Design Your Business With Data

By cmiadmin | March 25, 2015

After leaving Harvard, Jennifer Hyman and Jennifer Fleiss had the insight that women might rather rent high fashion items than own them. Fashion is expensive and has a limited shelf life. The two founders decided to start a company based on a simple idea – a woman should never have to wear the same outfit twice, and shouldn’t have to buy it at all.

Rent the Runway was born. Many of their earliest customers were Millennials, who intuitively understood the value of access rather than ownership. After all, if you can use Spotify to listen to music rather than buying albums, and Uber to get to places rather than owning a car - how hard might it be to ‘stream’ a designer dress?

As it turns out—more difficult than it might seem. In their early years, Rent the Runway struggled to meet their targets. It took a radical mindset change in marketing to turn things around. The founders realized that to fix engagement, they needed to focus their efforts on data science, pricing models and their mobile platform.

Like Amazon, Rent the Runway had to become a logistics and data business, not merely a retail and fashion
one. Their new data driven approach paid off, and now the company ships more than 90,000 items a day to 5 million members, and not surprisingly, also operates the country’s largest dry-cleaning facility.

For CMOs, the story of Rent the Runway illustrates the central role that data plays in business today. No longer just a measure of past activity, it has become a pro- active metric capable of changing your entire approach to customer value creation. Data is not just for IT geeks, it belongs at the heart of your growth strategy.

“Data’s a big part of our business, encompassing everything from the whole fashion component to metrics around utilization of a given dress,” Jennifer Fleiss said in an interview with Forbes last year. “We have an analytics team of six people internally, who look at rental statistics, such as how many long dresses get rented, how many short, how many red, black, orange and so on. What trends worked last season, what fabrics last the longest, which dresses are being turned and utilized the most?”

Ultimately, for smart marketers, data changes the way you design your business. Rather than buying their dresses from retail, Hyman and Fleiss now partner with designers - providing them data on what styles are the most popular in return for discounts and better availability of sizes. In the same way that Netflix uses data from its customers to commission original programming, Rent the Runway has approached emerging designers to create collections exclusively for their platform.

 

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