Where do clothing rental and subscriptions like Rent the Runway fit in a world that works from home?

Where do clothing rental and subscriptions like Rent the Runway fit in a world that works from home?

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After signing up for Rent the Runway Unlimited in
February, Margit Malcreda quickly became a clothing rental convert. As a public
relations professional in New York City, she started using the service for the
same reason most of its customers do: to access thousands of designer items for
the low cost of $159 a month, or even less with one of the brand’s many
promotions. Malcreda would swap her inventory six times a month, receiving up
to four new pieces of her choosing with each exchange, and she loved almost
everything, so the membership was entirely worth it.

But when the coronavirus pandemic broke out in mid-March and the 26-year-old was ordered to work from home, she began wondering if it made sense to keep paying for the service. “I don’t have a huge use for it at home, and I find myself feeling nervous about where the clothes have been, who has been in them, and the potential for a contaminated garment bag,” she says. “So, I’m really considering pausing, if not canceling, my subscription until the dust settles here in New York.”

Malcreda is far from alone in feeling this way, and in fact, many of the hundreds of thousands of people who use clothing rental services like Rent the Runway are ditching their memberships, or contemplating doing so, during this unprecedented global crisis. With many people nationwide (and around the world) now working remotely and concerns over saving money mounting as the economy continues to take a hit, clothing rental can seem like an unnecessary expense—and one some customers have no problem dropping. Key players in the billion-dollar clothing rental market are aware of this growing trend, and they’re already making attempts to ease members’ anxieties. But even as the threat of cancellations looms, they appear adamant that demand for their services won’t stop.

Even before COVID-19 cases in the United States started to rise, Rent the Runway anticipated that its customers would likely have some questions surrounding the company’s cleaning protocols. In an email sent to members on March 4, the company stated its intent to “proactively provide details and additional transparency” around its cleaning process, noting that all of its garments are steamed at temperatures between 248 degrees and 302 degrees Fahrenheit, a level that kills flu viruses according to the CDC. Rent the Runway also updated the FAQs page on its website to include information about its practices as they relate to COVID-19, and it announced on March 14 that it would close its five brick-and-mortar locations across the country until further notice. The company acknowledges some of its customers may still opt out of its rental services for the duration of the pandemic, instead offering discounts and incentives for those who pause their memberships rather than cancel them outright.

Nuuly is a monthly rental subscription service for women’s apparel.
Courtesy of Nuuly

Nuuly, another popular clothing rental service, has taken similar measures, adding details of its COVID-19/coronavirus precautions to its site, with particular emphasis on the 250-degree steaming process that all garments undergo. Nuuly has yet to communicate this information directly to customers. The brand says, however, that it has made it easy to cancel or pause memberships. “Users can choose to pause their subscriptions for one, two, or three months, and they can extend it on a month-to-month basis,” a Nuuly representative tells Fortune. “We know our subscribers are navigating uncertainty right now, so if they choose to pause, we will be here with open arms when they are ready to resume the service. The comfort and safety of our consumers are always a top priority.”

While the rental space has been hit hard by the coronavirus pandemic, other membership-based clothing services have witnessed unexpected changes in their business over the last month. Trunk Club, an online personal shopping platform from Nordstrom that pioneered the try-on model in men’s clothing, sends users a curated selection of up to 10 items on a monthly, bimonthly, quarterly, or on-demand basis and lets them choose which to buy and which to send back. Because customers can adjust the frequency of their trunks at any time and the service itself is free of charge, the company hasn’t really experienced actual cancellations, but it has noticed other emerging trends. “We have seen a lot of customers ask us for more loungewear and athleisure that they can wear while they are working from home,” a Trunk Club spokesperson says. “And some of our stylists are also helping their customers clean out their closets through video chat.”

As more and more studies come out claiming the benefits of getting dressed—even when it’s easier to wear the same pair of sweatpants for days on end—clothing rental companies and stylist services hope that their products will provide a beacon of normalcy to members. Rent the Runway, for example, says that many of its customers are using their rentals for this very reason and that its services can actually be an emotional and mental benefit.

Carolyn Hsu, who serves as the head of content for Seattle tech company RealSelf, says that her Rent the Runway Unlimited subscription has come in particularly handy during Zoom calls and virtual meetings. “I’m in Zoom meetings throughout the day and usually keep the video on so I feel like I’m in the room with the rest of the team,” she explains. “Regardless of whether I’m physically in the office or in virtual meetings, I usually like to wear something that makes me feel confident in a professional setting.”

