Dive Brief:
- Rent the Runway streamlined its website experience as part of its strategy to return to profitability, CEO and co-founder Jennifer Hyman said during a Q2 2024 earnings call Thursday. The primary focus is on UX improvements that make it easier for new customers to transact.
- The website’s grids — that is, code that ensures images and text appear in the right place no matter how a page is viewed — now load nearly 10 times faster than they did at the start of the year. This has reduced bounce rates by about 30%, according to Hyman.
- The number of new customers using Rent the Runway’s rental service grew 50% year over year in August, according to Hyman. She credited the growth to “a deep focus on improving the end-to-end customer experience and ensuring that we optimize inventory availability for our customers.”
Dive Insight:
Rent the Runway is boosting the online customer experience for its clothing rental business on its path to positive cashflow, and its efforts are paying off.
Second-quarter revenue was up 4.2% year over year to $78.9 million, putting it above the company’s top end guidance, according to a company earnings release. The company is committed to breaking even by the end of 2024.
Reinvigorating Rent the Runway’s rental service, which has been on the decline in recent quarters, is a key part of this effort. Reserve orders were up 10% year-over-year in July, and up 20% year over year in August, according to Hyman.
Customer experience will go hand-in-hand with marketing to turn the influx of new shoppers into long-term growth, Hyman said. Rent the Runway has taken steps to improve its ability to turn newcomers into longtime customers as well.
“Historically, new customer growth into reserve was a healthy source of repeat orders and upsells into subscriptions,” Hyman said. “We plan to use our reinvigorated lifecycle marketing function to reignite this flywheel.”
Other UX changes include a simplified checkout process and improved product detail pages, which led to improved add-to-cart rates, according to Hyman.
The company also improved its photo review process, which has increased the number of reviews Rent the Runway receives for each product.
“Our customer reviews are a critical tool in helping new customers determine whether an item will fit them and increase[s] comfort with sizing, which again drives conversion,” Hyman said.
While Rent the Runway is putting an emphasis on new customers, the UX changes and marketing efforts are bringing lapsed customers back as well.
“We've always seen that as we make improvements in customer experience, the first people to notice are people who are actively engaged on our marketing kind of comms list, people who have been customers before,” Hyman said.
