Can I Borrow This Team5

Can I borrow this?

No. of customer interviews

Day 1 21

Day 2 13

Day 3 11

Day 4 20

Total 65

“Peer-to-peer fashion rental platform for women”

Claire Allison, Masha Breitmann, Wayne Chu, Chelsea Crowder, Seema Gohil

CANVAS EVOLUTION

Day 1:

Idea

• Create a peer-to-peer platform allowing women to rent clothes, shoes, bags and accessories from each other

• Solve: “I have nothing to wear”

“Refuse to get rid of anything I own”

Key Partners Key Activities Value Proposition Customer Relationships

Customer Segments

Website developer

Payment processing service (ex. Braintree)

Shipping partner

Drycleaner

Garment bag supplier

Fashion bloggers

High-end thrift stores

Travel / hotel resources

Sizing Technology

Building, hosting and maintaining an easy to use website

Inventory photography, editing & descriptions

Curating items

Payments (accepting & distributing)

Shipping & logistics

Monetize closets without having to sell items

Better economic value than current options (thrift / consignment)

Access to inventory outside of what is available for purchase

Access to clothing without having to pay retail prices

Providing an official channel for lending to friends (deals with the drama)

Revolving closet - answers the "I hate everything I own” issue

College campus (word of mouth - grass roots)

Social media

SEO

Customer referrals (incentive programs – reduced fee for x amount of users)

Borrower:

- 16-45 female

- Tourists / travelers both female & male

- Male 16-40 gay community

Lender:

- 25-45 female with <$250k annual salary

- 25-45 gay male with <$250k annual salary

Key ChannelsKey Resources

Website

College Campuses

Fashion Industry

Hotels or travel related sites

Garment Bags

Shipping Boxes

Photography equipment

Costs Revenue

Website development SEO

Garment bags Marketing / customer acquisition

Payment processing Shipping

Transaction fees:

- 20% charged to lender

- 5% charged to borrower

Insurance

Shipping / Drycleaning fees

Sell rental information to retailers

DAY 1 CANVAS

What We Tested: Are there interested borrowers?

• Spoke to college campus female students

• How do women currently dress for events?

• How much do they spend for different events?

• Would they consider renting vs. buying or borrowing?

• How much would they pay to rent vs. buy?

Hypothesis Result Takeaway

Women borrow clothes from each other

True, typically from roommates, close friends, siblings, mother

Not creating a new activity

Women are willing to rent items as well as borrow (pay for the same action)

True Idea of online rental platform was very appealing

Women don’t know their measurements

True

Women are unwilling to measure themselves & shop by measurements vs. size

False, would be willing to take that extra step and measure themselves to solve fit concern

• Send a measuring tape to women that don’t have one; potential marketing tool

• Can remove size as a feature on site

Using “real” women in pics vs. models would help borrowers estimate fit

True All pictures must display the item by the person whose measurements are being listed

Using real women vs. models and non-professional photos may impact the appeal and marketability of items and site

False, women are dissatisfied by the deception that professional models and photographers have

Don’t need to spend the money on models and professional photographers


College students are extremely price sensitive

False; price sensitivity dependent on income level, not age. Looking for value and quality

Segment market based on income levels

College students would be willing to pay less for a rental than a purchase

False; looking for a combination of value and quality

The % saved was not a driving force to rent vs. buy. More based on dollars available for that event

College students would be unwilling to pay for shipping / courier

False; Will pay for courier service for the ease

Build courier service fee into the model

That women borrow/shop clothes for an event based functions vs. everyday wear

True Channeling users on the website by event vs. item is OK

Day 2:

What we tested:

• Women who worked in fashion (retail / modeling) would be good lenders

• Hotels could be good channels & partners

Key Partners Key Activities Value Proposition Customer Relationships Customer Segments

-Website developer

- Payment processor - Braintree

- Shipping partner

- Courier Partner

- Drycleaner

- Garment bag supplier

- Fashion bloggers

- High-end thrift stores

- Travel / hotel resources

- Sizing Technology

- Website production & maintenance

- Inventory photography, editing & descriptions

- Curating items

- Payment processing

- Managing Shipping & logistics

- Inventory access (vs. direct network and/or purchase)

- Style & curation

- Cheaper than retail purchase; save $

- Solves fit dilemma by using measurements

- Real people in the photos

- Hassle-free delivery

- Revolving closet answers the "I hate everything I own” issue

-Monetize closets without selling items

- Better value than thrift / consignment/ donation

- Channel to lend to friends (damage, cleaning)

- repeating revenue stream

- Revenue on shelf inventory

- Additional service

- Access to new customers

- College campus (word of mouth - grass roots)

- College Ambassadors (various income ranges)

- Social media

- SEO

- Customer referrals (incentive programs – reduced fee for x amount of users)

Borrower: • 16-45 Females- social - borrow clothes /shop online

A: Income $10k-$50kB: Income $50k-$300kC: Income $300k+

• Travelers (female & male)

