Rent the Runway

Building off of an established business model familiar, even to those not-so-interested in fashion, (think Netflix) the basic premise of Rent the Runway is that women want -- but cannot often not justify purchasing -- the newest, trendiest, most beautiful dress for whatever special occasion is up next in their social calendar (best friend's wedding, birthday party, etc). Here is where Rent the Runway comes in. Here's how it works:

• Rent a designer dress for $50-$200 for 4 nights (most would sell retail for well in excess of $500)
• Product shipped directly to customer's doorstep
• Upon wear, one drops the dress in a prepaid envelope (dry-cleaning is included in the price) -- though extra insurance will run you $5 and if destruction of the dress should occur, the wearer must bear full replacement cost

Immediately, however, this should raise some key questions/concerns for an fashion-conscious lady! How do I know if it will fit? What if I don't like this dress when it arrives? What if it needs a little alteration? Importantly, RTR seems to have thought of just about everything:

• On-call stylists are available -- both via chat and telephone
• An extra size is added in, free of charge, and, should neither fit, there is a 24-hour return policy
• An extra style may be added in for a bargain $25 additional cost
• Finally, all dressed come with a garment bag and a "fit kit" (double-sided tape, bra strap adjusters, deodorant remover)

While, as a girl interested in fashion, I have long followed businesses of this nature, a few things really stood out, regarding RTR:

• Started by 2 recent, young, female Harvard Business School graduates
• Attained early financial backing from Bain Capital
• As of the end of their testing phase in November 2009, claimed 20,000 interested members (as of now, a visit to their site shows that one must "request membership" as a waiting list still exists)
• An extensive list of perks (see above!) that seem to have taken the best-of-the-best from similar, tried-and-true business models and really demonstrated their understanding of the target market
• Finally, impressive (and positive) press coverage for such an early-stage company ... from the New York Times and ABC News to the Daily Grommet and a variety of coverage in blogs/Facebook/YouTube

Despite the tough economic times, it is interesting to think about similar companies that survived the downturn (think BagBorroworSteal or I'mOverIt). A sample of two articles below, one from the WSJ and the other from BusinessWeek, profile several of these companies circa 2007 -- and a quick web search reveals that the vast majority of them are still around.
http://www.businessweek.com/the_thread/techbeat/archives/2006/03/bag_borrow_or_s.html
http://online.wsj.com/article/SB118661263001392292.html

Finally, I will be interested to see how the membership aspect plays out for RTR. The air of exclusivity is interesting but, as other businesses have done, it may be eventually attractive to move to a cheaper "base" membership while also developing a more expensive option to begin "up-selling" loyal, established customers. Regardless, I am looking forward to signing up and hopefully getting off the waitlist in time for summer party and wedding season :) !!!