Rent the Runway Online Outlet Enhances Customer Experience with Offline Stores - eMarketer

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Rent the Runway Online Outlet Enhances Customer Experience with Offline Stores

November 26, 2014

Jennifer Fleiss
Co-Founder and Head, Business Development
Rent the Runway

Rent the Runway, an online service that provides designer dress and accessory rentals, expanded in 2013 beyond pure ecommerce into brick-and-mortar stores. Customers try on dresses and accessories in-store by appointment, wear the rented items and ship them back. Jennifer Fleiss, co-founder and head of businesses development at Rent the Runway, spoke with eMarketer’s Elyssa Goldberg about the decision to open brick-and-mortar stores and the challenges and benefits that accompany merging a traditional retail model with technology.

eMarketer: How do customers usually find Rent the Runway?

Jennifer Fleiss: Word of mouth has been a key driver of brand awareness. Rent the Runway is an inherently social concept because when a woman is at an event and gets a compliment on her dress, she proudly starts talking about where she got it. Our first standalone, street-level store has also driven a large volume of new customers. Some women who are new to Rent the Runway find that not being able to try on the dress well in advance of an event can be a hurdle, which is one value our stores add to the customer experience.

eMarketer: Is there a different profile for a woman making an appointment and shopping in-store vs. one who buys online?

Fleiss: The Rent the Runway customer is typically a young professional with an active social calendar who lives in a major metropolitan area. We often find that women who come into our stores for an appointment are already members of Rent the Runway but haven’t rented yet. These customers benefit from being able to try on the dresses and work directly with one of our stylists to ensure they are comfortable with the rental concept. And they are often more confident with renting online after their initial store appointment.

eMarketer: Rent the Runway was first an online-only business. What have been some of the biggest challenges you have faced opening a brick-and-mortar store for the first time?

“Every dress that the customer tries on gets stored in her ‘Virtual Closet’ along with notes from her stylist, which she can access at any time.”

Fleiss: Since we are relatively new to physical retail and have a unique model compared to most traditional retailers, we are still experimenting with and iterating on the practices that work best for us. We built out expertise in retail staffing and merchandising layout.

In terms of the in-store experience, we have incorporated technology to make the customer’s transition between our online and offline platforms as seamless as possible. For example, every dress that the customer tries on gets stored in her “Virtual Closet” along with notes from her stylist, which she can access at any time on her online Rent the Runway account.

eMarketer: How did you decide on store locations?

Fleiss: We have found that opening stores in cities where we have a solid customer base helps bring awareness of our brand to new customers via existing networks. In terms of locations within those cities, we have looked at customer data to determine things like which ZIP codes host the most of our customers’ residences. We were lucky to open a store in the Flatiron District, one of New York City’s major shopping areas.

eMarketer: Tell me about the service customers receive in-store that they don’t online.

Fleiss: Our aim is to provide our customers with a high-touch experience that they might not get at a traditional retailer and that is also difficult to get online. The full experience for us means working one-on-one with a stylist to learn how the process works and discover new designers and trends that they may not gravitate toward on their own.

Thus far, customers’ strong demand for appointments and the deliberative process of trying on various dresses for a special event have led to an appointment-based model.

eMarketer: Do customers buy more online or in-store? Do the items they purchase vary between online and in-store?

Fleiss: Customers tend to place orders with a higher average value in-store than online. The accessory attach rate is also higher in-store where women are working with our stylists to find the perfect head-to-toe looks.

eMarketer: What’s the biggest surprise opening a brick-and-mortar shop?

Fleiss: When we opened our first store at our headquarters in Soho, we were surprised at how high demand was. We didn’t predict just how much promise physical stores would have for our business from a profit perspective.

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