Hsu says the coronavirus outbreak has made her rethink some of her consumption behaviors, and she’s been renting clothing at a slower pace and holding onto items for longer as a result. For the time being, though, she says compliments on her top or jumpsuit during Zoom calls still make her unlimited membership worth it.

More coronavirus coverage from Fortune:

—How to get a refund on your Broadway tickets after coronavirus shut down
—The oil sector takes its next hit: Coronavirus on offshore rigs
—Some of the most extreme ways companies are combating coronavirus
—How luxury designers in Italy’s fashion heartland are facing coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks coronavirus can help business
—Coronavirus may not be all bad for tech. Consider the “stay at home” stocks

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.

How Samasource’s CEO helped turn a non-profit into a fully sustaining for-profit

How Samasource’s CEO helped turn a non-profit into a fully sustaining for-profit

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.

I had been planning to meet this week with Wendy Gonzalez, president of Samasource, the company that hires workers in developing countries to perform tasks for tech-industry clients. Instead we spoke on the phone from our respective homes. The subject was work, and we both were carrying on with it despite the circumstances.

Gonzalez joined Samasource in 2015 when it was a non-profit tasked with “moving from a grant-funded startup to a fully sustaining for-profit.” The outfit’s founder, Leila Janah, had initially been unable to raise money for what felt to venture capitalists like a philanthropic effort. Gonzalez became interim CEO in January when Janah died at age 37 of cancer.

As we all ponder what the world will look like a few months out, Samasource provides some hints. It hires exclusively in places where workers earn less than $2 a day, including Kenya and Uganda. Its primary focus is on machine-learning training data—in other words, using humans to tag data that train computers. Facial-recognition attributes for Microsoft’s laptops and visual search cues for Walmart’s online store are two examples of where it’s provided its work. Gonzalez says e-commerce and biotech are two promising areas of expansion. Samasource also has helped Getty Images identify information to accompany photos.

What started as a do-good project is doing rather well.
Samasource had revenues of $25 million last year. It employs more than 3,000
people, including 200 staff members in places like San Francisco, Montreal, New
York, Costa Rica, and the Netherlands. (The “agents” who do the work for
clients are full-time employees.) It raised nearly $15 million a year ago.

I asked Gonzalez if Samasource competes against the big IT
outsourcing businesses. It does, and also against “crowdsourcing” tools that conglomerate
user feedback to train computers. Samasource, she says, benefits from focus.
“This is what we do,” she says, compared with the many tasks of the
outsourcers.

Every conversation these days turns to the coronavirus. She
says the countries where Samasource operates are hyper-attuned to infectious
diseases because of past crises. Incidences have been low, and she hopes they don’t
rise.

***

A thought exercise: When a CEO horribly bungles their job and everyone knows it, the board fires the executive. If there were some way for Mitt Romney, to choose one well-qualified example, to become the Republican nominee in 2020, would businesspeople support his candidacy over the incumbent?

Adam Lashinsky

@adamlashinsky

adam.lashinsky@fortune.com

This edition of Data Sheet was curated by Aaron Pressman.

Coronavirus is bringing all sorts of societal issues to the surface

Coronavirus is bringing all sorts of societal issues to the surface

Coronavirus hysteria is fully setting in. 

My inbox currently houses emails about three cancelled
events, a pitch about “how business leaders are better positioned to tackle coronavirus
than politicians,” and a note to Fortune staff about working remotely.

And Fortune’s not the only company that’s urging
people to stay home. Amazon yesterday told employees in New York and New Jersey
to work from home, if they can, throughout the month of March. Salesforce,
Facebook, Microsoft, and Twitter issued similar notices.

Tools like Zoom and Slack facilitate remote work, but
coronavirus fears are putting the idea to test on a scale we’ve never seen
before. It’s a giant human experiment that will show companies whether it’s
still possible to communicate effectively and do business as usual. 

Only 42 million Americans, or about 29%
of the workforce
, are able to work from home. Here’s an interesting wrinkle
in the whole debacle of shifting to online work: Federal Communications
Commissioner Jessica
Rosenworcel explained to Fortune
on Monday that “the coronavirus is
exposing hard truths about the digital divide in this country.”

