“But for everything else, you should just have that on rotation and have the ability to take risks and constantly have newness and variety,” she continued. “And that’s a subscription [to Rent the Runway].”
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Rent the Runway began as a rental service for special-occasion dresses, but the company has recently expanded its offerings to include everyday clothing. It has also introduced subscription models that allow customers to pay a $139 monthly fee for four rentals at a time.
“Women could have a closet on rotation, have unlimited possibilities of what to wear, and we’re finding that the average subscriber uses Rent the Runway 150 days of the year as opposed to reaching into her closet and wearing something,” Hyman told Cramer.
The CEO explained that her company is seizing on a “complete consumer behavior change” in which people are no longer seeing their closets as static storage facilities.
“Every single person around the world has this storage facility in their bedroom and we call it a closet, and 80 percent of the stuff in that storage facility is worn three times or less in its lifetime,” Hyman said. “So there’s an enormous amount of waste and kind of financial value that we’re placing in things that we don’t use.”