Rent the Runway Lures Subscribers With Free Items — Retail Bum

Rent the Runway is giving subscribers additional items with their shipment at no extra cost to attract cost-conscious consumers who are gravitating toward bargains.

The new offering is indicative of the platform’s newly found financial flexibility that has come as a result of recent structuring efforts.

“This business grows by women organically telling other women about Rent the Runway,” said CEO Jennifer Hyman. “We get a lot more bang for our buck investing into the customer experience than investing into marketing.”

According to Bloomberg, the company had initially considered cutting its subscription fee but later decided to create more value for its customers at the same price. Hyman believes the approach creates a higher chance of word-of-mouth marketing, retention and increased appeal.

“This business grows by women organically telling other women about Rent the Runway,” Hyman said. “We get a lot more bang for our buck investing into the customer experience than investing into marketing.”

The new offering is being supported by previous cost-saving efforts. In 2022, the company let go of 25% of its non-hourly employees, which generated $25 million to $27 million in savings. The company also restructured its debt, which pushed the maturity date from October 24, 2022, to October 26, 2022, and reduced the cash interest payment to 2%, down from 7%.

Originally published at https://retailbum.com on March 7, 2023.