Rent the Runway Case Solution

1. Describe the founders' approach to customer discovery. What did they learn? Was their approach effective or not? Evaluate it.

The idea for Rent the Runway came to Jenifer Hyman when she observed her younger sister’s desperation of buying a new designer dress even if that particular item was out of her budget. This desperation was mainly due to two reasons. The first one was that despite having a number of designer dresses already in her closet, Hyman's sister wanted a new dress since she didn't want to be photographed in the same dress twice. Secondly, Hyman’s sister was a fashion enthusiast as most people of her age were and loved buying trendy and latest fashion pieces. This led to the ultimate realization by Hyman of how the fashion system was actually flawed as young women who truly wanted these designer dresses weren’t able to buy them due to lack of affordability. As a result, designer brands were missing a major business opportunity. This is how the idea of dress rental service – Rent the Runway came about by identifying the pain points of a particular segment through observation of surroundings. 

While observing a target segment in their natural habitat, identifying their pain points, and then coming up with a solution for that problem is a good approach to customer discovery, it is still recommended that the Rent the Runway founders should have taken other steps to further clarify from the segment itself whether that’s a solution they are looking for or not. For this purpose, the Rent the Runway founders could have used surveys, in-depth one-on-one interviews or even focus groups to get people to talk about fashion, designer dresses, and their opinions on the topic. These three methods of customer discovery could have further solidified the business idea as it would have come directly from the target segment itself. Nevertheless, ethnography is still a great way of identifying customer needs.