Rent the Runway lands inside Nordstrom

Discussion
Photo: Nordstrom
Jul 01, 2019
Tom Ryan

Rent the Runway, the apparel rental subscription service, has installed four drop boxes at Nordstrom locations in Los Angeles. More are planned.

Three are inside the smaller-format Nordstrom Local stores. The fourth is in Nordstrom’s full-size location at The Grove.

The boxes provide subscribers with a convenient way to drop off rented clothes, although pick-ups will be added in coming months.

Physical drop-offs speed the exchange process for Rent the Runway versus the typical return method via mail. Since adding drop-off boxes inside WeWork locations last October, Rent the Runway has seen over a 180 percent increase in returns directly from customers, according to a statement.

Rent the Runway customers pay $159 to rent an unlimited number of outfits per month and can keep any four styles out at any one time. A subscription for four pieces a month costs $89. Items can be acquired outright at a discount.

Los Angeles is Rent the Runway’s fourth largest market, “with a rapidly growing subscriber base across the region, and a particularly high density of subscribers living or working close to the Nordstrom Local locations,” the statement said.

Inside Nordstrom, Rent the Runway members also gain access to conveniences, including try-on, tailoring, styling, gift-wrapping and “a variety of beauty services.” Trained stylists promise to work with members “to build out their ideal closet with a mix of rented and owned items from RTR & Nordstrom.”

Much like Kohl’s move to install return stations for Amazon purchases, Nordstrom is expected to benefit from traffic. The department store is already piloting the Narvar Concierge network that enables consumers making purchases from digital retailers to pick up and return their purchases at physical stores.

“We believe that Rent the Runway and Nordstrom customers share a lot of the same qualities,” said Shea Jensen, SVP of customer experience at Nordstrom. “Customers have told us that convenience matters to them.”

In April, Neiman Marcus took a minority stake in online luxury reseller Fashionphile. 

DISCUSSION QUESTIONS: Does the move to add Rent The Runway drop-off points inside Nordstrom represent a win-win for both companies? What meaningful synergies do you see between online clothing rental services and department stores?

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Braintrust
"It’s a recognition of the evolution taking place and it’s a proactive move to adapt."
"There is an interesting dynamic going on for D2C apparel companies that are going the other way and establishing themselves in brick-and-mortar..."
"If this is the first step on the road to a deeper partnership between the two brands, then we could be looking at something interesting."

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18 Comments on "Rent the Runway lands inside Nordstrom"


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Shep Hyken
BrainTrust

Two points to consider:

  1. Rent The Runway and Nordstrom are both “classy” organizations. They can help feed off of their good reputations.
  2. Anything that can add foot traffic to a retail location is a good idea.
Bob Phibbs
BrainTrust

Having visited a couple of the Nordstrom Local stores in Los Angeles, count me as underwhelmed. Bored employees sitting around with nothing to do while looking into their phones, a “stylist” who didn’t know how to do a return, a surly tailor and a haircut that took two hours – none of which fits into their premium lifestyle. Nordstrom Local is effectively becoming a returns outlet, not an extension of their brand.

Cathy Hotka
BrainTrust

As Ms. Jensen points out, convenience matters. Clothing rentals have really resonated with younger, affluent customers in cities, and it is savvy of Nordstrom to give those customers a new reason to enter their stores.

Jeff Sward
BrainTrust

Sometimes partnerships rise to a level above win/win. They go beyond some simple back office synergies. They elevate to win/win/win. Both brands AND the customer benefit. That happened recently with Apple and Best Buy. Feels like the same thing is happening here. At a minimum it’s a very positive experiment. It’s a recognition of the evolution taking place and it’s a proactive move to adapt.

Georganne Bender
BrainTrust

This partnership would excite me if there were a selection of Rent the Runway fashions in the store I could choose from with the help of a Nordstrom stylist. Currently, it’s a self-serve drop-off box. Yawn.

Sterling Hawkins
BrainTrust

It’s a good idea — but I’m with Georganne, there’s so much more that the partnership could take advantage of. A standard dropbox is almost a no brainer. They are similarly positioned brands with aligned customer bases so it should work well. I think we’ll see an expansion of the partnership to further engage customers over time to showcase potential rentals, etc.

Carol Spieckerman
BrainTrust

Kudos to Rent the Runway for leveraging platform partnerships under multiple models. Just as it is helping Neiman Marcus build a bridge to new generations of customers through shop-in-shops, the partnership with Nordstrom will drive awareness for RTR and provide convenience for its LA-based customers. Creative partnerships for the win!

Brandon Rael
BrainTrust

The Rent the Runway and Nordstrom mashups are just the kind of retail mashups that could help stimulate interest/traffic in an existing brand, as well as offer a new interaction channel for an emerging digital native brand. While this on paper makes complete sense, it’s all in the execution of these services where both the Rent the Runway and Nordstrom teams could mutually benefit.

