What If I Had AI in 2020: Rent The Runway Dynamic Pricing Model

A data scientist reflects on a 2020 project at Rent the Runway that required building a dynamic pricing model during the pandemic to balance selling versus renting clothing. The original solution involved forecasting rental revenue and estimating price elasticity to determine optimal prices for secondhand items. The analysis explores how modern AI, particularly large language models (LLMs), could have enhanced the project by addressing sparse data challenges through transfer learning and shared embeddings. Additionally, LLMs could have been used to incorporate external fashion trend data, and a reinforcement learning agent could have been built for real-time, personalized pricing adjustments. The main conclusion is that current AI tools make it much faster and more feasible to test and implement complex solutions that were once too resource-intensive for many teams.