California Apparel News

San Francisco startup Le Tote believes it can pack the best of e-commerce trends into one bag.

Le Tote is riding the wave that has spawned other rental e-commerce rental sites such as Rent the Runway and Bag Borrow & Steal. But the San Francisco e-retailer has carved out a unique niche for itself.

Instead of renting gowns, such as Rent the Runway, or handbags, such as Bag Barrow & Steal, Le Tote rents sacks full of women’s fashions from popular brands such as BCBG and French Connection and loans them to Le Tote customers for $49 a month, said Brett Northart, the e-commerce site’s president. He and Rakesh Tondon founded Le Tote in October 2012 as an invitation-only site and opened it up to the general public in mid-2013.

The San Francisco e-commerce site believes that it can also act as a personal stylist for its members. Le Tote gathers a vast vault of information on its members’ fashion preferences through its algorithm, which has been nicknamed Chloe.

Recently graduated from beta testing, Chloe not only suggests what clothes a specific member would rent but can tell with accuracy what looks would be most flattering on a Le Tote member. Each tote contains three items and two accessories that can be kept for as long as a customer wants. There are no shipping or return fees.

“It’s an evolution for the business,” Northart said. “When it started, it revolved around a personal-stylist experience. Individuals thought through what would be best pieces for you. As it grew and collected more data, it built up substantial profiles on their tastes, their fit profiles, how the fit makes them feel.”

Based on a member’s rental history, Chloe can suggest garments and styles based on what the member actually ordered, rather than what she put on her profile.

For example, if she posted on her profile that she prefers low-cut tops but her rental history finds she mostly rents crew-neck tops, the algorithm will suggest that she stick with looks from her rental history.

Of course, the customer is always right, Northart said. Le Tote will always send the items that have been requested. Yet in each bag sent out, Le Tote will add a “mystery piece,” or a garment that Chloe believes a specific customer would love.

“We want to provide you pieces that you would like. Sometimes it is what you ordered, sometimes it pushes your boundaries a bit,” Northart said.

Chloe’s accuracy is shaped by its thorough follow-up questions, Northart said. After a member returns a bag of clothes, Chloe asks a lot of questions on where a garment fit—or did not fit—and what else the member loved or hated about the piece. The algorithm’s success depends on collaboration with the site’s members, and more than 75 percent of Le Tote’s members reply to the algorithm’s follow-up questions, Northart said. Le Tote also employs a handful of human stylists, but Chloe has been taking a higher profile on the site, he said.

Some of the site’s success will depend on what consumers want to share, said Kelsi Smith, a Le Tote member and a digital-marketing expert and chief executive of Stylesmith, a Los Angeles–headquartered media and marketing agency. She also is the director and founder of Los Angeles Fashion Council, which produces Los Angeles Fashion Week events.

The clothing-rental model succeeds with Rent the Runway. “It makes sense to rent gowns,” she said. “It gives you the opportunity to rent something that you wouldn’t be able to buy,” Smith said.

For Smith, the jury is still out on whether women would want to rent contemporary clothes, especially for those who live in driving distance of a mall with a lot of contemporary stores.

Northart said that Le Tote is quickly being embraced by its core demographic, women in their 20s and 30s. His site’s revenue and subscriber base has increased 30 percent to 40 percent each month, he said. But he declined to further quantify his site’s growth.

Growth is just beginning for Le Tote because Northart contends that consumption habits have changed. Today’s consumers, especially people in their 20s and 30s, prefer to rent a house and a car. “The recession skewed a lot of people’s perceptions of owning,” Northart said. “[Le Tote] is a great way to supplement a wardrobe and not be committed to owning it forever.”

For Kristina Skinner, a Le Tote member who also does public relations for a San Francisco startup company called Inkling, renting clothes is a great way to fill out a wardrobe.

“I love having new clothes but get very bored very quickly with a lot of the items I own,” Skinner said. “ Le Tote lets me constantly infuse my wardrobe with fresh items without breaking the bank, and I also love that I get to take some fashion risks and style clothing I might not necessary ever pick out for myself in a store. Also, I couldn’t even buy an outfit I love for $49 a month, but with Le Tote I get to wear about 10 to 15 outfits I love every month. It makes justifying the monthly subscription fee pretty easy when you think about it like that. I really enjoy the clothing rental concept. I also use Rent the Runway for formal wear.”