The key for the Nordstrom team is to promote that Rent the Runway’s services, benefits, and advantages are now in the store. Otherwise the drop boxes will get lost in the mix, and maybe become a curiosity to their customers.

Mitigating the last mile is the greatest challenge for digital native brands, and drawing customers to the brick-and-mortar stores is the key for department stores and the Nordstrom team.

Anne Howe
BrainTrust

The “try-on” service that Nordstrom can offer for potential RTR customers is a big attraction. Knowing what designers fit well is the key to a balanced wardrobe. I like the brand synergies here.

Rich Kizer
BrainTrust

Rent the Runway drop-off boxes. Some of my colleagues here are spot on. If the service in-store is horrid, the customer blames both companies. That is pure “no wins”! Who wants to be uncomfortable is the question. Roller coaster rides generally lose customers.

Ryan Mathews
BrainTrust

It’s a win for Rent The Runway and an act of hipster desperation for Nordstrom. If there was a Rent the Runway boutique in the stores, maybe I’d be a little more positive. On the other hand, if my business was selling clothes, I’m not sure I’d be that enthusiastic about helping the clothing rental business, unless I owned a piece of it.

Dave Bruno
BrainTrust

Outside of generating traffic (which is theoretically a good thing) I am not sure how much value this brings to Nordstrom. Do people really build their “ideal closet” by purchasing items that coordinate well with one-time rentals? Perhaps if Norstrom has access to the customer data that would be good value, but I doubt that is part of the deal.

Doug Garnett
BrainTrust

For the moment, this is a no-lose for Nordstrom. However, I seriously doubt the longevity of Rent the Runway. They are the beneficiaries of tremendous hype and VC interest because there’s too much money looking for a place to land. We have plenty of recent experience to make clear that investor excitement is unrelated to potential for success.

Shikha Jain
BrainTrust

There is an interesting dynamic going on for D2C apparel companies that are going the other way and establishing themselves in brick-and-mortar mostly because of access. It’s a win-win because:

  1. The benefit to Nordstrom is generating foot traffic from returns. Potentially even unique customers.
  2. The benefit to RTR subscribers is additional convenience – easy returns especially since gowns are bulky as well as the best benefit which is fitting for bought pieces. Also, a piece that is fitted increases the conversion from rent-to-own.
Lee Peterson
BrainTrust

This is what department stores do, isn’t it? Get a hot idea in, draw traffic, sell them a bunch of goods. Right? Seems over the years they’ve lost that sensibility and have somehow stuck to a “we’re apparel sellers,” um, on sale, mentality. Whereas, the thinking needs to be (is now?): RtR is a good idea, of course they should be in our store! Just like Nordstrom’s is actually executing.

Cate Trotter
BrainTrust
If this is the first step on the road to a deeper partnership between the two brands, then we could be looking at something interesting. A drop-off point for Rent The Runway certainly makes sense for it given the benefits it’s seen from similar set-ups elsewhere. I wonder if Nordstrom is using this to gauge the clothes rental market in certain areas. Adding pick-up will help to make the service more convenient, and drive traffic to the Nordstrom spaces. If they can then nail the model where there are Rent The Runway pieces to try on in-store, or you can order your RTR choices to the spaces to try on with a stylist, then it could be a real step forward in the rental market. I think Nordstrom is smart to partner with a known name rather than purely try to strike out on its own. I think a mix of rental and owned pieces could become the standard in a lot of wardrobes in the future, so getting the groundwork right now is a… Read more »
Mohamed Amer
BrainTrust

Retail’s future is a hybrid one. Physical and digital, stores and online, selling and subscribing, buying and renting, and it transcends individual brands and banners.

This is a great move by both companies that adds even greater convenience and says that the path to winning must place the customer at the heart of the value equation.

Ricardo Belmar
BrainTrust

For right now, this is a sensible mash-up of two retail brands. The thing with most mash-ups, however, is that they are only incrementally better than the individual concepts being combined. To truly transcend that incremental behavior, they need to do something unique that neither could do on their own. In some ways, this is symptomatic of department stores — adding incrementally “better” concepts to the store and hoping for the best, rather than creating something unique and innovative. Hopefully, there will be more to this relationship in the near future for consumers to enjoy.

wpDiscuz
Braintrust
"It’s a recognition of the evolution taking place and it’s a proactive move to adapt."
"There is an interesting dynamic going on for D2C apparel companies that are going the other way and establishing themselves in brick-and-mortar..."
"If this is the first step on the road to a deeper partnership between the two brands, then we could be looking at something interesting."

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