Rent the Runway Case Analysis
Executive Summary Rent the Runways is an online designer dress renting website, that allows its customer to rent the newly released designer dress with 10% of the retail prices. Delivering female customers self-confidence and a powerful emotional experience is the company objective and target for Rent the Runway. With a successful website launch and increasing customer demand, Rent the Runway is now facing a question of whether to raise the second round of funding and whether to add accessories and jewelry to its current product range. My recommendation for Rent the Runway is that they should raise the second round of funding, but instead of expanding its existing service, it should focus on improving operation and hire new CTO to solve its technical issues for its website and warehouse system.
Rent the Runway operates in the U.S. Formal Wear & Costume Rental industry (Capital IQ). This is a highly concentrated market meaning that top players account for over 70% of industry revenue. The four key external drivers are marriage rate, the number of adults aged 20 to 64, per capita disposable income, and the number of college students. Rent the Runway generates most of its revenue by renting the designer dresses online to female customers. The designer apparel business generated $149 billion in 2008 retail sales to women in the U.S. – $80 billion from dresses alone (Thomas, 2012).