Rent the Runway. RTR. That was what everyone thought would be the future of fashion, no? Dump the closet congestion, adopt limitless fashion, help save the environment—all while looking gorgeous. Recently, RTR has appeared to test the waters of several styles. It’s obviously in search of the best match made in heaven! Now, they’re gambling heavily on a quick turnaround, pinning it all on an enormous increase in inventory investment. But is the solution really to double down on dresses and make everything pink? Or just the equivalent of wearing last season’s styles, crossing your fingers that nobody will see.

Inventory Overload: A Risky Bet?

RTR’s Chief Executive Officer, Jennifer Hyman, is certainly no stranger to a bold move. She’s programming the biggest ever inventory investment for 2025, aiming to double its current size. That's a lot of stuff. It’s as if Marie Kondo just took up hoarding. The goal is to grow into new rental verticals – tennis, surf, ski – to keep us playing 365 days a year. Makes sense on the surface. But here's the rub: what happens when that tennis dress is so last Tuesday? Fashion moves at warp speed. Will RTR be left holding the bag with stacks of unsold, unrented garments? Otherwise, it would turn into a logistical and financial hellscape.

Think about it. But next door at Prada, things couldn’t be going better, propped up by the success of Miu Miu. They're not throwing everything at the wall. They're strategically cultivating brands. When it comes to acquisitions, RTR must start to challenge themselves with the question: Are we curating strategically, or just acquiring? Are they creating a future brand experience or simply a new distribution center? Will this investment really create loyalty, or just more storage expense and risk of obsolescence?

Nuuly's Shadow: Competition Intensifies

RTR isn't playing in a vacuum. Rivals such as Nuuly, Urban Outfitters’ rental business, are already breathing down their necks. Nuuly provides an alternative, a more subscription-friendly model that meets the consumer where they are at today. They target a more limited assortment of products at a lower price point.

The emergence of these competitors has made RTR’s gamble even more reckless. They have a lot to show us in terms of demonstrating that their model is not just possible but better. Otherwise, they will risk being outgunned by even faster and nimbler competitors who are more nimble and innovative actors. It’s Blockbuster vs. Netflix, all over again.

  • Are they truly differentiating themselves from the competition?
  • Is their "endless closet" model still appealing in a world of fast fashion and even faster trends?
  • Can they justify the increased inventory investment when competitors are taking a more streamlined approach?

Hyman, like many importers, is now wrestling with the possibility of higher tariffs. She’s continuing to work with brand partners to discover positive ways forward. Tariffs are a huge pain. For one, they can artificially distort supply chains, dramatically raise prices and ultimately harm consumers. How will RTR navigate this complex landscape? Or will they be backed into a corner where they have to pass through the costs to subscribers, maybe even forcing them out the door? Or will they take the hit, putting even more pressure on their margins which are already stretched thin?

Tariffs and Tailoring: Unforeseen Complications

The styling service and customer service transformation. Using automation for routine tasks to expedite access to staff who can provide tailored, in-depth services such as welcome calls and outfit styling support? As exciting as it all sounds in theory, will that actually lead to a better experience for customers? Or will it feel impersonal and robotic?

It's like Nike's NFT debacle with RTFKT. They dove into a new sharing economy trend, got sued into submission, and were forced to shut it down. To accomplish this, RTR should take heed to avoid the same pitfalls. Innovation can certainly be a good thing as long as it’s strategic and well-executed.

Let's talk about the human element. Yet in a world dated by algorithms and automation, are we throwing the baby out with the bathwater? The personal touch, the genuine connection. RTR’s push for more automation, while likely making them more efficient, can distance customers in ways that leave them wanting the human touch.

The Human Cost: Are We Losing Connection?

I look back at my experience when I first signed up for RTR. I enjoyed the experience of going through the racks (online, obviously), finding new designers, getting tailored recommendations. Over the past several years, it seems that the customer experience has turned into a more transactional, impersonal interaction.

Now, will these glad-handing greeting calls and free hair styling sessions actually fundamentally move the needle? Or will they feel like empty gestures? RTR should be mindful and realize that fashion goes beyond clothing, it’s an avenue for self-expression, confidence, community and connection. What they need to do is discover a path that balances efficiency with empathy, automation with authenticity. Otherwise, they run the serious danger of losing the very thing that made them unique and special to begin with.

All in all Rent the Runway’s bet is a risky, high-stakes one. For some, doubling down on selection might just be the smartest bet in town. It has the promise to renew the brand, and by extension, enhance its market position. Or it might be an expensive blunder, resulting in overstocking, obsolescence, and eventually, extinction. The next few years will be pivotal for RTR. They need to fight through the bias to win back their crown as the rental runaway the true queen. I, for one, can’t wait to see how that goes, and am rooting for those guys to make it work. Because let’s be honest, who hasn’t dreamed of having an infinite wardrobe? All of this is fantastic, we just need to ensure that it does not turn into the never-ending RTR pain.

Ultimately, Rent the Runway's gamble is a high-stakes one. Doubling down on inventory could be a stroke of genius, revitalizing the brand and solidifying its position in the market. Or it could be a costly mistake, leading to overstocking, obsolescence, and ultimately, irrelevance. The next few years will be crucial in determining whether RTR can successfully navigate these challenges and reclaim its title as the queen of the rental runway. I, for one, am watching closely, hoping they pull it off. Because let's face it, who doesn't love the idea of an endless closet? We just need to make sure it doesn't become an endless headache for RTR.