Group members:

 Alua Akhmatulina – 34642964

 Kerim Annanurov – 34639465
 Yan Lazdyn – 34819783

CASE: RENT THE RUNWAY

Solomon, Michael R., Greg W. Marshall, and Elnora W. Stuart 2022. Marketing Real People,
Real Choices, chapter 11 page 451.
Summary of the case:
When Jenn Hyman and Jennifer Fleiss started Rent the Runway in 2009, they completely
transformed the fashion business by providing a rent-by-mail service for clients who value
experiences over possessions. Initially offering one-time rentals for special events, the
business now generates most of its income through a monthly subscription service that
enables customers to rent and trade four items from various fashions and manufacturers.
Despite a supply chain mishap in 2019 that led to order delays and unhappy customers, Rent
the Runway has rebounded and has kept expanding its product offerings. The company's
success, which has a $1 billion valuation and a devoted customer base, depends on its
capacity to offer high-quality goods and prompt delivery, keeping customers hooked on its
addictive service.
1. What challenges does the case study highlight for Rent the Runway?
The case study highlights several challenges faced by Rent the Runway, including supply
chain management and customer satisfaction. It explores the reliability of their reverse
logistics technology and the impact of their marketing strategies on their overall operations
and customer relationships.
The case study highlights several challenges for Rent the Runway:
1. Supply Chain Management: Rent the Runway faces the complex task of managing a large
number of shipments for millions of customers. Unlike traditional retailers, the company
deals with the additional challenge of handling reverse logistics, including product returns,
cleaning, repairs, recycling, and waste disposal.
2. Technological Infrastructure: The company experienced a supply chain fiasco when its
back-end technology systems crashed, resulting in order fulfillment issues and idle
workers. The malfunctioning of a new inventory management software system further
exacerbated the problem, leading to delays in fulfilling customer orders.
3. On-Time Delivery: Customer satisfaction heavily relies on timely delivery. Rent the
Runway's customers expect to receive their rented garments before their events or as per
their subscription plan. Any delays or disruptions in the supply chain can lead to customer
dissatisfaction and disappointment.
4. Customer Service and Communication: When faced with the supply chain failure, Rent the
Runway's customer service was overwhelmed with complaints and inquiries. Customers
expressed their frustrations through phone calls and social media. Effective communication
and handling of customer complaints are crucial for maintaining customer confidence and
trust.
5. Customer Loyalty: Despite the supply chain challenges, Rent the Runway aimed to retain
customer loyalty. The company offered full refunds, cash compensation, and frequent
communication from the founder and CEO to apologize for the delays and assure
customers of improvements. Retaining customer loyalty and regaining trust is essential in a
business heavily reliant on trust and word-of-mouth promotion.
6. Expansion and Diversification: Rent the Runway faces the challenge of expanding its
offerings to cater to different customer segments. The company has expanded into
athleisure, ski apparel, children's clothing, and other items like pillows and throws.
Managing the expansion while ensuring quality and timely delivery adds complexity to its
operations.
Overall, the challenges faced by Rent the Runway revolve around maintaining a smooth and
efficient supply chain, meeting customer expectations for timely delivery and high-quality
clothing, and effectively managing customer service during disruptions.
 2. Identify two marketing concepts from chapter 11 and discuss them in relation to
the case study.
Marketing Concept 1: Knowledge Management
The process of gathering, arranging, and using knowledge inside an organization to increase
performance and decision-making is referred to as knowledge management. Knowledge
management is extremely important in Rent the Runway's situation for a number of reasons:
a) Trends and Customer Preferences: Rent the Runway gathers and examines information on
rental patterns, customer preferences, and fashion trends. This information enables the
business to better identify which clothing brands and styles are popular, enabling them to
store their inventory appropriately and offer an extensive range of alternatives to their clients.
b) Inventory Management: With a vast selection of clothing items from various brands,
effective knowledge management enables Rent the Runway to track the popularity and
availability of specific garments. This helps in optimizing inventory levels, ensuring that
popular items are well-stocked while minimizing the risk of excess stock or shortages.
c) Supply Chain Optimization: By leveraging knowledge management, Rent the Runway can
gain insights into its supply chain operations. This includes identifying bottlenecks,
streamlining logistics processes, and improving the efficiency of reverse logistics for returned
items. Data-driven decision-making based on knowledge management can enhance the overall
supply chain performance and reduce turnaround times.
d) Customer Relationship Management: Knowledge management also contributes to Rent the
Runway's customer relationship management efforts. By maintaining a database of customer
preferences, rental history, and feedback, the company can personalize its services, provide
tailored recommendations, and offer a personalized customer experience. This enhances
customer satisfaction and builds long-term loyalty.
Marketing Concept 2: Independent Intermediaries
Independent intermediaries refer to entities that operate between the company and its
customers, assisting in the distribution of products or services. When exporters use
independent intermediates, they give them decision-making authority and accountability for
managing numerous logistical, sales, marketing, and service duties. This involves monitoring
the flow of physical items, ownership transfers, advertising activities, negotiation procedures,
financial elements, risk management, order fulfillment, and payment interactions between the
supplier and the end user (Madsen 2012). In the case of Rent the Runway, independent
intermediaries play a limited role due to the nature of its business model, but there are a few
instances where they are involved:
a) Delivery and Logistics: Rent the Runway relies on independent intermediaries, such as
FedEx, for the delivery of rented items to customers. These logistics partners ensure timely
and reliable transportation of the garments to customers' doorsteps or drop-off locations,