• Male 16-40 gay community

Lender: - 25-45 female with

<$250k annual salary- 25-45 gay male with

<$250k annual salary

Fashion bloggers



Key Channels

Key Resources Website

College Campuses

Fashion Industry


- Garment Bags

- Shipping Boxes

- Photography equipment

Costs Revenue

- Website development - SEO

- Garment bags - Marketing / customer acquisition

- Payment processing Shipping

• Transaction fees: - 20% charged to lender - 20% charge - 5% charged to borrower - Free

• Insurance

• Shipping / Drycleaning fees

• Sell rental information to retailers


Women that work in retail would be good lenders

True • Access to fashion through fashion allowance & samples

• Less restrictions than women that work for designer brands

Additional:• Need to determine restrictions

and workarounds for girls that work for brands

Models would be good lenders True • Receive lots of free items – most of which is never worn

• No restrictions from agencies• Enjoy the prospect of having

followers and being featured as trendsetters

Additional:• While merchandise type is ideal,

model sizing will restrict utilty

Hotels would be good channels / partners

False • Too late in the process flow • Customers do not request any

clothing / apparel servicesAdditional:• Partnering other travel services

such as AirBnB (“travel like a human” – “dress like a local”)

Day 3:

What we tested:• JUST DO IT!!!!!!!!

• Built a site and tested it with customers to get feedback

• 50 inventory items on a Wix site

• Tested the platform in Bryant Park

• Variables tested:

−Borrower profile

−Pricing

− Image quality and presentation

−Measurements


-Website developer


- Shipping partner

- Courier Partner (Urban Express)

- Drycleaner


- Fashion bloggers



- Sizing Technology



- Curating items



- Social acceptance

- Unique Inventory access (vs. direct network and/or purchase)

- Style & curation





-Clothing for destination


-Social validation

-Monetize closets without selling items

- Better value than thrift / consignment/ donation

- Channel to lend to friends (damage, cleaning)



- Additional service

- Access to new customers



- Social media

- SEO


Borrower: • 16-45 Female / Gay /

Men over 15- social acceptance- borrow clothes /shop online

A: Income $10k-$50kB: Income $50k-$300kC: Income $300k+• Travelers (female &

male)• 16-40 gay community

Lender: Female / Gay / Men over 15Social validation, tastemakers, access to fashion- 25-45 female with



Fashion bloggers,Industry



Travel Websites / AirBnb

Key Channels


College Campuses

Fashion Industry


- Garment Bags

- Shipping Boxes


Costs Revenue

- Website development - SEO- Garment bags - Marketing / customer acquisition- Payment processing Shipping

• Transaction fees: 20% lender , 20% thrift, 5%borrower - Free

• Insurance , Shipping / Drycleaning fees


First Order!!Rented for $300!!

Day 4:

What we tested:• Who are our lenders?

• Tested via in-person customer engagement:

o Setup table outside Equinox to recruit lenders

• Created Kookopa “Lender” website (www.kookopalenders.com)

o Scalable method via web based search

o Supported by Facebook Ads and Google Adwords

• Tested customer acquisition methods

http://www.kookopalenders.com/


-Website developer


- Shipping partner


- Drycleaner


- Fashion bloggers



- Sizing Technology



- Curating items



- Social acceptance


- Style & curation







-Social validation

-Monetize closets without selling items- Concierge service- Better value than thrift / consignment/ donation- Channel to lend to friends (damage, cleaning)



- Additional service - Access to new customers



- Social media

- SEO













Key Channels


College Campuses

Fashion Industry


- Garment Bags

- Shipping Boxes


Costs Revenue





EXPERIMENTS (LENDERS)

What we found out:

In-person Customer Engagement

• Setup table outside Equinox to recruit lenders

• Limited engagement due to time of day (morning) and low traffic location

• Interest from 8 potential lenders

−Baby Boomer segment showed surprising interest to be lenders

Continuing thought… How to match lenders and borrowers if lenders are from another demographic

which impacts style

EXPERIMENTS (LENDERS)Kookopa “Lender” Website (www.kookopalenders.com)



Campaign #1: Broad reach of 2.8MM people


Campaign #2: Targeted reach of 700k people (#consignment, #fashion)

RESULTS (LENDERS)

Kookopa “Lender” Website (www.kookopalenders.com)

• Google AdWords - $4.27 / click

• Facebook: 12 unique lender signups in <12 hours

• Click through rates / cost: Broad – 0.22% / $0.65, Targeted – 0.18% / $0.61

Impressions Reach Clicks0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Broad Reach Targeted Reach

0.22% 0.18%


Day 5:

So where did we end up?


