November 10, 2009

Innovation in a Tough Economy

Filed under: Business,Technology — Emily Reeves @ 8:37 am

Entrepreneurs must be a little more creative if they want to start a new business in a tough economy.  As a result, we see more businesses fill niche needs.  Enter Rent the Runway, a “Netflix model for haute couture” according to the New York Times:

“The mail-order service, which finishes the testing phase on Monday, allows women to rent dresses from notable fashion designers like Diane Von Furstenberg, Hervé Léger and Proenza Schouler for roughly one-tenth of what they would cost to buy in a retail store.

“The rentals run $50 to $200 for a four-night loan and are shipped directly to the customer’s doorstep. After wearing the dress, she puts it into a prepaid envelope and drops it in the mail. Dry cleaning is included in the price, but damage insurance costs $5, and in the case of outright destruction of the dress, the renter is responsible for the full retail price.”

This is pretty exciting.  Granted, rental of dresses has been available for sometime.  But local rental selections aren’t always the best and there is that whole physical shopping thing to deal with (I am almost exclusively an online shopper).  An online rental that allows for easy returns is definitely a turn on.

The ladies who started this business are smart: they are only allowing for limited “membership” at this point.  When you make something exclusive, not only do even more people want to participate, but it also assures that you can walk into a party and know that not everyone there will have seen and shopped the same dresses you did.  As the business starts to take off and membership grows, I would like to see an ability to “register” your dress for the event to which you are wearing it, effectively blocking anyone else from renting that same style for the same event.  I also hope that they will incorporate customer reviews of the dresses to help those on the fence as to a particular style decide (I love this feature on Zappos.com).

I signed up to be put on the waiting list for membership at Rent the Runway.  Sigh.

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