In a recent interview with Reid Hoffman, Co-Founder and CEO of Rent the Runway Jennifer Hyman described her business as a ‘discovery platform’. Rent the Runway enables people to rent fashion items, either as part of a subscription or as a one-off. Rent the Runway is a two-sided marketplace with users renting items from specific (high-end) fashion brands.
Hyman’s points in about how Rent the Runway uses data was what piqued my interest in her interview with Hoffman:
Behavioural data – Capturing data each time customers use Rent the Runway, which is approximately 80 days of the year or 3-4 times per week. Hyman explained that Rent the Runway customers treat fashion items much more as a utility. Useful insights can be gleaned from standard behavioural data and Hyman listed examples such as knowing when a customer has changed in size, is pregnant or has changed jobs.
For example, in 2017 Tanya Taylor introduced an extended sizing brand using Rent the Runway’s data. This is now the company’s top-performing plus brand. Or take Badgley Mischka who created 14 dresses inspired by one style popular on Rent the Runway in 2011 and which is still in rotation today.
Rent the Runway knows which items people have liked (‘hearted’), disliked and saved for later; how many times people have worn each item that they’ve rented; how items fit in specific areas of their body; the perceived quality of the item; and the occasion for which she wore it, immediately when the item is returned. Its customers will submit images in reviews and provided detailed responses to post-rental surveys.
Through the platform, fashion designers can also run targeted experiments. These trials are designed to reduce risk, for example when designers want to try out a new clothing line .
Warehouse data – Data about clothing that is being processed and repaired at one of the Rent the Runway fulfilment centres provides brands that operate on the Rent the Runway platform with valuable wear and tear information about their products. This data helps brands improve the ways in which they manufacture their products or change the materials that they use.
Personalisation – Naturally, customer behavioural data is used to provide personalised recommendations. Interestingly, Rent the Runway also uses customer behavioural data to personalise emails, letting customers know about the positive impact they’ve had on the environment by renting instead of buying.
Sharing data with brand partners – Finally, the ability to share behavioural and warehouse data with brand partners has become an important pillar of Rent the Runway’s business model. Similar to companies like Stitch Fix and thredUp, Rent the Runway shares data insights with its brand partners to help them improve design and manufacturing of their products. Also, brands can thus create new and exclusive designs based on Rent the Runway data.
Main learning point: In the Reid Hoffman interview, Jennifer Hyman – Co-Founder and CEO of Rent the Runway – gave a good insight into how her business utilises data. More than a two-sided marketplace, Rent the Runway is a data-driven platform; using data to benefit both its consumers (personalised recommendations) and its brand partners (customer and product insights).
Related links for further learning: