Closet in the Cloud: A Fireside Chat with Anushka Salinas, CRO of Rent the Runway
Rent the Runway is a subscription and occasion rental-based service that allows its customers to unlock access to thousands of clothes and accessories. Although it was initially conceived as a platform for women to rent clothing for special occasions, the platform has branched out to allow customers to rent clothes for work, casual settings, and formal events. Today, working women make up 90% of Rent the Runway’s consumer base, and Rent the Runway’s impact on the fashion world continues to grow. At Business Today’s 44th International Conference, Anushka Salinas, CRO of Rent the Runway, gave insight to how Rent the Runway has been consistently challenging the evolving fashion space.
According to Salinas, “the average woman in America spends $3,000 [USD] a year on clothing.” This startling statistic, along with anecdotes of expensive one-time purchases, spurred Rent the Runway’s inception. With Rent the Runway’s rental services and subscription programs, consumers are able to keep up with fashion trends and eliminate pressure from repeating an outfit, all the while saving a great sum of their income. For instance, compared to the annual expenses of purchasing clothing, Rent the Runway’s Unlimited plan of $159 USD a month (or $1,908 USD a year) seems much smaller. Perhaps the most interesting question that Rent the Runway poses is an issue of rental novelty versus ownership investment. Most recently, the fashion world has witnessed the rise of consumers who purchase inexpensive clothing to be worn once, with little long-term investment in mind. Rent the Runway has effectively disrupted this cohort, offering higher quality, more stylish clothing, though catering to this audience’s desire for an exclusive, one-time look.
The magnitude at which Rent the Runway operates behind-the-scenes is a defining feature, too, of its innovative approach in catering to an extensive network of consumers. At their wearhouse, one of the largest clothes-cleaning facilities in New Jersey, the company speedily and diligently cleans the clothes for future rentals; the quick turnover is incredibly important for the company, especially when clothing for rentals must make strict deadlines. In this regard, Salinas explains that, after a couple of years, the team “quickly started to realize that actually [Rent the Runway] was not a fashion company but...a logistics company.” Though distinction between these two terms, fashion and logistics, has increasingly blurred, Salinas described that Rent the Runway attends to both simultaneously, curating fashionable pieces while addressing an increasing reach and audience.
Furthermore, with the opening of physical stores across the nation, Rent the Runway again illustrates its willingness to develop and refine its business model, heralding the consumer in mind. As Salinas puts it, “We think of our retail stores as service centers,” contrasting with current “brick and mortar stores being profit centers.” At these locations, customers can meet with a stylist, try on clothes, and self-checkout or return items. Delegating both responsibility and attention to the consumer, Rent the Runway’s new usage of physical space can be seen in parallel to the customer attention they employ through their online platforms. Rather than bend to traditional usage of online platforms for strictly the buying and selling of clothes, Rent the Runway uses customer data that they receive from the constant usage of their platform to narrow down an individual’s preferences and offer desirable variety for customers. Salinas stated, “Subscription is a very interesting business model because we get tons and tons of data points from these customers because they are interacting with us...almost every single day.” In harnessing technology to prioritize the customer, Rent the Runway has successfully adapted to a world in which the customer demands customization, given the immense amount of data at hand.
Although the company experiences much success today, Salinas was not shy to dismiss Rent the Runway’s humble beginnings. She illustrates that Rent the Runway, as a disruptor in the industry, still faces challenges and is constantly creating new solutions: “When we started Rent the Runway...we didn’t listen to the customer as much as we should have.” Looking back, her advice is “Don’t try to solve your own business need; make sure you’re servicing customers’ needs.” And indeed, having constantly worked to build radical solutions for its customers, Rent the Runway confronts existing norms of fashion, brick and mortar strategy, and use of data within retail. Instead of asking “what to buy,” consumers can now also ask, “what to rent?” As Salinas puts it, look no further than the “closet in the cloud.”