contributing to the overall customer experience.
b) Partnerships: Rent the Runway has formed strategic partnerships with other companies to
expand its services and reach. For example, the collaboration with W Hotels allows Rent the
Runway to offer wardrobe selections waiting in hotel rooms for traveling guests. Such
partnerships act as independent intermediaries, facilitating the integration of Rent the
Runway's services into a broader customer journey.
While Rent the Runway predominantly operates through its own platform and logistics
infrastructure, independent intermediaries in the form of delivery services and strategic
partnerships add value to the overall customer experience, ensuring efficient distribution and
enhancing convenience for customers.
3. What is Rent the Runway's current marketing strategy?
Rent the Runway's current marketing strategy focuses on providing a convenient and
personalized fashion rental experience to its customers. The key elements of their marketing
strategy can be outlined as follows:
 Subscription Model: Rent the Runway has shifted its revenue focus towards a monthly
subscription service. Customers can rent up to four things at once and switch them out
several times during a month by selecting from a variety of subscription programs.
This subscription-based business strategy offers customers ease and good value while
giving a steady rotation of stylish clothing alternatives.
 Extensive Inventory: The company offers a wide range of clothing styles and brands,
with over 15,000 styles from 600 brands available for rent. This extensive inventory
caters to various customer preferences and allows for personalized choices. Rent the
Runway's ability to provide a diverse selection of high-quality clothing is a key aspect
of its marketing strategy.
 Customer Experience and Convenience: Rent the Runway focuses on providing a
seamless and hassle-free customer experience. They offer easy shipping options
through FedEx and convenient drop-off locations. The company handles the cleaning
and maintenance of rented items, eliminating the need for customers to worry about
dry cleaning. This convenience and attention to detail in the customer experience are
central to their marketing efforts.
 Brand Partnerships and Expansion: Rent the Runway has expanded beyond its core
fashion rental service. They have formed strategic partnerships with other companies,
such as W Hotels, to enhance the customer experience. Through the partnership, Rent
the Runway offers wardrobe selections waiting in guest rooms at W Hotels, targeting
travelers. Additionally, Rent the Runway has expanded into new product categories
like athleisure, ski apparel, children's clothing, pillows, and throws. These expansions
allow the company to reach a broader customer base and provide a more
comprehensive fashion rental solution.
 Customer Communication and Relationship Management: Rent the Runway places a
strong emphasis on customer communication and relationship management. In cases
of service disruptions or issues, such as the supply chain failure mentioned in the case
study, the company acknowledges and addresses customer concerns promptly.
Founder and CEO Jenn Hyman personally communicates with customers, expressing
apologies, and making commitments to improve. This transparent and proactive
approach to customer communication helps build trust and loyalty.
Rent the Runway's marketing strategy revolves around delivering a seamless, personalized,
and convenient fashion rental service to its customers. The business tries to keep current
customers and draw in new ones while fostering favorable word-of-mouth recommendations
by concentrating on the customer experience, enhancing product offerings, and upholding
strong customer connections.
 4. Does Rent the Runway align with, or contradict a sustainable proposition that
might appeal to GenZ consumers?
Rent the Runway aligns with a sustainable proposition that can appeal to Gen Z consumers.
Here's an analysis of how Rent the Runway incorporates sustainability into its business
model:
 Sharing Economy and Circular Fashion: Rent the Runway taps into the sharing
economy trend by offering a platform where customers can rent clothing instead of
buying them. This promotes the concept of circular fashion, which encourages the
reuse of garments, reducing the environmental impact of fast fashion and promoting a
more sustainable consumption pattern.
 Reduced Clothing Waste: By renting clothing instead of purchasing new items,
customers can enjoy a wide variety of styles without contributing to the growing issue
of clothing waste. Rent the Runway's business model encourages customers to use and
experience fashion without the need for ownership, reducing the number of
underutilized items that end up in landfills.
 Efficient Inventory Management: Rent the Runway's inventory management system
optimizes the use of clothing items. Instead of purchasing new garments for each
rental, the company carefully curates its collection and makes efficient use of existing
inventory. This approach minimizes overproduction and reduces the strain on
resources and energy associated with producing new clothing.
 Reverse Logistics and Product Lifecycle: Rent the Runway's proficiency in reverse
logistics is crucial for managing the return, cleaning, and potential repair of rented
items. This focus on the full lifecycle of the product promotes sustainability by
maximizing the usage of each garment and minimizing waste.
 Expansion into Sustainable Categories: Rent the Runway's expansion into athleisure
and ski apparel, as well as children's clothing and home items like pillows and throws,
indicates a move towards offering a broader range of sustainable options. These
expansions allow the company to cater to a wider audience while promoting
sustainable alternatives in different areas of consumption.
 Partnerships with Sustainable Brands: Rent the Runway collaborates with over 600
brands, giving preference to those that align with sustainable practices and values. By
promoting these brands and their products, Rent the Runway supports and amplifies
the efforts of sustainable fashion designers and manufacturers.
 Customer Education and Conscious Consumption: Rent the Runway has an
opportunity to educate its customers, particularly Gen Z consumers, about the
environmental impact of fast fashion and the benefits of renting clothing. By raising
awareness and encouraging conscious consumption, the company can foster a more
sustainable mindset among its target audience.
While Rent the Runway faced supply chain challenges in the past, its commitment to
addressing the issues, improving operations, and maintaining customer loyalty indicates a
genuine effort to align with sustainability and meet the expectations of environmentally
conscious Gen Z consumers.

