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For Rent the Runway, Stores Act as ‘Service Centers’ in the Supply Chain

Rent the Runway’s decision to let subscribers drop off returns at 15 WeWork locations in major markets nationwide maximizes the value they’re getting out of their recurring monthly plan—but throws yet another wrinkle into an increasingly complex supply chain.

“The thing about being a subscriber-focused business is there’s only so much of that expense that we want to pass onto our customers,” Paul Laskow, Rent the Runway’s senior director of logistics, said at The Lead Summit in Brooklyn on Oct. 23. “There’s this push-pull between wanting to get things to our customers as quickly as we can while doing it as efficiently as possible so that we’re not loading up our supply chain with these costs.”

Before Rent the Runway unveiled the WeWork partnership earlier this month, which Laskow described as a “small investment in infrastructure,” customers had to wait until a returned garment was received by the company before a new one would be dispatched. Now, returning at a WeWork lobby drop-off box automatically triggers a new shipment, reducing the time subscribers have to wait before they get their hands on new styles.

On top of the WeWork perk, Rent the Runway also recently upped the limit on the maximum number of garments a subscriber can have in her possession at any time, from three to four. That’s another inventory and supply chain stressor, Laskow explained. As of August, subscription memberships were up 150 percent from the year-ago period, per Business Insider, and account for half of the company’s revenue just two years since launch.

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Undoubtedly, the subscription business has been a hit with working women juggling hectic lives but plenty of shoppers love Rent the Runway for the purpose it originally set out to solve at its founding in 2009: giving women rental access to high-end fashion for one-off occasions when buying an expensive outfit outright just doesn’t make a lot of financial sense.

Renters shopping for “high-stakes” events appreciate the convenience of being able to reserve a garment online and try it on in one of Rent the Runway’s five stores, Laskow noted. “Customers use stores as service centers to customize their subscription and the way they experience the brand that works best for them,” he added. Shoppers love the value of being able to confirm fit right on the spot, or if the garment doesn’t work out as expected, they have everything in the store to choose from.

Laskow said Rent the Runway faces some “weighty decisions” as it shifts to fulfilling inventory from a growing number of locations, such as potentially limiting assortments based on geography and shipping costs.

Though Laskow described click-and-collect as a “home run” with customers, he questioned whether it’s a service that makes sense for the long run. “In a world where outbound fulfillment is really seamless and return experience is painless, will click collect really be necessary?” he said. “Or is it just a Band-Aid to a new experience that’s broken in some ways?”

Like a number of digitally native brands, Rent the Runway seizes every opportunity to communicate its brand with customers. “We’ve had a ton of success with moving away from this idea that you have to receive your order in a corrugated box,” Laskow explained. Not only do the company’s reusable garment bags reduce waste on the consumer’s end but it’s a “great branding opportunity for us,” he continued, and adds convenience as well.

“It’s an interesting, functional object for us that saves us from having to invest in packaging,” Laskow said. “And plus she feels excitement about it. Even something as simple as packaging can be powerful.”