1) Rent the Runway expanded its partnership with Nordstrom, a positive move for both parties and a risk-adjusted strategy for the rental company to stay ahead of the pack.

WHAT HAPPENED: Rent the Runway expanded the number of Nordstrom locations that feature its drop-boxes from five to 22 across the U.S. Nordstrom will also incorporate its inventory with Rent the Runway’s and the two companies will collaborate to create clothing together, available at both Nordstrom and Rent the Runway.

WHY IT MATTERS

  • The strengthened partnership helps both companies further their reach and solve their respective problems. In addition to customer acquisition, the partnership lowers shipping costs for Rent the Runway, enabling it to return items more frequently and in bulk. The result is more inventory liquidity, which means customers can access products faster, increasing the value of its Unlimited service. Rent the Runway previously relied on WeWork to serve this role (it had drop-boxes in 15 WeWork locations), but with uncertainty around WeWork’s future, Nordstrom is a more reliable and relevant partner.
  • Rent the Runway’s partnership with Nordstrom is less risky than Le Tote’s acquisition of Lord & Taylor. Rent the Runway receives all of the benefits of partnering with a legacy department store—a physical presence, inventory absorption, data sharing, and customer acquisition—but it is not directly responsible for the health of Nordstrom’s business. Le Tote, however, which bought Lord & Taylor, is now financially dependent on turning around the struggling legacy retailer. For a company with enough logistics issues on its hands, this partnership allows Rent the Runway to focus on building its own infrastructure while using Nordstrom to help improve its marketing and operations.

2) Marie Kondo launched an ecommerce platform, which expands her empire but risks contradicting the framework that made her famous in the first place.

WHAT HAPPENED: Marie Kondo, the Japanese author, Netflix star and organizational consultant, launched KonMarie, her ecommerce website featuring curated products from over 150 brands. The product offering includes organizational tools, decorative items for the home, apparel and books.

WHY IT MATTERS

  • Kondo’s ecommerce platform contradicts the less-is-more mentality that she urges her fans to follow. Kondo’s work is built upon the idea that extraneous objects detach humans from the people and experiences that actually matter to them. She encourages her followers to reassess their possessions and to only keep items that “spark joy.” Kondo might argue that her ecommerce platform connects people with more products that are helpful organizationally or do illicit joy, but introducing more products into the world is still questionable.
  • If Kondo wants to further monetize her platform, she should build a product business that propels her ethos. After her book remained on the New York Times best-seller list for 112 weeks, the paper reported that consignment stores saw a 20% increase in inventory—illustrating the effect Kondo’s work had on Americans. A more purposeful business that promotes resale, environmental sustainability, or even renting would strengthen her role as an organizational expert, further her message and benefit society as a whole. As consumers continue to shift away from ownership, there is no better time for Kondo to launch a business that makes it easier to declutter. Her newest entree into the field is too far removed from this reality.

3) Studs launched online and in New York City to change the piercing industry, which was once dominated by Claire’s and tattoo parlors.

WHAT HAPPENED: Studs, an ear-piercing and jewelry brand, opened a store in Soho this week. The brand currently focuses only on ear-piercing and costs $35 for one hole and $50 for two, with jewelry ranging from $30 to $180. Studs offers private piercing rooms, uses only needles versus piercing-guns, and offers a retail environment that is attractive to millenial and GenZ consumers. The brand raised $3 million in seed funding, led by First Round Capital, to open its first store and has plans to open pop-up shops and kiosks.

WHY IT MATTERS

  • Unlike its competitors, Studs is unbundling the traditional ear-piercing model by focusing on transparency and the in-store experience. With rising interest in piercings and highly curated ears, fine jewelry brands like Maria Tash, Merjuri, and The Last Line offer ear-piercing in-store as an added service. But the jewelry itself remained the focal point, while Studs is most concerned with the piercing experience. Customers are often unsure of the price for a piercing, a lack of transparency that Studs aims to rectify. Studs makes it easier and more economical than ever to have a highly styled ear.
  • Studs lays the foundation for an omnichannel brand experience that can drive repeat purchases. Through its unique and specialized retail environment, marked by personal styling and a high level of service, Studs has the potential to build strong customer relationships by facilitating follow-up style sessions online or in-store once the piercing heals, encouraging customers to buy more earrings later. This could help the brand build community, which is top-of-mind for its young customer base, but it will take time for this to play out.

4) Gucci opened a client service center in the U.S., as it aims to offer personal service to customers outside of its retail stores.

WHAT HAPPENED: This week Gucci opened its first North American client service center, Gucci 9 Hudson, in Jersey City. Gucci currently operates client service centers in Florence, Tokyo, Singapore and Seoul and plans to open more. The client service teams answer customer inquiries by phone, text and video chat. The brand designs each center to resemble a Gucci boutique.

WHY IT MATTERS

  • Gucci client service centers employ a hybrid retail sales and customer service model, which aims to increase connection with high spending millennials. In February, after Gucci presented a turtleneck sweater that critics said resembled blackface, the brand had to rebuild after the ensuing PR-backlash. Gucci offered a public apology and laid low on social media for the months following, but mentioned the impending launch of the client service centers around this time. The brand hopes that the centers will provide smartphone-addicted shoppers with high levels of service both inside and outside of its stores, which could help Gucci rebuild trust with younger shoppers and those who were turned off by its error in judgment.
  • Client service centers are among Gucci’s many initiatives to increase market share in 2020. Despite its recent controversy, Gucci holds the third spot on Lyst’s list of the hottest brands in 2019, even though it has since fallen from its first place position in 2017. The brand also announced plans to open a Michelin star restaurant above its Beverly Hill store, a licensing deal with Disney, as well as augmented reality technology in each of its 484 stores. But these initiatives, alongside the high-cost of decked out customer service centers, don’t address the need for continued product innovation, craftsmanship and overall brand messaging that led to Gucci’s exponential growth between 2015 and 2018. While cost is no object for any luxury brand, let alone Gucci, it needs to remain focused on delivering a modern yet time-tested value proposition and not get distracted just to chase a revenue goal.