According
to the story
, the actual number of Americans lacking access to high speed
broadband is a source of dispute. While the FCC has suggested the number is
around 21 million, Rosenworcel says the actual number is much higher, because
the agency uses a methodology that concludes everyone in a census block is
wired if even a single subscriber has broadband. 

It’s fascinating to see the various work obstacles the coronavirus panic is bringing to the surface. Feel free to share your thoughts about some of the unintended consequences from working remotely in the face of mass uncertainty. 

ODD NEWS: Sequoia is walking away from Finix, a San Francisco-based payments infrastructure company, over a purported conflict of interest. The firm is also handing back its board seat, information rights, shares and full investment. According to TechCrunch, Sequoia just walked away from $21 million because it realized that Finix competes too directly with Stripe—after it wrote a check…Mmmm somehow I feel like this isn’t the full story. If you have more information, you can contribute to our anonymous tip box here.

Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 

How 5G promises to revolutionize farming

How 5G promises to revolutionize farming

Over the next several years, superfast 5G mobile networks promise to shake up a variety of industries, particularly those on the cutting edge, including technology and automotive. But 5G, the wireless successor to today’s 4G, may also revolutionize the farming industry, which has long been slow to adopt new innovations.

Wireless sensors connected through 5G could monitor field conditions and detect when crops need watering, pesticides, or fertilizer, experts say. It could also help with tracking livestock and guiding agricultural drones and self-driving tractors.

“5G has the potential to have a transformative effect on the global economy through a number of different verticals, and farming certainly is one of the most prominent ones to consider,” says ABI Research analyst Leo Gergs.

The end result for agriculture, in theory, would be improved crop yields and higher-quality produce. But actually making the promise a reality is unlikely to be quick or easy.

While major wireless carriers Verizon, AT&T, and T-Mobile are racing to install 5G, they’ve so far focused only on metropolitan areas because of their high concentration of potential customers. It will take years before their 5G networks are widely available in rural areas, meaning most farmers will have to wait.

“5G will probably not have a tangible impact on farming for three to five years,” says Bill Morelli, an analyst with IHS Markit.

Many farmers have already installed sensors in their fields that are connected using 4G, which operates at up to 100Mbps. In comparison, 5G speeds of up to 10Gbps are expected. The difference allows for faster connectivity between devices along with enabling more devices to connect to a single cell tower.

“Sensors are already used in farming to measure and report upon environmental conditions such as rainfall, water content, nutrients in the soil, and ground temperature,” says Simon Forrest, an analyst at Futuresource.

Upgrading to 5G could increase the impact of the technology by improving connection speeds and allowing for devices to more effectively communicate. For example, it would allow farmers to install more sensors to track more data points and help them run their operations more effectively.

One of the big questions is over the impact 5G will have on agricultural jobs. Unskilled labor could see the biggest impact, according to analysts.

Currently, there are 2.1 million agricultural workers in the U.S., according to ABI Research, with the average farm employing about 45 people. Those numbers will fall over time as farmers add more technology, according to Gergs.

“5G will change the nature of jobs in farming and agriculture substantially,” Gergs says.

By 2035, the number of agriculture jobs is expected to shrink to 1.78 million, Gergs says. At the same time, farms will employ an average of only 27 people.

But Morelli is unsure that more technology, including 5G, will actually impact the number of farm jobs overall. He acknowledged that different roles will be in higher demand, likely data analytics and farm management, but that doesn’t necessarily translate into a lower headcount.

“Smart agriculture in general is about allowing farmers to be more informed and efficient; it’s not specifically about eliminating jobs,” Morelli says. “There will likely be some transition, as with any technology transition.”

Whatever the case, the stakes are high. The United Nations Food and Agriculture Organization estimates that the planet will need 70% more food in 2050 than it did in 2009 because of a rising global population. Advancements in farming will be a big contributor.

“Technology must be applied to the problem,” says Forrest. “Connectivity is essential, and therefore 5G in agriculture is inevitable.”

More must-read stories from Fortune:

—New tech-centric Mastercard CEO has his eyes on the fintech prize
—Did the ‘techlash’ kill Alphabet’s city of the future?
—How technology is changing how we volunteer
—Credit Karma was acquired rather than pursuing an IPO. Will more companies follow suit in 2020?
—Half of U.S. local government offices haven’t upgraded their ransomware defenses since 2019’s online crime spree

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