As consumers demand more frictionless experiences from their eCommerce merchants, Rent the Runway is seeing its digital rethink drive higher retention.
The company shared in a presentation Wednesday (April 10), alongside its fourth quarter and full year fiscal 2023 financial results, that it saw loyalty rise 10% year over year following improvements to the user experience on its digital platforms.
“[We] will be … continuing the digital product innovation we started in 2023 to drive increases in conversion and loyalty,” Rent the Runway CEO Jennifer Hyman told analysts on a call.
“In 2023, we made major strides on site performance and speed across all of our services, and we made it easier for users to find the inventory they love with the enhanced discovery features like rental look, AI search, new filtering and upgraded photography and styling.”
Indeed, the web experience can be key to shopper loyalty, data shows. The PYMNTS Intelligence study “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” created in collaboration with Adobe and drawing from a survey of more than 3,500 U.S. consumers, finds that 40% of shoppers consider how easy a merchant’s online store is to navigate when deciding where to shop.
Looking ahead, the company aims to upgrade its merchandising on its digital platforms, to “streamline product UX and design” to remove friction along the path to purchase and to improve educational content such as styling tips and the customer reviews. The goal of these content enhancements is to foster greater confidence, driving conversion.
The company is already seeing positive results from its recent efforts to shift to “use-case-based shopping hubs” showing how to dress for certain occasions and how to fit into fashion trends.
“The insight is this: People don’t come to our site to buy a subscription to fashion. They come to Rent the Runway because they need solutions,” Hyman said, adding that consumers want to be presented with answers to “emotional problems” such as how they should dress for certain occasions and how they can showcase their personality through their clothing choices.
With this shift towards tailored shopping experiences and a commitment to addressing customers’ emotional needs, the company appears to be poised to further grow its retention rates.
Overall, clothing subscribers tend to be disproportionately loyal, as show findings from “The Replenish Economy: A Household Supply Deep Dive,” a November 2023 PYMNTS Intelligence study conducted in collaboration with sticky.io. The report, which drew from a survey of more than 2,000 U.S. consumers, revealed that clothing and accessories merchants have a 68% customer retention rate.
In fact, digital innovation appears to be a key contributor to this industry-outperforming retention. The study found that 91% of these merchants provide free shipping, and 86% offer the ability to pause or skip deliveries — the highest among the nine industries studied.
Additionally, apparel companies have the advantage of appealing to consumers’ desire to treat themselves. “The Nonessential Spending Deep Dive Edition” of the PYMNTS Intelligence series “New Reality Check: The Paycheck-to-Paycheck Report,” created in collaboration with LendingClub, found that, among the 70% of retail shoppers who buy “nice-to-have” items at least sometimes, a plurality spring for clothing that they want.
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