To break into the brick-and-mortar world, some digitally native retailers have opened shops inside department stores. However, they are also turning to their own stand-alone locations for larger spaces. Rent the Runway, in particular, is opening a 2,600-square-foot store in San Francisco after outgrowing its 1,800-square-foot space inside of a Nieman Marcus store in the city.
The company’s subscription business has been on tear during the two years since that location opened, growing by 150 percent on a year-over-year basis. At the same time, that business now accounts for half of the retailer’s revenue. In San Francisco, the company’s third-largest market, 83 percent of transactions by subscribers are “self-service.”
To help accommodate demand from subscribers who want to interact with Rent the Runway in a brick-and-mortar setting, the new store includes “self-service stations” that enable its subscription service members to return items and borrow new ones. Customers can complete that process without talking to a staff member. However, as in a traditional retail store, staff called “in-store stylists” are on hand to give recommendations tailored to each customer. Beyond taking advantage of the retailer’s subscription offerings, customers can rent individual items in the store for that black-tie gala or cocktail hour.
The new store comes months after the retailer announced a shift in the focus of its brick-and-mortar locations, from showrooms to what Glossy calls “logistical hubs” for its subscribers. Since the company faced an onslaught of people wanting to take advantage of in-store exchanges, the company was looking for ways to speed up the process. In January, Rent the Runway Senior Director of Engineering Hampton Catlin told Glossy, “We’ve been investing in tech that lets you rapidly check out, self-service, so people can get in and out.”
In terms of subscription offerings, Rent the Runway offers an Unlimited plan that enables members to borrow four items that they can exchange as frequently as they desire. However, the company also offers a more restrictive Update service for about half the price of the Unlimited plan: With that offering, customers can only borrow four items per month in total. At the same time, the retailer allows customers to purchase items they like for a potentially steep discount of 10 percent to 75 percent off, showing that consumers don’t have to just rent the runway — they can purchase it, too.
In Other Brick-And-Mortar News…
Crate & Barrel, the home decor retailer, is reportedly adding a full-service restaurant to its Chicago store. According to a report in the Chicago Tribune, the retailer may open a restaurant at its Oakbrook Center Store next year. To oversee the development of the menu, the retailer has reportedly tapped Chicago Chef Bill Kim.
Crate & Barrel CEO Neela Montgomery said in an email, according to the paper, “As a longtime destination for dining and housewares, we know that our customers love to entertain, and incorporating food and beverage offerings is a natural extension of the Crate & Barrel brand.”
The plans for the store, which will include the restaurant, aren’t final as of yet, but currently include dining space outdoors. The concept could also include cooking demonstrations and events, and the company is looking into the permits needed to enable customers to have a glass of wine as they wait for their table.
On another note, ALDI has announced that it is expanding its online grocery delivery service to all of its stores in the United States. According to Chain Store Age, the German supermarket company will use its partnership with Instacart to roll out the service to 75 major markets, including San Diego, New York City, Miami, Raleigh and Minneapolis. By Thanksgiving, it will be available in 5,000 new areas in 35 states.
The grocery retailer is no stranger to delivery: ALDI partnered with Instacart in March, first launching the service in greater Chicago, and in areas as far as Rockford, Illinois, after testing it out in three markets — Atlanta, Dallas and Los Angeles — in August. Last year, the company revealed plans to spend $1.6 billion on U.S. expansion and remodeling efforts. By the end of 2018, ALDI will reportedly look to remodel 1,300 U.S. stores and open 400 new stores. Its aim? To become the third-biggest grocery chain in the U.S.
Staffing has also become a challenge for retail companies. With unemployment at new lows, retailers had 757,000 job openings in July, which The Wall Street Journal said is roughly 100,000 more than they had a year before. In addition, the Bureau of Labor Statistics reported that the number of open jobs was higher than the number of people hired between March and June.
To that end, retailers are hosting “recruiting marathons” to help hire thousands of people. In addition, retailers like JCPenney and Kohl’s have started hiring seasonal holiday workers in June. Meanwhile, Macy’s announced earlier this month that it is hiring 80,000 temporary workers for the holiday season, as well as adding more employees to handle online orders. Around 23,500 of the seasonal positions will be based in facilities that support online sales — an increase of 5,500 positions compared to 2017.
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