-Website developer


- Shipping partner


- Drycleaner


- Fashion bloggers



- Sizing Technology



- Curating items



- Social acceptance


- Style & curation







-Social validation

-Monetize closets without selling items- Concierge service- Better value than thrift / consignment/ donation- Channel to lend to friends (damage, cleaning)



- Additional service - Access to new customers



- Social media

- SEO













Key Channels


College Campuses

Fashion Industry


- Garment Bags

- Shipping Boxes


Costs Revenue





Transaction fee:- 20% lender (rental price +

insurance + dry-cleaning)- 5% borrower

Order: $132

Courier

Revenue: $77

Rental Price: $100Insurance: $5Dry-cleaning: $10Shipping: $12Transaction Fee: $5

$6

$6 $10

Borrower Lender

Dry-cleaner returns item

Step 4

Step 1 Step 3

Step 2

Step 5

CUSTOMERS & VALUE PROPOSITION

CUSTOMER SEGMENTS: BORROWER

Initial Targeted Borrower:

• Women

• Age 15 - 25

• “Social Image”

• Crave Social Interaction

o Post everything to Facebook, Instagram etc.

o Social butterfly

• Desires to look good – fashion forward

• Reads People magazine, fashion blogs

• Shops at discount retailers (Gilt, the Outnet)

• Shops at sample sales

• Income < $150,000 annually

VALUE PROPOSITION (BORROWERS)

Pain / Need Gain

Fear of rejection Social acceptance

Insecurity Self esteem

Fear of loneliness Sense of belonging / fitting in; Social

validation

“Ugly Betty” syndrome Styling advice & guidance

Budget limitation Saving money

Clutter / Space Save closet space

Time, inconvenience, frustration with

buying

Hassle-free process

Uncertainty with buying something that

doesn’t fit

Confidence in look / feel with

measurements and real models

CUSTOMER SEGMENTS:LENDER ARCHETYPE

Initial Targeted Lender:

• Women

• Age 25 - 45

• Tastemakers / trendsetters

• Professionals, or work in fashion industry

• Enjoy social validation / recognition

• Not attached to their items – items aren’t splurges

• Spend large proportion of income on fashion

• Reads W magazine, InStyle, Vogue

• Shop at Net-A-Porter, Moda Operandi

• Income > $150,000

VALUE PROPOSITION (LENDERS)

Pain / Need Gain

Style Validation Recognition as a trendsetter / stylist

Way to monetize closets that are worth

while

Additional income

Reduce feel of waste Using the item / don’t feel like it was wasted

Feel good that you helped someone else look good

MARKET

Total Addressable Market: $104.5Bn

Served Market: $7.8Bn

Opportunity: $80MM

MARKET SIZETotal Market:• Annual spending in the US for

Apparel (includes male and female consumers over the age of 16)

Served Market:• Online sales account for 10%

of the total apparel market • 75% women

Targeted Opportunity:• Women only• US• Converting 1% of the online

apparel purchases to rentals

MARKET COMPETITION

Market Positioning

CHANNELS

CHANNELS (“GET”)

BORROWER

EVANGELISTS / FRIENDS

LENDER

CONSIGNMENT STORES

EVANGELISTS / FRIENDS

IMPERFECT TEST SITE

REVENUE & COSTS

KEY PERFORMANCE INDICATORS• Total website traffic vs. conversion rate

• Average number of transactions per user

• Average transaction value ($)

• RTR average value of $125

• Average income margins

• Inventory items per size

• Customer acquisition costs for both customer types (lender & borrower)

• LTV of customer

COMPARATIVE FINANCIAL ANALYSIS

Rent the Runway 2011 RTR revenue 20,000,000$ Average rental price 125$ # of Annual Transactions 160,000

Kookopa 2014 % share of customers 5% 8,000 Average rental price 75$ Transaction Value 600,000$ % Transaction Fee 25% 150,000$

UNIT ECONOMICSPer Unit Cost AnalysisRetail Value 250.00$ 750.00$ 1,250.00$ Rental Price (10%) 25.00 75.00 125.00 Insurance (minor) 5.00 5.00 5.00 Drycleaning 10.00 10.00 10.00 Total Item Cost 40.00 90.00 140.00 Shipping 12.00 12.00 12.00 Total Cost to Borrower 52.00 102.00 152.00

Revenue: Transaction Fees 25% 10.00$ 22.50$ 35.00$ Insurance 25% 1.25$ 1.25$ 1.25$

11.25$ 23.75$ 36.25$ Costs:Garment Bag (0.50)$ (0.50)$ (0.50)$ Cust. Acquisition (5.00)$ (5.00)$ (5.00)$ Total Costs (5.50)$ (5.50)$ (5.50)$

Net profit/item 5.75$ 18.25$ 30.75$ Margin % 51.11% 76.84% 84.83%

Breakeven AnalysisStartup Costs 200,000$ # transactions needed 34,783 10,959 6,504 % of RTR 2011 market share 21.74% 6.85% 4.07%

SUMMARY & NEXT STEPS

So much more to do…..

• Find the fit between lenders and borrowers

• Run A/B tests for:o User uploaded pictures vs. professional photographs

o Models vs. real people on marketing vs. product pages

o Pricing models

o Pricing draws (discount on value, $ value vs. retail etc.)

o Advertising on pains vs. gains of value proposition

• Test full process (delivery, insurance, payments)

• Research costs of concierge service

• Partner discovery: AirBnb, consignment stores

Can I Borrow This Team5

Education

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