A New York Times piece equates it with Netflix. Rent the Runway is a new service that allows women to rent $1,000 haute couture dresses for a fraction of the cost of buying. When done using the garment, the consumer just puts the dress back in a supplied envelope and sends it back to the company.
The idea behind the company is pretty simple. Make high-end fashion accessible to a much larger group of consumers at a time when shoppers are looking to justify purchases both large and small. Rentals run from $50 to $200 for a four-night loaner. The shopper needn't worry about cleaning the dress since dry cleaning is included in the price.
Julia Harris, a graduate student living in New York is a Rent a Runway customer. She told the Times, "You just wear it and drop it back in the mail to them. I don't spend $2,000 on a dress regularly, so it's nice to be able to wear some of the more expensive brands I wouldn't be able to buy otherwise. And instead of just buying one or two dresses for this season, I can still have a lot of things to wear."
Although the company has just launched, more than 20,000 women have already signed up for the service, according to its owners.
Jennifer Hyman, a co-founder of Rent the Runway, said she got the idea for the business watching her younger sister trying to decide on what outfit to buy for a wedding she was attending.
"Here was this young girl who loves fashion and was willing to spend a good portion of her salary on a dress that she's only going to wear once or twice, and I thought, there has to be a solution for this," Ms. Times.
Jeff Roster, an analyst with Gartner, sees the comparison with Netflix but says the stakes are higher with Rent the Runway. "If my movie doesn't come on time, I might be mad, but life goes on. But if my fancy dress for a big important event doesn't arrive, that's a customer service problem like you've never had before."
Discussion Questions: Is the timing and market opportunity right for Rent the Runway? What are the keys for the company to reach its full potential as a business?