Rent The Runway: Organizing Around Analytics

Dolce and Gabbana.

Vera Wang.

Narciso Rodriguez. Hervé Léger.

If you know them and love them but don’t have the budget to buy their fabulous fashions, there’s a solution: Rent a designer dress.

Rent The Runway enables just that: The “collaborative consumption” startup rents designer “occasion” dresses and accessories — for weddings, parties, black tie affairs — at a fraction of what it would cost to buy them. The company, founded by two Harvard Business School classmates, caters to its savvy, fashion-forward clientele: It offers a free second size (a must); on-call stylist advice; and, a new feature on the site, thousands of customer submitted reviews and photos of designer dress moments that (this is important) can be parsed through individual customer measurements.

These customer experience services are, in no small measure, what sets Rent The Runway apart from its small pool of competitors. And they’re driven by data and analytics — insights that are, according to Vijay Subramanian, chief analytics officer at Rent the Runway, no easy task to operationalize.

I spoke with Vijay Subramanian as part of our fourth annual look into how data and analytics are impacting global management practices [see our interim report]. He explained how he got started with Rent The Runway (a Bain Capitol investor connected him with the CEO), how his role evolved to a C-suite position (executives realized the value of data insights) and the ways in which Rent The Runway organizes around analytics to maximize customer experience.

To understand how all of these pieces come into play, it’s important to know how Rent The Runway operates. Like any traditional e-commerce business, customers visit the site and select products — dresses and accessories. They reserve these products, pay through an online checkout mechanism, and the products are shipped to the customer.

Where Rent The Runway’s process differs from others is on the back end: fulfillment, logistics — and especially, brand-building.

This is where analytics comes in.

Unlike traditional e-commerce companies that fulfill orders as they come in and process returns separately, Rent The Runway’s inventory is not just in a warehouse; it could also be already out to the customer or in transit or at various stages of being processed.