The NYTimes ran a fantastic expose on a startup called Rent The Runway, which allows customers to rent expensive clothes for between $50-200. The company, which has raised some angel funding from Bain Capital, has carved a nice niche in the world of high fashion, especially given that some of the dresses by top designers can cost upwards of $1,000. The site is polished with a strong call to action and the company is is maintaining an aura of exclusivity by being invite-only, for now.
Nevertheless, as The Times points out, there are some issues associating with applying the Netflix model to high-price goods like dresses. For one, how can RTR guarantee that they can meet the demand for their products? Is it sustainable for RTR to rely on designers to donate items to the site? Given the success of Netflix, we may start to see more and more statups like Rent The Runway trying to follow the DVD rental services’ business model — but will that work?
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Netflix Business Model for Fashion … Sustainable?
The NYTimes ran a fantastic expose on a startup called Rent The Runway, which allows customers to rent expensive clothes for between $50-200. The company, which has raised some angel funding from Bain Capital, has carved a nice niche in the world of high fashion, especially given that some of the dresses by top designers can cost upwards of $1,000. The site is polished with a strong call to action and the company is is maintaining an aura of exclusivity by being invite-only, for now.
Nevertheless, as The Times points out, there are some issues associating with applying the Netflix model to high-price goods like dresses. For one, how can RTR guarantee that they can meet the demand for their products? Is it sustainable for RTR to rely on designers to donate items to the site? Given the success of Netflix, we may start to see more and more statups like Rent The Runway trying to follow the DVD rental services’ business model — but will that work?
Tags: Bain Capital, Fashion, Netflix, Rent The Runway, Startup