SWOT analysis
 Strength Weakness

 Innovative business model  Supply chain challenges

 Extensive inventory  Dependence on technology
 Subscription service  Quality control
 Brand reputation
 Strategic partnership

Opportunities Threats

 Market expansion  Intense competition

 Personalization and
customization  Changing consumer behavior
 Sustainability and conscious
consumption  Supply chain complexity

PESTEL analysis

Political factors

 Government Regulations: The company must comply with regulations

related to consumer protection, data privacy, and intellectual property
rights.
 TradePolicies: Changes in trade agreements or tariffs may impact the
availability and cost of imported garments, affecting the company's
operations and pricing.

Economic factors

 Disposable Income: Economic conditions and income levels can

influence customer spending on fashion and clothing rental services.
 Exchange Rates: Fluctuations in exchange rates can impact the costs of
importing designer garments, potentially affecting pricing and
profitability.

Sociocultural factors

 Fashion Trends and Preferences: Consumer preferences for fashion

styles and trends can shape the demand for Rent the Runway's offerings.
The company needs to stay updated and adapt to changing fashion
 tastes.
 Changing Lifestyles: The shift towards a more casual dress code and the
desire for variety in outfits can present opportunities for Rent the
Runway to cater to these preferences.

Technological factors

 Information Technology: Rent the Runway's back-end technology

systems for order management, inventory tracking, and logistics are
crucial for efficient operations. Continuous updates and maintenance are
necessary to ensure smooth functioning.
 Mobile and E-commerce: The increasing use of mobile devices and
online shopping platforms provides opportunities for Rent the Runway
to enhance its digital presence and reach a broader customer base.

Environmental factors

 Sustainability and Conscious Consumption: Growing environmental

awareness presents an opportunity for Rent the Runway to emphasize its
eco-friendly practices, such as garment recycling and reducing waste.

Legal factors

 Intellectual Property: The company needs to adhere to intellectual

property laws to protect its brand trademarks and prevent copyright
infringement.
 Consumer Protection: Compliance with consumer protection laws and
regulations is vital to ensure fair practices, accurate product
descriptions, pricing transparency, and effective dispute resolution.

References:

Madsen, Tage Koed, Øystein Moen, and Randi Hammervold. 2012. “The Role of
Independent Intermediaries: The Case of Small and Medium-Sized Exporters.”
International Business Review 21 (4): 535–46.
https://doi.org/10.1016/j.ibusrev.2011.06.003

Roshitsh, Kaley. 2019. “Rent the Runway Back to Business After Systems
Upgrades.” WWD.com.

Roshitsh, Kaley. 2022. “Sustainable Fashion’s Big Wins in 2022.” WWD.com, 22–22.

Samokhina Zhanna. 2022. “Marketing Tools and Technologies in the Knowledge

Management System.” Bìblìotečnij Vìsnik, no. 3: 31–39.
https://librarysearch.murdoch.edu.au/permalink/61MUN_INST/3bciql/cdi_doaj_primar
y_oai_doaj_org_article_23d5563bae174f66868a58150a066114
Scuotto, Veronica, Chiara Nespoli, Rosa Palladino, and Imen Safraou. 2022. “Building
Dynamic Capabilities for International Marketing Knowledge Management.”
International Marketing Review 39 (3): 586–601. https://doi.org/10.1108/IMR-03-2021-
0108.

Solomon, Michael R., Greg W. Marshall, and Elnora W. Stuart 2022.. Marketing Real People,
Real Choices. Harlow, UK: Pearson.