Rent the Runway, the subscription fashion service, wants to make its West Coast flagship, a tidy two-floor, 8,300-square-foot store in downtown San Francisco, a hub for customers to shop and relax.
Following the footsteps of other digital native vertical brands like Rothy’s and Allbirds, Rent the Runway evolved from the vagabond-esque pop-up (it previously had one at Neiman Marcus and another one in downtown San Francisco) to a more stable brick-and-mortar store as a way to service its customers better.
But there are some additional business reasons it chose The City by the Bay.
For starters, San Francisco is the company’s third-largest market, with subscribers growing 142% year over year (the company declined to provide actual consumer numbers).
Rent the Runway already had a presence in San Francisco with its pop-up shop in Neiman Marcus. However, the brand found that its customers wanted to visit the store during hours in which Neiman Marcus was closed. So it made sense to not only stay in San Francisco, but to also open up its own brick and mortar that the brand could control more.
Of course, it’s also where the money is.
Bob Phibbs, CEO of The Retail Doctor, a New York-based consultancy, said the company most likely opened up in San Francisco due to data showing that this is where their customers are. But, he added, it’s also where a lot of venture capital firms are located, and Rent the Runway’s target market in San Francisco has a high per capital spending.
“This is the future of retail,” Phibbs said. “Knowing where your most likely customer is going to be because you have all the online data that points [to] that; knowing what she wants to buy, but allowing her to buy when she wants, where she wants.”
That type of insight, driven by data, helped the company shape the two-floor store. For example, it includes 20 fitting rooms (including a communal one), a beauty bar with products from Amika, a hair company, and makeup from Juice Beauty, a coffee bar, and perhaps a must-have in San Francisco: free WiFi.
“Everything that we’ve done around this floor design is really to maximize our customers,” said Maureen Sullivan, COO at Rent the Runway. “The more space you have, the better you can execute [experience] that for the customer.”
The new flagship includes plenty of new amenities that other stores don’t have, which Sullivan said they’d “love” to put in all their stores. Part of creating a concept like the beauty bar is based around how the customer’s actually using the service; people are coming in before and after work, and now the store can serve as part of that journey a cup of coffee for the morning or makeup for an evening event. Considering 88% of all transactions are self-service, Sullivan said the company needed to think about what else they could offer to the customer.
“This isn’t your usual retail environment,” Sullivan said. “It’s a very different flow and overall store experience.”
Sullivan said unlike what’s happening to the rest of retail, the company’s received an extremely positive response from their customers, in regard to foot traffic. For example, at Rent the Runway’s flagship in New York, the company extended their hours “to keep up with the demand.”
“Anytime that we show up in the physical world, it’s been incredibly well received by our community,” Sullivan said. “What that tells us is we need to continue to do more and innovate.”
Phibbs said one of the challenges Rent the Runway might face includes customer service—and doing it well. It’s one thing to perfect that experience online, but another to bring it to life for people in brick-and-mortar shops.
“We’re going online to buy, but going into store to shop,” Phibbs said. “They’re going to have to exceed customer expectations. The points that you have to manage are far fewer online than when you have to do deal with people in-store.”