LE TOTE Brings Subscription Model To Dresses, Jewelry

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Purchasing new clothing can be an exciting venture for many shoppers, but it still involves risk, especially for expensive products. Consumers might find themselves having buyer’s remorse after purchasing an expensive item, such as a dress, if they only wear it once or dislike the appearance.

LE TOTE, a rental service for women’s apparel and fashion accessories, enables shoppers to add new items to their wardrobe with a subscription model that costs $49 per month. Shoppers can sign up for the e-Commerce site and receive items from more than 80 apparel brands including BCBG, French Connection and Splendid.

Each delivery includes a tote bag with three garments and two accessories that the customer can hold onto for as long as they want before deciding they want to return the items. Garments may include dresses, cardigans, jackets or pants, while accessories may consist of necklaces, earrings, scarves and handbags. Once the shopper returns the items, Le Tote will send a new batch including different products immediately. Shoppers can even purchase items that they like at a discounted rate of 20% to 50% off the average retail price.


“The whole idea is to give the customer that variety for everyday wear at a fraction of the costs of purchasing those items,” said Rakesh Tondon, CEO and Co-Founder of LE TOTE. “They can keep the box, for let’s say two days, then send it right back and we’ll send them another box that they can keep for two weeks. It’s all up to them and at their cadence.”

The retailer takes data-driven approach toward pleasing its consumer base through offering recommendations, according to Tondon. In fact, LE TOTE built its own recommendation tool, as well as a proprietary fit and styling algorithm to determine which items are most suitable for individual consumers.

“When women sign up, they can tell us a little about themselves, their style, and their sizing,” Tondon said in an interview with Retail TouchPoints. “They can add some items to their own virtual closet online and then we offer them recommendations based on the questions that they’ve answered. We also base recommendations on the comparisons to other similar shoppers that might have liked or disliked certain items.”

Upon receiving the items, shoppers can rate them by fit and style to inform the retailer of what type of clothing and accessories suit them best for future deliveries. So far, the experience appears to be paying dividends in terms of customer satisfaction, with the retailer experiencing a 94% customer retention rate month-over-month as of February 2015.

LE TOTE increased revenue growth by 600% in 2014, sending more than 60,000 items on average per month. After shipping approximately $15 million worth of inventory to consumers, the retailer anticipates it will ship as much as $75 million worth in 2015.

“I think it’s validation that people are really excited about what we’re doing,” said Brett Northart, President and Co-Founder of LE TOTE. “This whole idea of getting access to items versus owning them is really taking off. Largely, this generation of consumer is just looking to get the things that they want when they want them on not necessarily have to own them.”

In February 2015, the retailer announced it had raised $8.8 million in Series A funding led by Azure Capital, boosting their total venture funding to $12.5 million.

The retailer also recently introduced the Tote Swap feature, which enables LE TOTE shoppers to see a snapshot of the five pieces in their totes and decide if they want to keep the selected items or swap them out for different items ahead of delivery. Nearly 80% of customers have adopted Tote Swap, according to a company statement, indicating that personalization is an influential option for subscription services.

LE TOTE also is focusing on expanding its product portfolio for the future, with the buying and merchandising teams engaging in discussions with numerous brands, according to Northart. The additions of new potential partners would give present a wider selection of items to consumers, and furthermore, possibly promote the company to a wider consumer demographic.

“We’re realizing as we grow that people want different tiers of brands,” Northart stated in an interview with Retail TouchPoints. “We want to offer different aesthetics, and I think that has a lot to do with our existing segment. Right now, there’s a lot of different categories that we could expand this model into, since we’re building the infrastructure to rent out anything. Today, LE TOTE is largely focused on contemporary wear for 28-to-35 year old women, but as we grow there’s a huge opportunity to use this business model and apply it to other segments.”



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