The online and off-line worlds are colliding.
This story first appeared in the October 8, 2014 issue of WWD. Subscribe Today.
Jennifer Fleiss, cofounder and head of business development at Rent the Runway, and Amy McManus, vice president of e-commerce for North America at Kate Spade & Co., shared insights into their omnichannel business strategies in a roundtable discussion, moderated by Evan Clark, deputy managing editor of WWD.
Rent the Runway has opened its first freestanding ground-level store at 16 West 18th Street in the Flatiron District in New York. The company began testing brick-and-mortar two years ago with partners, opening outposts at Henri Bendel in New York and at the Cosmopolitan Las Vegas. Rent the Runway rents designer dresses and accessories for 10 percent of the retail price.
According to Fleiss, the idea for stores came out of consumer demand and interest. She kept hearing that customers wanted to see the dresses, touch them and try them on. “It became more compelling to open our own retail locations, which is now a core strategy of the business. We see it as very complementary to our online business,” she said.
“We’re excited about this online/off-line convergence,” said McManus. “It’s transforming the way we’ve been doing business in the past and really putting the customer at the center of everything we do, making it more customer-centric and channel-agnostic.” She said they’ve been adding more digital experiences in-store and more store functionality online. McManus said last spring, Kate Spade worked with a company called Perch, an interactive display system, to make its stores more interactive.
In making the move to retail, Fleiss looked at other online brands such as Warby Parker, Bonobos and Birchbox, as well as her own laboratory stores and pop-up stores with partners that were lower-risk. She found that the consumer has become accustomed to very fast payment in stores, more personalization and more attention in stores. “The ante has been upped by online behavior and the ease and efficiency,” she said. Customers come into the store and have these expectations. She said for them it’s about providing a great and convenient experience in-store, similar to what they provide online “and technology has been a core part of that.”
Rent the Runway uses technology on the back end to personalize the experience in-store. Since their model is appointment-based, they schedule appointments for customers who give them their e-mail address, height, weight and bust size. When they come into the store, the company already has pulled merchandise specifically for them, which makes their time in the store more efficient, she said.
Collaborations are playing a bigger part at both companies. Kate Spade created shoppable windows in partnership with eBay when it launched its Saturdays brand. Rent the Runway partnered with Drybar online, because the firm knows when a woman books a dress, they have an event coming up and may want a blow-dry. “We opened our Flatiron location, and Drybar happens to be a block away. There are lots of physical integration opportunities we can do with these two stores, and there are also event opportunities,” she said, such as having a hairstylist or manicurist in-store.
“Why would I want to go into a physical space to begin with, if I have every product at our fingertips online?” Fleiss asked. She believes firms have to offer something in a store that the customer couldn’t find out on her own, such as spending time with a personal stylist who knows about them and can relate to the event coming up, and point out things they might not have found on their own. “That’s the differentiating factor that people start to expect when they come into your store and it makes them feel like it’s worth their while, as opposed to shopping online,” said Fleiss.