In 2009, two Harvard grads built the Netflix of cocktail dresses and accessories, Rent the Runway. Except that lending cocktail dresses is more complicated than renting out DVDs. DVDs are one-size fits all, but dresses must fit the recipient and arrive without stains or rips no later than the date they were rented to be worn. For stains and rips, Rent the Runway built an operations warehouse that boasts the largest drycleaner in the U.S. To gain consumer confidence about fit and arrival time, Rent the Runway is opening stores – or rather showrooms where shoppers can pay a $25 fee to try on various clothing. The first popup shop was at department store Henri Bendel, and now Rent the Runway has four freestanding stores where customers can drop off, exchange and pick up their rentals. The store also offers same-day try-on at its locations.
In an interview with Apparel, Rent the Runway Jennifer Hyman said many of the company’s in-store customers are members on the site that hadn’t made a transaction yet. Before visiting the stores, they were intrigued but hadn’t gotten over fears of incorrect sizing or items being late to arrive. For online purchases, Rent the Runway offers a backup size, but the store offers more assurance as consumers can try on multiple sizes and alternate styles.
In L2’s Death of Pureplay report, Rent the Runway has a high integrated fulfillment score relative to the number of its stores. Evolved e-tailers must balance the inventory of their fulfillment warehouses with that of brick-and-mortar location, a challenge that becomes easier as their footprints grow. (Yelp reviews for Rent the Runway rental experiences suggest the brand must better sync its online and offline presence.)
Despite limited expansion (and negative customer experiences), stores are already adding to revenue. Rent the Runway stores see higher conversion rates and average order values online.