Rent The Runway: dress hire – a success story of two Cinderellas | Предприниматель

Rent The Runway: dress hire – a success story of two Cinderellas

 Two friends from New York opened a web site designer dress rental Rent The Runway. During the year the project has brought millions of dollars in profits.

Jennifer Hyman, 30, and Jennifer Fliess, 27 years after Harvard Business School to tackle the serious women’s issue: there is nothing to wear, and a wardrobe full. They have created a site called Rent The Runway, which is proposed to rent designer dresses for a small fee, at the same price as the dress of the H & M. The girls opened the company in October 2009 and in March 2011 it became profitable. There are currently 1 million registered users, and their number is constantly growing – 40,000 new users per week. The site is so popular that the final balls and meaningful party girl dresses Exclusive Offers for a few months before the event. Graduate of Harvard’s definitely found his niche.

The idea of ​​creating Rent The Runway, Jennifer Hyman invented, looking at his sister Becky and her issue of choice. My sister was going to the wedding of a friend and did not know what to put on all her clothes had been captured in many pictures from holidays, and pictures – posted on the Internet. Becky flatly refused to wear dresses for a second time, and new it was not enough money. Then, to Jennifer, and got the idea to create such a site, if you take a DVD rental, why not rent dresses?

Foundation Bain Capital LLC has provided Jennifer Hyman and Jennifer Fliess $ 1.7 million of seed capital. Then they were funded venture capital investors: $ 16 million from Highland Capital Partners and Bain Capital of the same, and another $ 15 million from Kleiner Perkins Caufield & Byers. In March last year, growth in annual sales increased 10 times on average per week on site at customers produce 10 000 orders. Revenues for 2010 totaled $ 20 million, three times more than a year earlier.

At the moment, Rent The Runway has 25,000 orders from 135 different designers, the selection is diverse in every budget: have inexpensive dresses, dresses from fashion houses such as D & G, Nina Ricci, Moschino and Escada. With $ 50, the site can be hired to pick up something like Diane Von Furstenberg dresses cost $ 425. The most expensive cost, for example, dress from Hervé Léger, which is in the shop is $ 3500 and rent in Rent The Runway – $ 350. During the four days of hire is usually charged about 10% of the retail price dresses. For those who wears one dress is not more than two times the price is justified. To exclude the possibility that the dress does not fit with each ordered dress for free send a different size of the same model, but if the buyer is not sure what color he liked more, the site offers to another model of a different color to try on and compare for only $ 25. Rent The Runway also offers free advice stylists in the phone or via chat. You can also purchase insurance to pay for dry cleaning if the wine is spilled on the dress or some delicacy. Insurance will cost $ 5. If the dress is not to clean or repair, the customer must return the company of its full value.

Delivery to hire dresses and sending him back involved in delivery service UPS. Dry cleaning is carried out after each rental outfit. Today, for the delivery of Rent The Runway is the most vulnerable point in their activities. On its speed and reliability depends on many things – because if too late to dress, what zakazchitsa go to the event? According to the very same company, 2% of customers having problems with delivery.

Another delicate point is the rapid change in demand. Fashion can change so quickly that bought the dress does not have time to pay off and bring even more profit. Its just not be able to take on hire the required number of times over a short period of time until the last trend. According to Jennifer Hyman, this problem can be overcome by increasing popularity of the service. To other cities in the U.S. fashion comes with some delay, that is, from New York, where customers order the latest fashion industry news, dresses slowly moving to other states. Difference “in time” fashion world is about six months.

About a quarter of ordered it from the site of Rent The Runway make up the student. For this particular audience of entrepreneurs have developed a special approach. Before starting the project in April 2009, Hyman and Fliess conducted an experiment on their sokursnitsa – brought to Harvard campus full truck loads of clothes and gave students the opportunity to choose and hire any liked the dress. With this test, it became clear what dresses are popular and many of these students will be able to pay. At the same time, Jennifer Hyman clarified and future marketing strategy – selection of dresses for girls was virtually impossible without the approval of example, and friends. For example, when a student has to rent a dress Tory Bunch, it made two of her friends like to take.

Based on this experience, Hyman decided to use viral marketing to advertise the service Rent The Runway. She created a network marketing business with more than 200 students, who visibly demonstrate the ease of ordering dresses for hire. These “representatives” of the company engaged in the conduct of fashion-blogs, contests and demonstrations of social networking outfits. The main objective of their work – to attract new clients, in fact, most of them continued to use the services of Rent The Runway without further advertising, because once you try to wear an expensive dress for a party, go back to jeans desire disappears.

A significant impact on business success and Hyman Fliess has Facebook: «lit up” in a dress in the photos from past events, the dress circle of friends here have not dressed, the girls are sure will order more.

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