FMIP E2 Group B Team 8 - Rent The Runway (Nitya Vashit 21003292) PDF
FMIP E2 Group B Team 8 - Rent The Runway (Nitya Vashit 21003292) PDF
FMIP E2 Group B Team 8 - Rent The Runway (Nitya Vashit 21003292) PDF
Runway
MA SFM Group B Team 8
Duoduo Wei
Nitya Vashist
Simran Sanghavi
Sulan Chen
Tingrui Zhong
Table of contents
1. Company Introduction & Characterisation
2. Target Audience
3. Positioning & Competitor Analysis
4. Target Audience
5. Introduction to the Market & Pestle
6. Current Situation
7. SWOT Analysis
8. Primary Research
9. Customer Journey Map
10. Current Strategies & acquisition of retention
11. Problem to solve
12. Strategy Overview
13. Organizational Recommendations & Resources
14. Marketing Recommendations & Resources
15. Control-KPIs
16. Conclusion
About Rent the Runway
Found in November 2008, Rent the Runway is a subscription
model business that allows customer to rent or buy (resale)
designer styles for work, weekends and events. It is a public
(october 2021) with a female Founder/CEO, COO and CFO.
They allow customers to either purchase their subscription
models or rent a-la-carte. Mission: to empower women to
feel their best every day. Their currently have 19,000 styles
and over 780 brand partners. 84% of the revenue comes from
subscribers. They had 134,998 Active Subscribers and 177,213
ending Total Subscribers at the end of the first quarter of
fiscal year 2021 (churn rate: 23.8%)
Behavioristic
Psychographic
75% Socialize 2x+ Per Week
Chasing fashion trends Wear a variety of styles
Prioritize value for money Pursing well-known brands
Concerned for the environment Rarely consume expensive clothing
Endorse fashion rental
01 Market Analysis &
Positioning
Competition analysis
Subscription
3 3 1 2 1
plans
Get discount
✖ ✔ ✔ ✖ ✖
for purchasing
Low price High price
One time
✔ ✖ ✖ ✔ ✔
rental
Flexible rental
✔ ✖ ✔ ✖ ✖
time and mode
Number of Subscription
Unlimited 1 Unlimited Unlimited
swap requirements Less flexible
RTR USP
Additional
rentals
Subscription
requirements
Pay a one-time fee
Two extra items
limited
Pay a one-time fee Pay a one-time fee Variety of luxury brands
Flexible subscription models
AI powered personalization & discovery
Scope of the market
37%
of fashion executives expect occasion
$3.3B
The global online clothing rental market
27%
Fashion and apparel each achieved 27%
wear to be a top-three category for reached a value of US$ 1.9 Billion in 2021 and average monthly subscriber growth in 2021
year-on-year sales growth is expected to reach $3.3 Billion by 2027. compared to 2020.
(McKinsey State of fashion, 2022) (Business wire, 2022) (State of subscription commerce, 2022)
Rental
Subscription RE-Sale
Opportunity: Threat:
1.Better use of data: more personalization 1.Increasing number of competitors
2.Omnichannel Marketing Strategy: engage more with 2.Quality & Hygiene Control
social media 3.Decline in global economy:changing consumer behavior
3.Continue growth of share-economy 4.Customer's’ common concerns about renting
4.Improving in logistics: faster delivery & easier return
5.Globalization: provide service in more regions and
collaborate with more international brands.
