Closet in the Cloud: Ad Pitches Rent the Runway for Everyday

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Rent the Runway is growing up. The New York-based startup, which introduced the concept of renting dresses for special occasions when it was founded eight years ago, is going after a bigger share of the market than just proms, weddings and parties. On Monday, the company is debuting its first national campaign, touting its subscription service for everyday dressing.

"There's some element of brand awareness for Rent the Runway of being a business for special events where you can rent a dress, but business has moved so far beyond that," explains Jennifer Hyman, co-founder and chief executive. Indeed, the subscription portion of the business, which was first introduced last year, already represents over a third of Rent the Runway's revenue. In conjunction with the new campaign, the brand is introducing a lower-priced subscription where members can pay $89 a month to rent four pieces of clothing. The new offering will supplement the company's other monthly subscription of $159 for four items of clothing that can be swapped out an unlimited number of times each month.

The new campaign centers around the possibilities that abound when women no longer need to use their closet for apparel storage. In one 30-second TV spot, consumers use their closets for kids' band practice, as a workout room, and for karaoke. Rent the Runway, which began working with creative agency Wednesday on the new marketing over the summer, will also run out-of-home ads and podcasts and push the messaging via social media.

"We're making the point that in a world where your closet is in the cloud, and you have this constant access to a subscription to fashion, that your physical closet will become a relic of the past just like CDs, landlines, DVDs," says Hyman.

Since its 2009 founding, Rent the Runway has surpassed many of its startup peers in both size and profitability—Hyman said last year that the company had become profitable. The brand, which currently operates five retail outposts, employs 1,200 and boasts eight million members—the majority of whom are working professionals who live outside of cities. Last December, Rent the Runway raised $60 million in venture capital funding—in total, the company, which reportedly generated more than $100 in revenue last year, has raised over $176 million, according to Crunchbase.

"A large national campaign is typically a luxury that companies don't usually have, but they've raised a bunch of capital in the last year," says Sucharita Mulpuru, a retail analyst at Forrester. "Customer acquisition and growing that member number is a huge goal—the truth is, they have to show some growth."

Despite the new marketing, Hyman said there are no plans to hire a chief marketing officer. She declined to say how much the company is spending on the campaign, but noted that the budget for marketing, including public relations and email service providers, was previously three percent of sales.

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