RentTheRunway.com: High-Fashion Party Frocks for Rent

There are some things to be thankful for, because of the recession: Web-based purveyors of discounted fashion are thriving, and even when the economy comes back, we'll still have them around. Recently there was Gilt Group, which has become a mandatory destination for fashionistas. And now there's Rent the Runway, a new site where you can rent a dress by a top-tier designer, for a piddling 10% of what the dress costs. That amounts to $50-200--which implies some pretty fancy duds.

The logistics are simple: You browse their collection of dresses, pick one out, and it's delivered to you the next day in not one, but two sizes. (New Yorkers can get a dress, same day.) Afterwards, you drop it back in the prepaid package, and mail it back.

Fractional ownership has actually been sort of the rage recently--ranging from super-high-end vacation homes to supercars to handbags. But this isn't ownership--it's simply rental. And while lots of these businesses exist they haven't usually been purely online businesses. Moreover, they haven't focused on current fashion--rather, a more dowdy collection that's relatively timeless.

RTR will have to pull off something different: Nailing a very specific demographic who'll all want roughly the same thing. Otherwise, there's no way to get pay back on a dress that will remain fashionable for two years, max. So it makes sense that the membership is limited: Better to get word of something like this out virally before opening it to the masses, just like Gilt Group did. And better to define a very specific aesthetic. If your users have tastes that are too varied, you'll be stuck with a lot of dead stock.

Lots of interesting style start-ups are trying to crack that curate problem. For instance, SVPPLY. The lesson being that mass marketing is hard, but if you seal away a very specific clientele, you might just be able to create high margins on a relatively small user base.

[Via SpringWise]