Haute Couture, No Postage Necessary
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?
Rent the Runway is a great idea. Kudos to Jennifer Hyman. With the economy taking a toll on everyone, the ability to rent, rather than buy, an expensive dress should have natural appeal.
With a good variety of dresses from a number of designers, RTR has a great chance at success. My only question is about fit. Are customers allowed to have the dress altered slightly to provide the proper fit?
As to Jeff Roster’s comment, c’mon Jeff, this isn’t the dawn of the Internet. Consumers know that they have to factor in shipping time when placing an order.
My first impression was, “What?” Then I saw the 20,000 customers signed up and that turned to “Really?” My first thought was “Yeah, what happens when the mail screws up?” But then I thought you could easily take care of that problem by adding a function on the site where you could input the date of the function and event, and it would tell you when you should place your order. They would need an ironclad guarantee or some sort of incentive to cover that issue but overall, if they could get 20k to sign up, then it must be working.
I wonder how many turns each dress can take before it starts to deteriorate and how many rents it takes for them to make money. Interesting business model, though.
This is one more example of the delicate balance between tight budgets and aspirational lifestyles. From Walmart’s catchphrase (“Save Money. Live Better”) to rental couture-wear, this appears to be a trend for the long haul. The retail winners for the foreseeable future are those who can successfully communicate a value message as well as a trade-up brand position.
Interesting question for the group: does the cachet of a designer gown go down when everyone can have one for the big event? Love the model and heck, I may sign up myself but I’m curious how the luxury players will keep themselves a luxury and set themselves apart. Mass luxury has damaged a lot of brands–interesting to contemplate how to balance these factors.
Renting tuxedos has made sense for men for years. So why not?
Fabulous idea!
Two thoughts:
1) I love how the comparison is to Netflix, rather than to a common, analogous, but less fashionable business model for renting expensive clothes that has existed for years: tuxedo rental. Of course, this has the online component, but still, it doesn’t seem that different to me (should tux rentals evolve to an online or hybrid, Blockbuster-esque model too?). Then again, I am neither a woman nor a fashionista!
2) How do you know if the dress is going to fit–or look like you think it will?
Another good idea gets better with online service. In many cities, there are evening wear rental companies for women’s clothing. Comparing the value of spending several hundred dollars for a “nice” dress, that likely won’t be worn again or renting something elegant and unique, many women have chosen to rent. Starting with formal gowns for special events, like bridal attendants, holiday and fundraising galas, this idea has a lot of appeal. “Rent the Runway “just makes it more efficient with a great selection reaching more clients than a single-site store.
Jennifer Hyman is going to have a booming business on her hands. I relate it to the women who buy expensive purses then sell them at the end of the season on eBay. Except this is even better because the dress can be worn multiple times before it is out of season and sold at the “end of life.” This is one smart lady with a fantastic idea.
Is she looking for investors? If so, call me!
I find this interesting that the only concerns about the fit of the dress was expressed by the men.
Great idea following in the footsteps of Netflix, Zappos and other innovative internet retailers. The really operative question will be around the handling of the inventory. Can this retailer turn their rentals enough to get a reasonable return on investment?
Knowing very little about fashion, I will bet on this team to do it correctly. There certainly will be challenges, but consider the choices they can give a woman that can only otherwise be found in a marathon of store shopping. And the woman never has to ask herself “When will I wear this again?”
It’s certainly an innovative idea. Having rented a tuxedo only a couple times in my life, it leaves me as no expert. Mrs. Scanner will have to weigh in on this one.
It does sort of run contrary to the discussion on casual entertaining a few days ago. Not much need for a $2000 dress for that.
It likely has a limited market but if you can serve 20,000 customers just starting out, it is a market.
Now, I wonder if they’d rent Carhartt wear for those couple times a year that I need it? Can’t let the women have all the fun, can we?
Here come the sour grapes. I love the idea of being able to rent a dress for a special occasion but do not share everyone else’s apparent enthusiasm for the success of a web-based model. Too many potential pitfalls. How many women, after all, are sure enough which dress they will look best in to order it without trying on a whole selection? What happens if the dress arrives and you just don’t like it? Or what if you see the one you want online and they don’t have your size? Will there be several of each style available to allow for several renters? And what if someone (or several others) turn up in the same dress?
The Times’ point about the business needing to rent each dress enough times to cover costs also concerns me. Unlike Janet, I definitely would not invest. This seems like a good idea on the surface that will not stand the test of time although I love Scanner’s suggestion about broadening the range to include Carhartt or other gear that people might only want to wear occasionally.
Well this beats the hell out of buying the prom dress today and returning it tomorrow (after the prom, of course). I really see thousands of ways this idea can fail. Unlike renting DVDs, haute couture has a rather high replacement cost. Are you gong to require renters to buy insurance? If so, who would underwrite it? Would insurance exceed the cost of the rental?
I think there are many acceptable alternatives available. Too many to allow this business proposition to work!
I beta tested Rent the Runway and covered it yesterday on my blog – retailya.com. Honestly, I don’t think The Times article did the service justice.
With regards to the fit, RTR has done a great job addressing this challenge.
1. They provide sizing charts, along with detailed sizing information by dress with precise measurements to ensure you have the most information possible about the fit without being able to try it on.
2. All of their stylists have tried on every dress and have seen it worn on a large variety of body types so they know how the material falls, what is suited for what figure, etc.
3. Regardless, some dresses may need alterations. But with every rental they provide a “Fit Kit” which includes hem tape and other tools for tucking and shortening the dress. The hem tape works as well as an actual alteration and the dress takes its original length and shape after dry cleaning.