Embracing the Elbow Bump
The optimist and introvert in me has come to appreciate aspects of the Corona Craze. The last week has been filled with prioritization of family and health, increased hygiene, home cooking, virtual meetings, and creative thinking. With the many things off limits, life is simpler giving us time to process and think about the bigger picture. Paradigms have shifted in an instant, reminding us of the most important, grounding elements of our life. From the turbulence comes creativity, as the saying goes ‘never waste a crisis.’ Jenn Hyman and I started Rent the Runway at the peak of the recession in 2008. Our graduating class set off a wave of entrepreneurship at Harvard Business School, with more students seeking to disrupt industries and pursue entrepreneurial dreams than ever before. Norms were challenged and alternate career opportunities were fraught with their own uncertainty.
Let’s dive in, what was going on in retail during the last economic downturn that led us believe that it was the time to start Rent the Runway. First off, on the supply side, in November 2008 retailers entered their holiday season slashing prices dramatically. Within the fashion industry in particular, designers who had spent decades building up their brands were left without control of their pricing models. Moreover, the items that retailers were buying were wardrobe staples (the little black dress) which was more likely to sell as a better consumer investment piece in a recessionary environment verses the editorial runway styles (one-shoulder pink Herve Leger). Bargain hunting was suddenly cool and smart, with digital sample sale businesses like Gilt Groupe and Rue LaLa on the rise. As more retailers went online, price comparison emerged in a way that hadn’t been previously possible. Meanwhile consumers were immersed in a world of social media, making each event, big or small a moment that would reach thousands and leave a permanent digital mark on your personal brand. Fast fashion players (Zara, H&M and Forever 21), emerged to take advantage of this moment in time and were the only growing portion of the fashion industry. There was a divide in the supply and demand sides of this industry, making it ripe for disruption. Enter Rent the Runway.
So where do I think the next wave of innovation lies? Are there industries that see supply and demand gaps or inefficiencies? Most front of mind at the moment are health, community, and food — the bare necessities of our day to day. An omni-channel approach is what will offer businesses the flexibility needed to best serve the greatest number of customers and weather macro-economic impacts.
1. Healthcare. In this past week, I have seen health-oriented startups opportunistically flex to accommodate a new set of circumstances. KHealth, a health care diagnostic app, has rallied to evolve its technology for self-diagnosis of Coronavirus, text based interaction with doctors, and data sharing. Pathspot, a device that lights up to detect pathogens on an individual’s hands with a 2 second scan, has ramped up production to service a broader set of retail locations and government entities and worked to share data they have compiled from hand-washing studies to better educate employers and the general public. Telemedicine and healthcare membership programs are getting more attention than ever. The healthcare industry has been inching towards omni-channel and this moment will accelerate that transition.
2. Community. Prior to the outbreak of coronavirus, we were already on our devices more than ever, leading people to crave a return to authentic 1:1 interaction. The coronavirus has highlighted consumers need for connectivity and community. Many continue to risk their health as they venture to their daily group workout classes, and others creatively have set up virtual wine nights and book parties to break through feels of isolation. I find myself, despite the less interesting content with social distancing and isolation, looking at Instagram more frequently, texting or face-timing friends, and opting to virtual group classes (Obe, Mirror, and Peloton) to connect. My kids are eager to resume their online classes as the education community has quickly adjusted to embrace Zoom. Longer term, I am optimistic for businesses like Super Great and Yoni Circle translating the power of virtual communities and storytelling that is emerging on digital platforms.
3. Food. Digital food purchases have gradually increased in the US, but are nothing compared to the likes of Asian countries. We are now seeing the importance of an omni-channel approach in this industry. The optionality that businesses like Walmart have to offer consumers in this moment between in store, on-line, and pickup enable it to adjust to best services consumers. Food and delivery services have stepped up to the plate, but are more taxed than ever. Splendid Spoon and Daily Harvest working to keep up their distribution knowing that shipping fresh and healthy meals (and supplements they have added on the fly) directly to consumers’ doors is more important now than ever. This moment will accelerate the transition of the US food industry towards omni-channel and digital distribution.
In this moment of uncertainty and stress, the silver lining is there. Fantastic leadership and creative thinking necessary for “Wartime CEOs” makes me optimistic that in aggregate we will come out of this stronger than we were before, ironically similar to the resistance our bodies build to viruses. I am hopeful for this chapter in history and our generation of creative problem solvers who will be put to the test to trail blaze how to make lemons into lemon tea.
