{"id":1564,"date":"2015-12-06T01:16:53","date_gmt":"2015-12-06T06:16:53","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/rent-the-runway-fashionable-operations\/"},"modified":"2015-12-06T01:16:53","modified_gmt":"2015-12-06T06:16:53","slug":"rent-the-runway-fashionable-operations","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/rent-the-runway-fashionable-operations\/","title":{"rendered":"Rent the Runway \u2013 Fashionable Operations"},"content":{"rendered":"

\"RTR\"<\/a><\/p>\n

Founded by two HBS graduates in 2009, Rent the Runway (\u201cRTR\u201d) partners with designers to offer high-end dresses and accessories for online rental at affordable prices. RTR founders – Jennifer Hyman and Jennifer Fleiss \u2013 noted that young women often faced the dilemma of buying expensive designer dresses which they would only wear once, especially after photos of them wearing these dresses were posted on social media. To resolve this dilemma, Hyman and Fleiss decided to create a platform to make luxury brands accessible to everyone through rental.<\/p>\n

The analysis below illustrates how RTR is highly effective at designing an operating model which closely aligns with its business model to create value for customers, designers, and the company itself.<\/p>\n

\"RTR2\"<\/a><\/p>\n

Business Model<\/strong><\/p>\n

The firm creates value to both customers and designers. For customers, RTR significantly lowers the cost of acquiring a designer dress for a special occasion, typically renting at 10% of the retail price[1]<\/a>. Customers can choose to rent out dresses for a four or eight-day period, allowing sufficient time to try the rental dress and in case it does not work, exchange it for another one right in time for the event[2]<\/a>. The rental experience is designed to be highly convenient and flexible, with RTR providing a free second size, an inexpensive second style as a backup (for an additional $32.5), and a prepaid package for customers to return the dresses. After the return, RTR takes care of the dry cleaning, which is included in the rental price.<\/p>\n

For designers, RTR provides them with a platform to rent their collections to and build loyalty among young women who will grow into designer brand customers in the coming years. In addition, designers receive feedback from RTR on what styles and colors are most popular, as well as how well their dresses fit, powered by RTR\u2019s data collection and analytics[3]<\/a>.<\/p>\n

Operating Model<\/strong><\/p>\n

The core of RTR\u2019s business model relies on offering a sizable, fashionable selection of dresses and accessories and making the rental experience as convenient and flexible as possible. In addition, RTR needs to take good care of the dresses to maximize their useful life and minimize inventory to drive sales. RTR supports its business model with a five-step operating model.<\/p>\n