Primary Research
1.Questionnaire 2.Focus Group & Netnography
Emergency Purchase
Are you an RTR subscriber? Hygiene
Female Second Hand DiversityTravellers
Logistics
Yes
No
Special Occasion
In mid
20s
Never heard of it Deadline to return Fitting Issue
Not Available
Based Gaping holes
in USA Inclusive in sizing
& UK Key reasons not to subscribe: Delivery errors
● Want to own clothing instead
of renting Stinks Sold out
Unnecessary recurring
●
expenses Late fees Didn’t ship
Increasing ethnic relatability Re-defining their subscription model Word of mouth marketing
Diverse models: Increase from 40%-45% (2019-20) From 1 unlimited swaps model to 3 different 81% of subscribers have shared RTR with
subscription models at least five people
Increased penetration of ethnic minority designers
from 4%-10% (2020-21)
Resources: Online customer service team; IT development Resources: product cleaning team, product team, quality
investment; Official web design input. control team
Marketing (External)
1. Use data acquired through customer 1. Align influencer collaborations with what the
journey to provide one to one, consumer relates to in terms of demographic, age
personalized omnichannel shopping and nudge
experiences. 2. Partner with businesses to grow acquisition
channels (Ex: ThredUp)
A/B test campaigns focused on a single Avoid misinformed shopping resulting in a negative experience
offering Enable conversation
Increase purchase confidence
Resources: social media team, content
creators Resources: Product team, stylists, inventory team, investment in
technology
Additions:
Detailed description
Styling advice
Monetary benefit
Objectives & KPIs
Objectives KPIs
Grow by 60-70% at the end of 2022 fiscal year when compared to 82% end of
Customer acquisition fiscal year 2021 (reason for lower target: to focus more on retention as
acquisition cost and current churn rate is higher)
Increase to 20+ compared to a current NPS of 17 (46% promoters, 25% passives, 29%
Net Promoter Score detractors)
Conclusion
Rewrite the mission statement:
OLD - Our mission is to power women to feel their best every day.
NEW - Our mission is to enable women to feel confident and fashionable through ever evolving variety,
transparency, relatability and our customer-first approach.
In terms of revenue and subscribers, Rent the Runway has recovered from Covid-19. It began as an
occasion-only rental business and quickly became a casual, work, and family-oriented rental service.
However, the organization didn’t take into account the resources needed and adopted strong
organizational infrastructures to support the expansion.
Rent the Runway has a significant scope to internationalize due to the demand in areas outside the
US. However, this is in the far future as they will have to cater to positive customer experiences to
the US market before they could expand.
The organization can also benefit by A/B testing and executing marketing strategies with different
values/ concepts as the center of attention. This will help convey the brand identity better and reach
consumers with multiple motivations.
Thanks!
Any questions?
References
● Almquist, E., Senior, J., and Bloch, N. (2016), The Elements of Value: Measuring and delivering - what consumers really want. Harvard Business Review, [Online]
Available at: https://hbr.org/2016/09/the-elements-of-value. [Accessed 30 Oct. 2022].
● André Cavalcante, S. (2013). Understanding the impact of technology on firms’ business models. European Journal of Innovation Management, 16(3), 285-300
● Bainbridge, n.d. Insights from Rent the Runway’s S-1: Breaking Down the Company’s eCommerce Strategy, Bainbridge. [Online] Available at:
https://www.bainbridgegrowth.com/post/rent-the-runway-s-1#:~:text=There%20are%2097.614%20active%20subscribers,%2C%20which%20is%208%25%20annu
ally. [Accessed 7 November 2022].
● Berg, A., (2022). How current global trends are disrupting the fashion industry. McKinsey, [online] Available at:
https://www.mckinsey.com/industries/retail/our-insights/how-current-global-trends-are-disrupting-the-fashion-industry. [Accessed 7 November 2022].
● BUSINEEWIRE, 2022. Global Online Clothing Rental Market (2022 to 2027) - Industry Trends, Share, Size, Growth, Opportunity and Forecasts - ResearchAndMarkets.com.
[Online] Available at:
https://www.businesswire.com/news/home/20220825005571/en/Global-Online-Clothing-Rental-Market-2022-to-2027---Industry-Trends-Share-Size-Growth-Opportunity-and-For
ecasts---ResearchAndMarkets.com [Accessed 10 November 2022].
