The company’s push into brick-and-mortar locations (they now operate seven) signifies a shift from the strategy of leveraging only online platforms to reduce expenses and offer items at a lower price. How has Rent the Runway done differentiating themselves with their operating model? In my opinion, it’s a mixed (shopping) bag. And, the convenience of shopping from the comfort of your own home via the internet, as opposed to having to travel to your local mall, has been a significant differentiator over competitors. The company has excelled at leveraging big data and online customer reviews to tabulate which dresses women are renting for which types of events, then forecast demand to plan shipping, dry cleaning and storing of inventory. The company has turned the fashion industry on its head by offering this service nearly entirely online! Their website and App was the only method by which customers could interact with the company from 2009-2014, when RtR opened their first standalone store. Operating model – Rent the Runway utilizes sophisticated proprietary software algorithms to juggle more than 65,000 dresses and 25,000 accessories across the United States. Their goal is to “build the Amazon of retail”, where they act as a “marketplace for retailers and brands to rent unsold inventory instead of shipping it off to discount outlets”. In contrast with the typical idea of “buy a dress, wear it once, then stash it in your closet until you give it to a cousin”, this company acts as the closet where one can choose from a seemingly endless supply. They partner with premier designers to source inventory, then rent them to customers for 4- or 8- day terms, long enough for that special occasion. Rent the Runway seeks to capture this highly fashion-conscious market by providing an opportunity for one-time usage at a deeply discounted price. Rent the Runway (“RtR”), a “fashion company with a technology soul”, was founded by two HBS students seeking to provide women with access to luxury clothing and apparel by renting clothes and accessories, as opposed to purchasing.īusiness model – The average American woman buys 64 new pieces of clothing a year – 50% of which she’ll wear once. Often overheard at galas, weddings, and other upscale events, fashion is at the forefront of many women’s minds as they seek to be fetch.
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