A subscription online subscription service for women to rent designer dresses and accessories, found at Rent the Runway Store, September 12, 2019 in the US, New York, New York City.
Shannon Stapleton | Reuters
Rental Runway implements its membership plans, eliminating the unlimited rental option, as customers change clothes and how they purchase clothing during a coronavirus epidemic.
Even before Covid-19, operations have been undergoing changes for about 18 months, said CEO Jane Hyman.
However, the epidemic has spurred many of the company’s decisions and investments. It announced plans to permanently close its stores last month, turning its attention to digital and expanding its DropBox network.
“There’s of course going to be a segment of unlimited users who are very upset about this decision … and we didn’t make this decision lightly,” Hyman said.
Runway customers were allowed to pay 9,159 per month to rent from the unlimited option, to exchange as many items as they wanted, so they only had four items at a time. Now, they can choose from plans that offer four, eight and 16 items per month, with the ability to add additional pieces for an additional fee.
“We’ve seen 80% of people join us through Covid they’re choosing four or eight items per month,” Hyman said. “We think it’s important for members to pay for their use. Paying per use is also an economically viable decision. [us] Long-term. ”
Renting this switch should help the runway have strict control over its costs and ensure fast delivery for all customers, according to Hyman. She considers the move environmentally friendly by reducing carbon emissions with less shipments and less plastic packaging.
As it sinks into its unlimited option, Runway Rentals will offer customers the following:
- A four-item plan of $ 89 per month, with access to a slim-down version of items including casual and work wear.
- Month eight-item plan for 5 135 per month, with access to all runway inventory rentals, including formal wear.
- The 16-item plan for 199D per month, with access to all its inventory, is equivalent to four shipments of four items per month.
Rental Dodve states that 6% of its unlimited customers exchange more than 16 items per month and 70% of its unlimited members actually rent less than eight items per month. The company suggests that many existing users will be able to save money by switching to new plans.
According to Hayman, after an initial slump in subscriptions as soon as the epidemic began, business is starting up – a subtle sign that consumers want to get dressed again after spending months in pajamas and sweaty lives.
“August Gust is usually a slow moment for us, but in August we saw a really strong momentum in both acquisitions in the business and … people who stopped and then started coming back in really big percentages.”
Women returning to weddings, parties and other social gatherings are also starting to re-rent more formal formal clothes, he said.
“I think it’s a very difficult time to lead a business right now because of the amount of uncertainty.” “But what businesses like Runway Rentals have been forced to do is accelerate plans … from an overall-margin perspective. We’re a weak business.”
“I think a good company thinks about surviving an epidemic,” he added. “Because of this epidemic a great company thinks about how you can grow the business in a more strategic place.”
Renting the epidemic has led to an increase in new financing during the epidemic, but it lost its so-called unicorn status, making an initial assessment of its previous billion 1 billion valuation. It has collected about 80 380 million to date.
The new membership constitution of Runway is set to debut next week, the company told customers on Thursday. It states that existing unlimited members will have a phase of their plan until the beginning of next year before choosing a new one.
Runway fare is five times CNBC Disruptor 50 Company, recently No. 5 On the 2019 list.
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