Netflix For Clothes

As a Netflix user, I have come to enjoy the simplicity and convenience of updating an online queue and having new movies to watch come in the mail. According to a New York Times article this morning, another company seeks to emulate the Netflix model -- but for high-end clothing. This is an intriguing idea to be sure. I just worry about the logistics.

Here's the Times explaining:

The mail-order service, which finishes the testing phase on Monday, allows women to rent dresses from notable fashion designers like Diane Von Furstenberg, Hervé Léger and Proenza Schouler for roughly one-tenth of what they would cost to buy in a retail store.

The rentals run $50 to $200 for a four-night loan and are shipped directly to the customer's doorstep. After wearing the dress, she puts it into a prepaid envelope and drops it in the mail. Dry cleaning is included in the price, but damage insurance costs $5, and in the case of outright destruction of the dress, the renter is responsible for the full retail price.

For women who hate to wear the same thing twice, that's like 10 dresses for the price of one -- except you don't get to keep it after wearing it 10 times. I imagine that fashion lovers who don't have the wealth to purchase expensive dresses regularly would love this idea. There are several worries that come to mind, however.


First, what if the dress doesn't fit? My biggest issue with online clothes shopping has been precisely this issue. Here's the company's solution, according to the Times:

In addition, the site offers returns within 24 hours for any reason and will include an extra size of a first dress at no additional cost.

I've heard about a service like this for purses, but that's a lot different from clothes, since fit is irrelevant. I worry that this policy, while great for the customers, could drive shipping costs through the roof for a clothing model. If you rent a $500 dress for $50, the company definitely doesn't want to have to ship it back and forth more than once. So if you don't like how the dress looks on or if it's the wrong size, then the additional shipping incurred will begin to eat through a significant portion of the company's profit margin.

This is also much different from Netflix, first because shipping DVDs is cheaper, and second, because the already customer paying for the time it takes to ship a replacement, since customers are charged per month, not per item.


Then there's the red wine problem -- what if something happens to the dress? Well, then the customer is responsible. For Netflix, that's not a huge deal. A DVD only retails for $15-25. For a $500 to $2,000 dress, that would hurt. While you might argue that the same can happen to clothes you actually purchase, that's an expense already incurred versus a liability you might not be able to afford.

Fashion Changes

The Times notes another pitfall:

Rent the Runway declined to discuss its business strategy, but it is clear the company faces several risks. Unlike DVDs, fashion changes quickly, and there is no guarantee that the company will be able to rent each dress enough times to cover its costs.

This is a huge difference in business models. Netflix's DVD library will be good for decades. Sure, newer movies are more popular for a time, but with a service like this catering to fashion, the trendy items are all that matter. And fashion changes quickly.

I'll be curious to see how this company does. I really do think it's a fascinating idea. I just hope its business model has all the kinks worked out -- couture is a lot different from DVDs.