Rent the Runway
Rent the Runway was an established startup when Vinay was asked to advise them. With a brilliant business model in tow, Rent the Runway was doing very well and already operating on a small margin. Together, Vinay and Jennifer (RtR’s founder) optimized their operations with a solution based on consumer behavior. They identified that very high-end dresses would re-sell for good prices even up to 2 years out. By tracking consumer behavior, they recognized that customers were more likely to click on a suggested dress if it were very expensive. But more often than not, they were simply “window-shopping” and ultimately returned to the cheaper dress. With this information, they were able to develop a solution for women who wanted the more glamorous dress, but were restricted to cheaper options. If a shopper spent more time viewing the pricier option but ultimately chose the lesser, Rent the Runway would offer a free upgrade at checkout. The renter could get what they really wanted, for free.
The effects of this were profound. It allowed Rent the Runway to begin liquidating their inventory gradually, leaving behind only the very nice dresses (which were easy sold, anyway). It was a win-win!