● Carbon Capitalism. (n.d.). [online] Available at: https://capitalaspower.com/wp-content/uploads/2021/09/dimuzio_2015_carbon.pdf.
● Chan, E. (2021). Is Renting Your Clothes Really More Sustainable? [online] British Vogue. Available at:
https://www.vogue.co.uk/fashion/article/is-renting-your-clothes-really-more-sustainable.
● CHEN, C., (2022). Rent the Runway’s Long Road Ahead to Profitability. The Business of Fashion, [online] Available at:
https://www.businessoffashion.com/articles/retail/rent-the-runways-long-road-ahead-to-profitability/. [Accessed 26 Oct. 2022].
● Comparably, n.d. About Rent the Runway's Brand. Comparably, [Online] Available at: https://www.comparably.com/brands/rent-the-runway. [Accessed 7
November 2022].
● Dawes, E., (2022). Fashionpass Review | Will I Keep Using This Clothing Rental Subscription. Glamour and Gains, [online] Available
at:https://glamourandgains.com/fashionpass-review/ [Accessed 27 Oct. 2022].
● DBA FundKite, (2022). Rent the Runway The Millennial Business Model. S.l.:s.n.
● Euromonitor.com. (2019). Euromonitor International | Strategic Market Research, Data & Analysis. [online] Available at: https://www.euromonitor.com/.
● Eastman, M. B., (2022). Which clothing rental company is best: Rent the Runway or Nuuly? It depends on the designers you prefer, your price point, and how
many new pieces you want. Money under 30, [Online] Available at: https://www.moneyunder30.com/rent-the-runway-vs-nuuly. [Accessed 10 November 2022].
● Instagram for Business. (2019). How to Plan for Holidays on Instagram. Instagram for Business, [online] Available at:
https://business.instagram.com/blog/how-to-plan-for-holidays-on-instagram/. [Accessed 1 November 2022].
● Fibre2fashion, (2021). American retailers oppose business tax rate increases. Fibre2fashion, [online] Available at:
https://www.fibre2fashion.com/news/retail-industry/american-retailers-oppose-business-tax-rate-increases-276353-newsdetails.htm. [Accessed 16 Nov. 2022].
● Galbraith, S., (2013). The Secret Behind Rent The Runway's Success. Forbes, [Online] Available at:
https://www.forbes.com/sites/sashagalbraith/2013/12/03/the-secret-behind-rent-the-runways-success/?sh=e29114977e69. [Accessed 6 November 2022].
References
● KOZLOVA, A., (2020). What Can Be Learnt From Rent the Runway’s Business Model?. s.l.:STARTING BUSINESS.
● Leighton, M., (2020). 12 photos that show how 4 women at Business Insider use Rent the Runway’s ‘Unlimited Swaps’ clothing subscription. Insider, [online]
Available at: https://www.insider.com/guides/style/rent-the-runway-unlimited-review#:~:text=Rent%20the%20Runway%20Unlimited%20Swaps. [Accessed 27 Oct.
2022].
● Loxandleather, (2019). My Honest Fashion Pass Review — A New Clothing Rental Service Perfect For My Quarter Life Crisis. Lox & Leather, [Online] Available at:
https://loxandleather.com/2019/03/01/fashion-pass-review/. [Accessed 9 November 2022].
● Morris, W., and Brown, P., (2021). Digital service taxes: Are they here to stay? PwC, [online] Available at:
https://www.pwc.com/us/en/services/tax/library/digital-service-taxes.html. [Accessed 3 November 2022].
● Perri, J., (2021). Clothing subscription box companies restyle their offerings in pandemic. Bloomberg Second Measure, [online] Available at:
https://secondmeasure.com/datapoints/clothing-subscription-box-companies-restyle-their-offerings-in-pandemic/. [Accessed 10 November 2022].
● RENT THE RUNWAY, INC, (2022). Rent the Runway Annual Report 2021. s.l.:RENT THE RUNWAY, INC.
