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Pack Lighter in 2020: Fashion Rentals Aim to Change the Way We Travel

[RETHINK Retail] — Tired of packing for business trips? W Hotels and Rent the Runway have teamed up to help travelers save anywhere from $30 to $50 on checked luggage and “nothing to wear.” For $69 per day, travelers can pick four outfits from the Unlimited Closets of these designers and have the clothes shipped to their hotel rooms.

When travelers leave at the end of their stay, they’d just drop the rental outfits off at the Service Desk and check out per usual. Travelers can head back to the airport hands-free and don’t have to worry about staring at the conveyor belt in their next destination. While airports may lose travel bag profits from this, this retail and hospitality partnership could become a profitable new trend in the shopping arena.


Finding a loyal retail base for online subscribers

From an eco-friendly standpoint, having the $69 option to choose between 10,000 styles from more than 400 designers makes sense. Once subscribers are done with the outfit, someone else can wear it. On our own, U.S. consumers are responsible for purchasing approximately 66 garments annually, which too often end up ignored in donation centers or discarded in landfills.

Unfortunately, technology hasn’t quite caught up with retail in the form of virtual fitting rooms. This means one (or more) of the outfits that show up may or may not fit the way the traveler wants it to, or just looks better on the hangar. And travelers could find themselves in brick and mortar retail stores all over again. So it’s more of a betting game to find the outfit that works for the fashionista renter’s needs.

“If it’s a loyal Rent the Runway customer who’s familiar with the brands they sell and knows the fit and styling, then maybe there’s a better chance,” said Paula Rosenblum, co-founder of Retail Systems Research, during a recent episode of the Retail Rundown. “But just as a naked concept, I think it’s risky.”

Brandon Rael, operations expert and the Director of A&M’s Consumer and Retail practice, agreed with Rosenblum when it comes to the “risky” rate of overall online returns. However, he was a bit more optimistic regarding this retail rental partnership.

“It has the ability to scale and could be successful,” said Rael during the same episode of the Retail Rundown. “It’s all about curating experiences and knowing the customer. … From a PR perspective, it definitely generates interest in the brand and shows it’s somewhat scalable in certain markets. But the success rate depends on the execution and the choices they provide their customers.”


The highs and lows of the fashion rental industry

As with many startups, there were a few hiccups early on in September of this year. On Sept. 13, the company stopped taking any new subscribers or new event rentals. The clothing platform hit a brick wall trying to keep up with customer demands versus the available inventory. But by Oct. 8, they were again accepting new subscribers. However, in a retail culture that has grown used to 24-48-hour shipping, asking subscribers to wait one to two extra days from scheduled shipments may have left a few with grudges.

In all fairness, Rent the Runway is unlike other traditional retailers who are starting to rent out clothing. They’re handling outbound shipments, dry cleaning, inspections and returns. If anyone from the subscriber to the warehouse logistics team is behind schedule, this would affect the next subscriber’s order. And sometimes it hits the higher-ups, too. During the shipment hoopla, Marv Cunningham—Rent the Runway’s head of supply chain—stepped down after only working for the company for less than a year.

However, Business of Fashion reports that the company still opened a second processing center in Arlington, Texas in July of this year. It also raised more than $300 million in funding and has a $1 billion valuation. And some of those funds are going to the “nation’s single largest dry cleaner” to magically wipe out everything from makeup, nail polish, meat grease and wine before that rental outfit can reach the next subscriber. Trained spotters can take care of cleaning up to 30 dresses per hour.


The future of retail-hospitality partnerships

For interested subscribers who don’t live in Chicago, New York City, San Francisco, Santa Monica or Washington D.C.—where physical rental stores are located—online subscriptions are their best bet. And for founders Jenn Hyman and Jenny Fleiss to start an online rental business like this with no fashion or technology background was brave in itself. Ten years later, the company is still bringing customers in droves. It remains to be seen what will come of its partnership with the W Hotel. But in an industry such as hospitality that prides itself on excellent customer service, this business move seems like it’s a step in the right retail direction.