Rent the Runway Charts New Course With In-Person Events, Revamped Consumer Experience

Rent the Runway (RTR) is experiencing a pivotal moment as it redefines its growth trajectory through a blend of strategic innovations and operational improvements. Following its second-quarter earnings call Thursday (Sept. 5), the company, known for introducing Closet in the Cloud, is setting its sights on further expansion.

“What you’re seeing in our results is momentum,” CEO Jennifer Hyman said during the call.

Second-quarter revenue increased 4.2%, to 78.9 million, up from $75.7 million for the same period last year. Hyman pointed to an enhanced customer experience, improved site performance and “palpable energy driving RTR” through its Reserve business.

“The most momentum is in our special event reserve business,” Hyman said.

Orders for this segment rose 10% in July and 20% in August, reflecting the effectiveness of recent improvements in customer experience and inventory management. Hyman noted new customer growth surged 50% year over year without any additional marketing expenditures, underscoring the impact of enhanced end-to-end customer experiences and optimized inventory.

The company’s ability to increase customer reengagement and loyalty has been pivotal in this upward trend.

“We are very optimistic in Reserve growth for the second half,” she said. “The teams are focused on our end-to-end experience for Reserve. Until June, there was no dedicated focus team on Reserve and we had seen that business decline the past few years. Now we’re having this be a tremendous new funnel of new customers into RTR.”

Active subscribers fell 6%, from 137,566 to 129,073. Chief Financial Officer Sid Thacker, attributed the decline to a reduction in promotions.

RTR is leveraging a variety of strategies to fuel its growth, focusing on SEO improvements to drive organic traffic and enhance customer engagement.

“Our improved site experience, combined with enhanced merchandising, is designed to set us up for success in the second half of the year,” Hyman said. This effort includes a revamped approach to marketing and content, with a particular emphasis on timely and engaging campaigns. Monthly icon campaigns celebrating fashionable women and a renewed college ambassador program are central to this initiative.

A significant part of RTR’s strategy involves reenergizing its in-person presence. Looking ahead, RTR is expanding its efforts with a Southeast roadshow and mobile tour this fall, targeting universities with strong Greek life and sports culture. This tour aims to capture the Generation Z audience and further boost market share.

“In real-life events, we’ve seen hundreds of women standing around the block to get into events,” Hyman said. “Reigniting everything around marketing will not only drive higher org traffic, but higher customer engagement.”

Hyman noted RTR’s three priorities: expanding its Reserve business, increasing organic traffic and deepening customer relationships. Improvements in customer experience have helped attract former customers.

“Over the past three years, we’ve been heavily focused on cost and profitability,” Hyman said. “And now, we repositioned the entire accompany around growth. These actions give me the confidence that growth is coming for RTR. We have momentum across all different aspects of our business.”

Hyman believes RTR’s growth stems from its product-market fit.

“One of our key goals is increasing organic traffic,” she said. “SEO is a component of it and the other component is making customers fall in love with you. Brand awareness and brand love for RTR is very high. I’m really excited about the second half.”