As brands reckon with the reemergence of brick-and-mortar as a key priority for consumers, Rent the Runway said an eCommerce-only approach will no longer cut it in the fashion world.
The clothing subscription service asserted on a call with analysts Thursday (June 6) discussing its first-quarter fiscal 2024 earnings results that this in-person access is essential for growth.
“Our focus has been on reigniting our in-real-life presence,” Rent the Runway CEO Jennifer Hyman said during the call. “We believe that in-real-life experiences, stores and pop-ups must be a big part of our brand moving forward to grow. I do not believe that a brand in the fashion space can grow on digital alone.”
Most fashion shoppers buy online. The PYMNTS Intelligence study “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces” found that of those who had bought clothing or accessories in the previous month, 62% did so in physical stores. Plus, the report, which was based on an October survey of over 3,500 U.S. consumers, revealed that 42% of clothing shoppers had used a digital marketplace, about 1 in 4 made such purchases via a retailer’s website or app, and 20% did so through a brand’s site or app.
Consumers who subscribe to digital programs such as Rent the Runway do spend less time shopping in stores. The PYMNTS Intelligence study “The Replenish Economy: A Household Supply Deep Dive” found that 42% of retail subscribers said they shop in person less frequently or have stopped completely because of their subscriptions.
Rent the Runway saw slight year-over-year upticks in revenue and active subscribers as gross profit dropped roughly 10%.
In-person events have helped the brand reach new customers, suggesting the potential to drive future acquisition.
“When we have an event, of which we’ve had two over the past six weeks, thousands of people show up, and those thousands of people aren’t just current customers,” Hyman said during the call. “Eighty percent of the people that showed up [to our New York event in April] were not current customers. They are just people that love the brand, that are interested in the brand, that want to engage.”
Shoppers want to engage in the real world. The PYMNTS Intelligence study “2024 Global Digital Shopping Index: U.S. Edition,” conducted in collaboration with Visa Acceptance Solutions, revealed that roughly three-quarters of consumers prefer to interact with the physical store at some point in the purchasing journey. Specifically, the study’s survey of more than 2,400 U.S. consumers found that 44% like to make purchases in stores without digital assistance, 19% like to shop in stores with digital assistance, and 11% like to complete transactions online for in-store pickup.
Still, digital plays an important role in the company’s strategy, with Rent the Runway leveraging consumers’ use of social media to find fashion inspiration. PYMNTS Intelligence research found that 68% of Generation Z consumers search for products on social media, as do 64% of millennials.
Hyman noted that for the summer, the brand is using a “social-first” approach with “creator-led” content involving nearly 100 social media fashion influencers.
“Our influencer takeover is targeted to specific geos and sociographics over a concentrated period of time, so that we can have more of a swarm effect for a more focused group of prospects,” she said during the call.
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