The Fashion Rental Service Has Spent the Last Four Years Improving Its Business Operations. Now It's Ready to Win Back Customers. After having to drastically adjust its business model since the pandemic, Rent the Runway is now planning to make a splash once again. On Wednesday, the fashion rental service appointed Natalie McGrath as Chief Marketing Officer, thereby creating a dedicated leadership position in marketing for the first time in years.

The former Vice President of Marketing at the payment company Afterpay has the task of increasing the company's customer numbers and restoring the brand to the cultural relevance it enjoyed before the pandemic. Layoffs in January have put the company in a position to invest more in marketing starting in 2024, according to Jennifer Hyman, the CEO and co-founder of the company. "This is primarily aimed at focusing on growth, which we have not done in the last few years," said Hyman.

Rent the Runway offers a wide range of designer outfits for work, vacation, parties, weddings, and other occasions that women can rent as part of a monthly subscription. However, the arrival of Covid-19 in 2020 led many customers to work from home, postpone vacations, cancel parties, and hold weddings remotely. As a result, they massively canceled or paused their Rent the Runway memberships – about 50% of the 100,000 subscribers within a few days, Hyman reported in an interview with The Wall Street Journal in 2022.

Rent the Runway Closed Its Five Physical Stores and Never Reopened Them. Maureen Sullivan, Who Was in Charge of Marketing, Left the Company. The Company Halted Most Marketing Activities and Also Did Not Participate in Live Events, Even Though They Were Taking Place Again. At the Same Time, About Half of the Staff Were Laid Off or Sent on Mandatory Leave, and New Contracts with the Designers Who Supply the Inventory Were Renegotiated. "There Was No Way to Generate Demand for Rent the Runway in the First One to Two Years of Covid," Said Hyman.

"At the same time, we had to focus on massive cost savings as sales dropped dramatically during this period." The company proceeded with its IPO in October 2021, however, it reduced its workforce by a further 24% less than a year later as the number of customers continued to decline. The layoffs in January, which aimed to release more capital to invest in the growth strategy and affected about 10% of the company's positions, followed a drop in new customer retention as subscribers, who were once growing, found that the company did not have enough popular styles in stock. According to Hyman, the inventory has now been replenished, though.

"The Company Has Also Invested in Customer Experience and Back-End Technology, Changing its Shopping Approach to Improve Margins," She Added. The Plan to Win Back New Customers Comes at a Time When Consumers Are Familiar with the Offering, Representing a Shift from the Early Years When It Was a Novel Idea Backed by Venture Capital. According to Data Analytics Firm GlobalData, the Size of the Global Apparel Rental Market Has More Than Doubled to $6.2 Billion Between 2016 and 2023.

"Rent the Runway will no longer have to expend as much energy explaining what clothing rental actually is," said Hyman. "This is the state we've always wanted to reach, where we don't have to promote the service, but actually the product," she said. However, a more mature market also means more competition. When Rent the Runway last did widespread marketing, there were only a few clothing rental providers on the market.

By now, there are numerous start-ups as well as offerings from established retailers such as Urban Outfitters' Nuuly, which recorded nearly 200,000 active subscribers last November. In comparison, Rent the Runway had 131,725 active subscribers in December. The new CMO McGrath, who previously worked in marketing for retailers like Boohoo Group, Coach, and Alexander Wang, says she wants to build a marketing team that can quickly respond to cultural trends and the fluctuating behavior of customers.

The Brand Plans to Participate Again in Live Events and Experiences, Advertise in Various Publications and Platforms, and Increase Spend on Public Relations, Influencer Marketing, and Ambassador Programs - Practices that Contributed to the Company's Success in the Years Preceding the Pandemic, According to Hyman. "It's About Getting Involved in Everything That Interests the Customer, Whether She Is Traveling to Europe This Summer, Going Skiing, or Planning a Lovely Thanksgiving Dinner," McGrath Said.

The company also plans to reach out to customers who have stopped renting due to home office or due to a bad experience with the company, according to Hyman. "If you were already a customer before Covid or even last year when we had some of our inventory issues... you would not have the right impression of what we can offer," she said.