Rent the Runway will offer resale and limited-edition designer merchandise through Amazon Fashion.
Rent the Runway and Amazon have long represented distinct ecommerce marketplace models. The former started as an on-demand service with fashion merchandise consumers could rent for a particular occasion, while the latter offers merchandise to buy in an array of categories. Now, they are joining forces.
The news: Rent the Runway will start selling merchandise through Amazon Fashion. The storefront will feature new and resale items that Rent the Runway sells on its website alongside its rental service.
What will be available? The Amazon storefront will have two categories of items from Rent the Runway:
What does it mean for the two partners?
For Rent the Runway, it extends the company's foray into direct sales beyond its own site, and gives it tastemaker credibility in the meantime. Rent the Runway launched resale in 2021, offering a way for people to shop its site without subscribing to the core rental business. That has become a way to offer its merchandise beyond its website, as shown in a resale partnership last year with Saks Off 5th. CEO Jennifer Hyman said working with the largest ecommerce platform brings “incredible brand awareness.” Such partnerships can bring a new form of growth. “They also showcase demand for our products beyond our community and allow more customers to experience exclusive data-driven fashion from our top design partners,” Hyman said, in a statement.
For Amazon: This partnership welcomes a recognizable fashion brand and fellow digital commerce innovator onto the platform in Rent the Runway. With Design Collective, it is also a way for Amazon Fashion to showcase work from top designers, and get access to items that aren’t available widely. These pieces are among the most popular at Rent the Runway, and effectively turn the fashion rental service into a discovery platform for new designers and looks. Now, Amazon will reap those benefits, as well.
Key quote: “At Amazon Fashion, we continually expand our assortment through strategic relationships with brands to inspire and delight our customers,” said Muge Erdirik Dogan, president of Amazon Fashion.
Rent the Runway's bottom line: The focus in retail is on profitability this year, as executives seek to preserve margins despite an expected consumer pullback. Rent the Runway made progress in this area in Q3 as it lifted its gross margin by 7%, while shrinking its net loss down to $36.1 million from $87.8 million the year before. This came after it laid off 24% of its staff to reduce costs in Q2. Selling on the largest ecommerce platform can help reach the kind of new audience that boosts sales, and the company said the costs of the partnership were already baked into the previously reported numbers.
Open to Amazon: The splashy collaboration is the latest for Amazon in a year that also saw Peloton and Gap open storefronts with the ecommerce giant. For years, digitally native and established mall brands alike were reluctant to collaborate with Amazon. It meant giving up control over the ecommerce experience, and there were concerns about how Amazon would use data. But a shift is taking place in a tougher environment for direct-to-consumer businesses, and retail in general. Amazon has a marketplace with lots of traffic, and it's a place where many consumers already search for their items. Brands are finding a way in. By turn, Amazon may also be more open to collaborations that generate new interest in the platform, and add trending merchandise that gives consumers a reason to keep returning. It's also worth noting that Amazon has been increasing fashion resale offerings, as What Goes Around Comes Around also signed on for a storefront in 2022.
It offers an important reminder: Things change, and that’s especially true when the environment gets tougher. What once seemed like a hard and fast rule may now be bendable, and even the most known quantities may be changing their approach, just like you. Revisit assumptions and practices, and new opportunities may emerge, even with old acquaintances.
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”
