Rent the Runway begins testing concierge texting service

Rent the Runway chief operating officer Maureen Sullivan said the service will eventually be powered using both artificial intelligence and people, but starting out, it will be primarily provided by human stylists. The experience is designed to mimic the type of interactions customers have with store associates in Rent the Runway’s five physical locations, with an eye specifically toward saving customers time.

“You can be in a meeting and write, ‘Text me options,’ then ‘Ok, I pick [options] one, two and four,’ — and then you’re done,” said Sullivan, adding that this is a feature customers have requested and that the “human-first” approach is important to bringing the in-store experience to life — and eventually informing the AI what it has to do. “People feel like they’re texting with a robot when they text with a robot,” she said.

This experiment is timed to the opening of San Francisco’s first standalone Rent the Runway location, also opening on Tuesday. The brand had outgrown its local, experimental Neiman Marcus store-in-store, which opened two years ago. (An even larger San Francisco location is slated to open next year.)

Almost half of the brand’s San Francisco subscribers used the Neiman Marcus location, which was also the first store in which Rent the Runway tested self-service stations. The stations (which have been updated for the new space, based on early learnings) allow Rent the Runway subscribers to rent and return pieces in-store without interacting with anyone.

In the five months since the self-service checkout option was introduced, it accounted for 83 percent of subscriber transactions in the San Francisco store.

Sullivan considers the San Francisco market (which is the brand’s third largest for subscribers) an excellent testing ground, as customers work for companies such as Salesforce, Uber, LinkedIn, Google, Facebook, Square, StitchFix, Apple, Airbnb and Dropbox. “Obviously, it has a tech-first mindset,” she said.

Since introducing Rent the Runway Unlimited two and a half years ago, the company reports that its overall subscription business has grown 150 percent year-over-year and now represents 50 percent of its total company revenue; Rent the Runway subscribers are using the Unlimited subscription more than 120 days a year. Customers tend to also be highly engaged, Sullivan said, with 85 percent of subscribers visiting the site or app weekly, and more than one-third visiting three times a week.

At a time when brands are grappling with the digital-physical divide, Rent the Runway reports that traffic to each of its five stores (located in New York, Washington, D.C., San Francisco, Chicago and Los Angeles) is up more than 100 percent year-over-year.

According to a June 2018 eMarketer report, the top reasons American women give for being more likely to shop in a store are they would want to see or touch an item, or they need something immediately — but that doesn’t mean that a text won’t go a long way. A main feature of Rent the Runway’s concierge service, for example, is designed to optimize the in-store experience.

Forrester, as early as 2015, reported that the ubiquity and familiarity of text messaging makes it an “ideal channel to win, serve and retain customers,” while a 2016 eMarketer report showed many customers prefer to send a text because it is faster and more convenient than a phone call.

Still, even though many retailers believe it makes sense to use text messaging to communicate with customers, only about 30 percent say they actually do, eMarketer found. Texting makes particular sense for Rent the Runway’s customer, who tends to be in her late 20s to early 30s. In a September 2017 study, about a quarter of Gen X and millennials reported that personalized, automated texts would interest them — and concierge-level styling takes it that much further.

Despite the ubiquity of texting, it has been relatively latent to catch on widely between customers and fashion brands. In 2015, Nordstrom became one of the first fashion brands to offer a service providing styling and purchase recommendations through text. More recently, Walmart’s retail incubator began testing an invitation-only, text-based shopping service called Jetblack, which provides same-day delivery from brands ranging from Walmart and Jet to Saks. (It was founded by Rent the Runway co-founder Jennifer Fleiss.)

More brands have attempted to navigate chatbots, which tend to lean quite heavily on intelligent automated scripts, rather than human interactions. High-end rental service Armarium, for example, has a bot called Armibot that uses customer-provided information to match them with a stylist.

Meanwhile, hotels including Hilton and Marriott have been able to turn a text-based concierge offering into a service customers actually use — which, in the case of Rent the Runway, might be a more apt comparison.

Sullivan said that, rather than being a fashion brand, Rent the Runway is really a “reverse logistics” company that also works to maintain the life of clothes; in that way, she compares the company to an airline or a hotel, for which “utilization” is paramount.

“Sometimes [our customer] is too busy, so it’s about speeding up the process,” Sullivan said. “Sometimes, she wants a styling element or needs help — it’s all about, ‘What are the use-cases?’”

Photo: Miha Matei Photography