By Maghan McDowell
with contributions from Evan Clark
 on November 17, 2016
Rent the Runway Neiman Marcus

Fashion’s disruptors might just need their disruptees — and vice versa.

In a lions-laying-down-with-lambs move, Rent the Runway is coming to Neiman Marcus — bringing in a lower-priced fashion option and possibly some new foot traffic to the tony retailer.

On Friday, San Francisco’s downtown Neiman Marcus store will give over almost 3,000 square feet that had been devoted to home and children’s items to rentals, returns and exchanges through the seven-year-old fashion rental service. There are plans to open a few more Rent the Runway shops in Neiman Marcus doors next year, but both sides were mum on specifics and the financial details of the partnership.

Jennifer Hyman, the rental firm’s cofounder and chief executive officer, said San Francisco is the center of innovation in the U.S. and is an appropriate place to bring disruptive commerce to the luxury segment.

The Rent the Runway shop in Neiman Marcus will host a rotating selection from what Hyman calls Rent the Runway’s “dream closet,” made up of dresses, jumpsuits, jewelry and more from over 400 designers, including Diane von Furstenberg, Derek Lam, Jason Wu and Marni.

To keep things fresh the assortment will change daily and be coupled with for-purchase products from Neiman Marcus such as shoes, handbags, undergarments and cosmetics.

Hyman called “buy-rent” the new “high-low.”

“It competes with fast fashion, which is really just unlimited variety, and that is the same thing that we are offering,” she said.

The deal is a sign of the times for both sides.

Younger, techie companies have realized that they can’t operate in an online vacuum and largely benefit from a more traditional brick and mortar presence. Before Rent the Runway came to Neiman Marcus, Nordstrom Inc. invested in Bonobos and started carrying the bottoms-centric brand. And others, such as Warby Parker, have moved heavily into the world of physical stores.

(Last year Neiman Marcus also entered into a strategic partnership with consignment site The Real Real, forming a gift-card program designed to get consigners to head to Neiman Marcus with money they make from selling their luxury wares).

In general, the last generation of buzzy e-commerce startups have found businesses that sell only, or even mostly, online are difficult to scale, i.e. Nasty Gal, which was scrambling for capital and finally went into bankruptcy last week. Amazon has grown to be a giant by spending heavily on infrastructure and temporarily foregoing profits to become one of the few players with true e-commerce scale.

That leaves many retailers and tech darlings looking to benefit from one another, although there is potential for each to steal business from the other.

Jim Gold, Neiman Marcus’ president and chief merchandising officer, said even though many of the brands that Rent the Runway offers are also Neiman Marcus merchants, the partnership offers the opportunity to attract new, potentially younger, customers who might eventually graduate to purchasing the same designer’s pieces after discovering them through a rental.

“We love the idea,” said Gold, who acted as an adviser when Hyman pitched the idea of the company while at Harvard Business School. “It’s an opportunity to bring in new customers who don’t shop with Neiman Marcus. It’s mutually beneficial.”

Although San Francisco represents one of Rent the Runway’s top-five markets, this is the first time its customers there will access a physical outpost for the service, which started online but has been growing in the brick-and-mortar field and will have seven of its own locations overall by the end of the year.

Gold emphasized the customer service benefits that will attract potential new customers – the store will be staffed by Rent the Runway employees who will work closely with Neiman Marcus staff.

Rent the Runway will update its app to coincide with the opening, and customers will be able to search and select items to pick up in specific stores. They can book a styling appointment or chat on the app with an in-store stylist to request services such as a street-level hand-delivery of an order. Customers can also exchange rentals they received in the mail that do not fit.

Modeled off of Apple’s Genius Bar, a RTR Bar will offer quick advice or services. Members of Rent the Runway’s subscription service, Unlimited, can also pick up and drop off in-store.

Gold said with this first iteration he would be looking at whether the store is seeing new customers and what they can learn about these clients. “Are they buying other things from us? Are they coming back when they aren’t renting something?

“We love that RTR gives women an opportunity to try brands they haven’t tried before, and there’s a tremendous opportunity to capitalize on that,” Gold said. “We love the idea of being able to complement the rentals with a much deeper experience — to talk about other needs and create long-term relationships.”

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