Are Neiman Marcus and Rent the Runway meant for each other?
Neiman Marcus and Rent the Runway seem an unlikely match. The first is a traditional upscale department store that seeks to sell luxury goods at full price to an older customer base. The second is an online startup that rents apparel and accessories to Millennials who want to look like they walked off a fashion runway without paying the price of ownership.
Neiman Marcus today is opening a 3,000-square-foot Rent the Runway shop inside its store in San Francisco. The space will be used to display clothing and accessories available for rent along with complementary items for purchase from Neiman Marcus.
The goal of the exercise is straightforward: each company is hoping to attract new customers and gain insights they can use to attract similar shoppers on their own.
Neiman Marcus is in search of youth. According to Bloomberg, the average age of its customers is 51 compared to 29 for Rent the Runway. Neiman saw comp sales, which includes online and stores, fall 4.1 in its last fiscal year.
Rent the Runway, for its part, is continuing to explore a future for itself in brick and mortar. The fashion e-tailer, which launched in 2009, will have seven stores to showcase its offerings by the end of the year. Earlier this year, it partnered with Woodbury Common Premium Outlets over four consecutive weekends in May and June as part of the shopping center’s first-ever pop-up sample sale.
Jennifer Hyman, co-founder of Rent The Runway, believes both companies will benefit from the arrangement. In a past interview referenced by The Washington Post, Ms. Hyman observed that the items people rent are different from those they purchase.
“We’re in some ways running toward the shared economy instead of running away, because clearly the shared economy is here to stay,” Neiman Marcus CEO Karen Katz told Bloomberg. “Whether it’s Rent the Runway or Uber, any of the ways people are participating in the shared economy, it’s part of our world today.”
- Neiman Marcus Turns to Rental Startup to Lure Younger Shoppers – Bloomberg
- Why Rent the Runway is joining forces with Neiman Marcus – The Washington Post
- Neiman Marcus hopes to land some millennials with Rent the Runway – The Dallas Morning News
- Can pop-ups wake up mall traffic? – RetailWire
DISCUSSION QUESTIONS: Do you think Neiman Marcus and Rent the Runway will each benefit from their business arrangement? What, if anything, does this arrangement suggest about the future of “shared economy” retail in the U.S.?