Shopping Centers Today

JUL 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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J U L Y 2 0 1 8 / S C T 19 Runway success Physical retail cleared Rent the Runway for takeoff By Ben Johnson J ennifer Fleiss, co-founder and former CEO of online retailer Rent the Runway, had no intention of opening a physical store when she started the company in 2009. "Initially, we did not want to launch physical retail stores, but we kept lis- tening to our customers," said Fleiss, a RECon keynote speaker. She and part- ner Jennifer Hyman opened a test space on the fourth floor of a New York City building, and the feedback was overwhelm- ing. "That was lightning in a bottle," said Fleiss. Rent the Runway is an online service that rents out designer dress- es and accessories. The co-founders pioneered the concept of an $89 monthly sub- scription service through which cus- tomers can rent up to four dresses at a time. They also struck a deal with Henri Bendel to open a space in the retailer's flagship building on New York City's Fifth Avenue. This pro- vided an essential learning opportu- nity for an expansion into physical retail. In December 2016 Fleiss and Hyman opened a 4,000-square-foot flagship in downtown Manhattan. Fleiss, the daughter of a real estate developer, has a demonstrable appre- ciation for the industry. "To me there is no greater role of entrepreneurship than that of real estate," she said. "There is no industry that has as much hustle, grit, competitive spirit and energy as the real estate industry." Fleiss got her entrepreneurial start at the age of 8, with a lemonade stand. Her defining moment came in November 2008, when Harvard graduate school colleague Hyman told her about a sister who had bought a $2,000 Diane von Furstenberg dress to attend a wedding. This got the young ladies to thinking, and they came up with a plan for a business that would enable customers to rent such items online. In a bold move, they e-mailed von Fürstenberg to explain the idea, and they managed to sched- ule a meeting with that fashion icon for the very next day. "She basically spent an hour and a half telling us what was wrong with our idea, relating the challenges her own business was going through," recalled Fleiss. "All businesses have challenges and times of change, and I think in those moments of change [may] often come the most opportuni- ties or the bright shiny ideas." Out of that meeting emerged a revised plan — and the launch of what became a successful company. "We built a business that disrupted an industry," said Fleiss. In May 2017 Fleiss stepped down as CEO of Rent the Runway to lead Walmart's Code Eight — the first portfolio company in that company's incubator program. In one sense, Fleiss is something of a physical-store convert — and a seem- ingly zealous one at that. "Where else," she said, "can you more fully have the embodiment and feeling and energy of a brand than when you walk into a store? A number of brands are realizing the power of enforcing their community and the experiential elements of what they are doing with a physical presence." Ultimately, Fleiss says, she wants to do her part in driving retail's future. "Shopping can be delightful," she said. "It can be experiential; it can be enjoy- able. Shopping has been made into a chore. You settle for acceptable ship- ping rates. You settle for OK pricing. I don't think that has to be the case. Let's bring back the delight in brands. We can no longer consider physical retail and e-commerce as separate. They are two parts of a whole; they have the power to make the overall consumer- value proposition more powerful." n Rent the Runway's first physical store Jennifer Fleiss at RECon

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