Rent the Runway, Nordstrom team up to boost convenience, attract customers

NEW YORK (Reuters) - Nordstrom Inc JWN.N and Rent the Runway announced a partnership on Thursday that aims to draw more foot traffic into the department store while making the clothing rental service more convenient so it can improve service to existing customers and attract new ones.

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Rent the Runway “drop-off boxes,” where subscribers can quickly scan and return rented items, will be placed inside four Los Angeles-based Nordstrom stores, three of which are smaller “Nordstrom Local” stores billed by the chain as “a convenient drop-in hub” closer to residential areas.

Los Angeles is Rent the Runway’s fourth largest market, where there is a “particularly high density of subscribers living or working close to the Nordstrom Locals in West Hollywood, Brentwood and Downtown LA,” the clothing rental company said.

The idea, executives from both retailers told Reuters, is to make it more convenient for Rent the Runway subscribers to drop off rented items and explore other offerings at Nordstrom Local stores, where shoppers can consult personal stylists for fashion and beauty services, have clothes altered or make quick returns.

The partnership between the Seattle, Washington-based retailer and clothing rental service, based in New York City, is the latest example of how retailers are teaming up to fend off fierce competition from online retailers like Inc AMZN.O and fast-fashion brands like Inditex's Zara ITX.MC and H&M HMb.ST.

In April, struggling upscale U.S. retailer Neiman Marcus took a minority stake in online luxury reseller Fashionphile.

“We’re excited to see the amount of customers that end up using the service with Rent the Runway as well as the customers we’re able to introduce into our service programs like styling,” said that Shea Jensen, Nordstrom’s senior vice president of customer experience.

“Rent the Runway obviously serves a growing customer base,” she added.

Last month, the department store operator reported disappointing quarterly results, hurt by the rollout of a new loyalty program and slow sales of full-priced women’s clothing.

Maureen Sullivan, chief operating officer at Rent the Runway, said she expects the partnership to improve customer loyalty and ultimately help the company grab more market share.

“We’ll expect to see over time some loyalty improvement,” said Sullivan, adding that “by having these physical drop-off boxes... we’re able to activate even more subscribers.”

Since launching the Rent the Runway drop-off box service with WeWork in October 2018, the company has seen over an 180% increase in returns directly from customers, the company said.

Reporting by Melissa Fares in New York; Editing by David Gregorio