the wear and tear is on the clothes. There are reasons this might not work out so well in reality.

What I fear, though, will be the likely announcement that retailer X is redesigning their business around a Rent the Runway model niche.

Zach Zalowitz
BrainTrust

This sounds like a great offering but is likely plagued with operational challenges, specifically around returns dispositioning back to a DC in addition to what is likely a different order profile for a child ordering clothes vs. someone shopping for a dress for a wedding. Less inventory turn.

Jasmine Glasheen
Staff

I can see this being quite lucrative for Rent the Runway. Kids aren’t known for keeping clothing pristine, so I imagine many of the parents who use this subscription service will end up paying for the clothes they rent.

I agree that Rent the Runway for kids will be best for special occasions. However, ambitious parents will try to rent everyday apparel and wind up purchasing it when their kids get it dirty, which I don’t imagine that Rent the Runway will mind.

Brandon Rael
BrainTrust

Now that the Rent the Runway has achieved their economies of scale, and have somewhat perfected the subscription apparel market, there absolutely is an untapped market for renting designer kids’ apparel. As a father to two very well dressed and fast-growing young kids, we would definitely consider signing up, especially as they grow out of their clothes so fast.

Just as Millennials want to keep up with the latest designer trends, this service is ideal for parents of young kids to rent clothing for special occasions, and other events.

Now that they have the technology, infrastructure, and processes in place, to run a profitable business, by all means, the Rent the Runway group could continue their innovative offerings by expanding into toys, home furnishings, and other areas, where the sharing economy may resonate.

Steve Dennis
BrainTrust

This seems like a logical add on, but a relatively small opportunity. The reason that the high-end kids fashion business is small is that most kids don’t have the wearing occasions where this would be of interest. It’s also important to note that, as I know from my time at Neiman Marcus, a good chunk of the fancier kids clothing category is affectionately known as “grandparent bait,” i.e. it is bought by grandma and grandpa as gifts. It’s hard to see grandparents seeing RTR as a good substitute.

linda flaherty
Guest
13 days 2 hours ago

As a seasoned (approaching 25 years) children’s upscale boutique owner, I don’t see my customers shopping this way. We hand select and make sure every garment properly fits each child so when they are wearing it, they look their best. When their children out grow the better made clothing they resell the garment and reinvest in new fashions. Our customers shop with us because of the TLC they receive and because we offer the look they desire for their children.

wpDiscuz
Braintrust
"If there’s a business model here, Rent the Runway is on the right track. But where exactly do kids go that they need to dress to impress?"
" I guess Rent the Runway just has to add lots of cleaning formulas to get those stains out that children seem to pick up."
"I still maintain that the model works best where the cost per-use of a product is very high because it is used infrequently or is incredibly expensive to buy."

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