● RTR Dress Code. (n.d.). Putting the Closet in the Cloud, in the Cloud: How RTR Moved to Cloud Services. [online] Available at:
https://dresscode.renttherunway.com/blog/how-rtr-moved-to-the-cloud. [Accessed 27 Oct. 2022]
● Rent the Runway, Inc., (2022). Rent the Runway, Inc. Announces Second Quarter 2022 Results. Rent the Runway, [Online] Available at:
https://investors.renttherunway.com/news-releases/news-release-details/rent-runway-inc-announces-second-quarter-2022-results [Accessed 15 November 2022].
● Rent The Runway, Inc., (2022). Annual Reports & Proxy. Rent The Runway, [online] Available at:
https://investors.renttherunway.com/financial-information/annual-reports-proxy. [Accessed 27 Oct. 2022].
● Runway, R. t., (2022). Investor Presentation, s.l.: Rent the Runway.
● Rent the runway, (2022). Prioritizing Access Over Excess: Rent the Runway Unveils Impact Strategy. Rent The Runway, [online] Available at:
https://investors.renttherunway.com/news-releases/news-release-details/prioritizing-access-over-excess-rent-runway-unveils-impact. [Accessed 4 November
2022].
● Shift, T., (n.d). Follow a Garment Through Our Dream Fulfillment Center. [Online] Available at: https://rtrshift.com. [Accessed 6 November 2022].
● Sophia, D.M., and Bedi, M., (2022). Rent the Runway shares sink as inflation-weary subscribers hit pause. Reuters. [online] Available at:
https://www.reuters.com/business/retail-consumer/rent-runway-shares-sink-inflation-weary-subscribers-hit-pause-2022-09-13/. [Accessed 27 Oct. 2022].
● Schwanke, C., (2022). FashionPass vs Rent the Runway: Should You Try Either One? Subscriboxer, [online] Available at:
https://subscriboxer.com/fashionpass-vs-rent-the-runway/. [Accessed 27 Oct. 2022].
● Statista, (n.d.). Gen Z apparel monthly spend 2022. [online] Available at: http://statista.com/statistics/1329837/gen-z-apparel-monthly-spend-gender/. [Accessed 14
Nov. 2022].
References
● TIPRANKS, (2022). Rent the Runway Website Traffic Watch Guide. [Online] Available at: https://www.tipranks.com/stocks/rent/website-traffic.
○ [Accessed 12 November 2022].
● THREDUP, (2021). 2021 Fashion Resale Market and Trend Report. [online] Available at: https://www.thredup.com/resale/#size-and-impact.
[Accessed 12 November 2022].
● Thomas, L., (2020). The clothing rental start-up Rent the Runway is closing all of its stores for good. s.l.:CNBC.
● Thomas R., Eisenmann, and Laura W., (2018). Rent the Runway Harvard Business Review Case Study. s.l.:HBR Publications.
● SHOAIB, M., 2022. Brands are casting ‘diverse’ models. But they’re still not challenging Eurocentric beauty norms. [Online]
Available at:
https://www.voguebusiness.com/fashion/brands-are-casting-diverse-models-but-theyre-still-not-challenging-eurocentric-beauty-norms [Accessed
14 November 2022].
● 3DLOOK, n.d. 10 Fashion Technologies to Future-Proof Your Apparel Brand. [Online]
Available at: https://3dlook.me/content-hub/top-10-fashion-technologies/ [Accessed 10 November 2022].
● Recharge, 2022. THE STATE OF Subscription Commerce, s.l.: Recharge.
Primary research
Netnography:
https://drive.google.com/file/d/1q-o9Z_UL9BCNH5Sfx_F0SVq0w6aaVuui/view?usp=sharing
Questionnaire:
https://docs.google.com/spreadsheets/d/112osvDu8--j53obYok_SKLf5SZM_eL3oY3iQCSOo0P8/edit?usp=sharing