By David Moin. Source: WWD.
Eight years ago, Rent the Runway started with “a simple promise.”
“Stop buying things you only wear one or two times a year and instead rent a designer dress to look and feel amazing for a special moment in the your life,” said Maureen Sullivan, chief operating officer of Rent the Runway.
But there’s nothing simple about the company’s expanding assortment, menu of services and retail locations.
Rent the Runway, Sullivan said, seeks to “transform the modern woman’s relationship with her closet. It’s the only part of our lives that hasn’t evolved with the digital transformation of our lives.”
In her overview of Rent the Runway’s growth path and customer profile, Sullivan cited services such as the Style Studio, where customers pay for one-on-one appointments with stylists. The Style Studio enables RTR to “really collect every single piece of data, from fit, to measurements to brands that she likes, to her social calendar, to her work dress code. We know whatever marketing communications we push [out] to her in the future are highly customized, and the time and investment she made in that appointment really pays dividends in figuring out what to rent in the future.”
Sullivan also cited the Style Pass where if a customer commits to renting three times a year, each rental is $65.
There’s also the partnership with Neiman Marcus. Currently, one Rent the Runway shop operates inside the Neiman’s flagship in San Francisco, though additional shops are being considered for other Neiman’s locations.
“All of our growth so far has been organic,” Sullivan said. “Our growth has been fueled the good-old-fashioned way — word of mouth, testimonial, referral.”
RTR customers “are really an engaged community,” Sullivan said. “One in six post a detailed review of the item they rented and it’s very detailed. Customers share their weight, their bra size. It’s the number-one part of our experience that our members love, the biggest driver of conversion.”
According to Sullivan, the average age of the Rent the Runway customer is 29 years old. She’s constantly on her mobile device and she wants convenience but is not willing to sacrifice personal style.
“We power the closets of many age demographics,” from 18 to 80-year-olds, Sullivan said. “One commonality is that they work — 90 percent are working women. She values convenience and time as her most valuable asset. We hope we are creating the next generation luxury customer….Ninety-eight percent of our customers are trying a brand for the first time when they rent with Rent the Runway.”
Currently, RTR has 450 vendors, a wide range of rental prices from $30 to $400, and 50 percent of the inventory is comprised of separates and accessories. Much of the rest of the inventory is dresses. “We have it all. The demand for separates is now fueling a new engine of growth,” Sullivan said. “The modern women isn’t wearing an Eighties power suit with a shell underneath to the office any longer.”
The company is not without its challenges. For example, Sullivan acknowledged that it’s tough to keep the store associates up to speed on all the new products constantly flowing into the assortment.
Another challenge is to provide a smooth “handoff” of customers from the Rent the Runway shop inside Neiman’s, to the Neiman’s store team, and to figure out what products they might prefer to buy to augment what they rent. “We see them spend a lot of time in Cusp [Neiman’s contemporary area] and thinking about investing in a great pair of Rag & Bone jeans to go with the three separates she rented. The next evolution of our ‘attach’ strategy is figuring out what for-sale products our customers are interested in.”
RTR is also working on providing enhanced customized communications with customers and increasing the speed of delivering and returning products so it can re-rent products as fast as possible. One surprising byproduct of the RTR business model is that the company has become “the world’s largest dry cleaner,” Sullivan said.
“We continue to push the boundaries of how customers react in our store experience [the RTR web site indicates seven brick-and-mortar store locations] and how we are empowering our associates with technology,” Sullivan said. “While technology is at the core of everything we have done, in the end for us, it’s really about our incredible community.”