Michael Binetti: I guess maybe I can follow up one on marketing, could you speak to a little bit to the marketing mix, any changes you are seeing in the different channels or change in the returns you are seeing in generating the different channels? And maybe any — just any update on trends in what you are seeing in organic versus inorganic trends on the marketing side as we think had to help us for next year?
Jennifer Hyman: Yeah. So, in terms of marketing, like, no real news, our pack is stable and attractive in 2022. It’s stable to last year. We believe that the traffic that we have on this runway, we are happy with the level of traffic that we have and our focus is not on using marketing dollars to drive more traffic, all of our focus is on doing a better job with the traffic that we have in terms of our conversion and our loyalty. So you are going to see us focus inherently on the customer experience and customer value. You are not going to see marketing costs go up that were us focusing on traffic, because we believe that the level of traffic we have right now is in a good spot.
Scarlett O’Sullivan: And Michael, just to add to that, there’s really not been much change in terms of the channels that we use and the way that we do marketing. So that’s to stay pretty consistent. Obviously, it’s helpful when you do celebrity deal, but we also have the amplification of celebrities and them being out there talking about us, but nothing in terms of our own internal efforts on the channel.
Jennifer Hyman: I think that there’s general tailwinds this year that we are seeing across culture and across the media related to rental overall. I mean an example from this week alone, we saw that Princess Kate rented a dress last week. If you would have told anyone 13 years ago when we launched Rent the Runway and people thought renting was discussing and not cheap and not something that anyone would talk about that Princess Kate that royalty would be renting and talking about it publicly, that’s really due to us starting this movement globally, making rental something that’s normalized aspirational. And we are seeing that more and more in culture where the tailwinds, I think, of this becoming part of the consideration set is, are really improving. And we see that across the Board every day in the diversification of our customer base and her considering us for more of the use cases in their life.
Michael Binetti: Okay. Thanks a lot. Appreciate the help.
Operator: Our next question is from Eric Sheridan with Goldman Sachs. Please proceed.
Eric Sheridan: Thanks so much. Maybe two questions, if I can. First, in terms of what you are seeing on the gross addition side, is there any color you are able to give us on how much of that is people that are finding the brand for the first time and being driven by elements of either aided or unaided awareness from the platform driving gross additions versus your ability to go out and mine the database of former users, former subscribers continuing to remarket and we mine that base of potential former users to drive incremental growth — addition growth? That would be number one. And then number two, you have started to see the beginning of sort of a return-to-work dynamic that’s lagged sort of the reopening dynamic? How should we be thinking about what you are seeing from your subscribers in terms of return to work and how that might be a tailwind for the business in 2023? Thanks so much.
Jennifer Hyman: Yeah. So starting with the second question first. We are really pleased with the performance of workwear, which has doubled for us year-over-year in 2022. So we are seeing that women are more solidly in the office a few days a week and this performance is in a world of hybrid work. We have also done a great job at shifting our inventory mix to reflect what our customers want. So it’s our job to highlight all of the use cases to customers that she’s able to use her subscription for and we have done a great job at that, given that workwear is double last year, but at the same time, she’s using 55% of her basket for everyday casual occasions. We are seeing that even in 2019, if you think about a world where she was in the office five days of me, she was using the subscription at the time only around quarter of the time to go to work.
Now in that world, where you are going into the office five days a week, making an investment into workwear makes a lot more sense than a world where you don’t know how much you are going to be in the office this month, next month. So we have a big opportunity to use the hybrid environment that we are in as a lever for acquisition. In terms of the first question of where the customer is coming from, are they new, are they from our database, we have actually seen strength across the Board. So we are seeing, in Q3 we saw a nice rejoin rate of folks who had previously churned who came back. We saw a good amount of new customers coming to Rent the Runway. We saw a really nice increase to our pause, people unpausing their subscriptions. So it was really a combination of acquisitions from all three of these sources.
Eric Sheridan: Great. Thanks so much.
Operator: Our next question is from Rick Patel with Raymond James. Please proceed.
Rick Patel: Thank you. Good afternoon. Can you talk about opportunities to lower product costs outside of the ongoing change in the product acquisition model. I am curious if you see opportunity to realize better cost, because of elevated inventories across the apparel industry, and perhaps, some brains trying to right-size a product that they might be sitting on?
Jennifer Hyman: Yeah. As we just talked about we certainly think that this environment is right for us to be lowering our upfront product costs by working very closely with the 800 brands that we work with to acquire the very best inventory from the deeply discounted rates. We are seeing higher desire amongst our brands to work with us both on our consignment business Share by RTR and Exclusive Designs. And as you have seen mix shift towards Exclusive Designs and Share by RTR has been a major lever in helping us reduce the upfront cost of inventory. I will remind everyone again that our gross margin of 41% is inclusive of all of our fulfillment expenses and our inventory expenses and that 41% gross margin is significantly or slightly better than many of our retail peers already. So the reduction in our inventory cost that we expect over the next few years will only help to improve a gross margin that we already think is quite positive.
Scarlett O’Sullivan: Yeah. And Rick, I would just add, what Jen was talking on the first part of the answer to the question, it’s not hypothetical, right? We are in fact pulling forward some of the spend from next year. We are in market right now, getting some attractive deals. So we are excited about what that does for our numbers.
Rick Patel: And you talked about the progress of Exclusive Designs and the product being sought after by retailers. Can you provide some additional color on what you are doing to capture this demand and to what extent this can be a needle mover as we think about 2023.
Jennifer Hyman: Right now it’s just a pilot and we are excited by that pilot. We think that it’s really interesting that another multi-brand retailer finds our Exclusive Designs to be so attractive that it’s something that they would buy from us wholesale. One of the things that I think it showcases about our business is that because of the data that we get, which is incredibly unique. Remember like, our data isn’t just about what customers are doing on our site. Our data is about how they actually wear the item. It’s about fit. It’s about product quality. It’s about manufacturing. How light it should be manufactured. And we have seen that when we use data to manufacture products, they become — that sellers, best renders on our platform.
