Jennifer Hyman: I just think that we have really exciting plans to accelerate our subscriber growth in 2023. In this market, the customer overall is looking for value, and of course, she comes to Rent the Runway because of the tremendous financial value that we provide. But she also thinks about value on our platform and in a few other ways. She thinks about how much fashion am I wearing from Rent the Runway. She thinks about how easy is it for me to find the fashion that I love. She thinks about how frictionless is the experience of receiving that fashion. And we plan to make significant improvements in all three of these areas next year that we think will provide tremendous value to the customer, where we reinvesting, what we said in last call is, part of why we did the restructuring in so that we can reinvest into customer value and you are going to see us do that in a big way in 2023 to the kind of hopeful improvement of our conversion and our loyalty rate.
And then, Scarlett, maybe you can talk
Scarlett O’Sullivan: Yeah. About at-home pickup last thing on Q4. I mentioned that on my call, but obviously, we typically do see seasonality in Q4 that you should be aware of. I think you were saying at the beginning of the call that you thought our sub count would be down year-over-year. So I would encourage you to take a look at that again. That should not be the case. And then in terms of a home pickup, maybe we will spend talking about that, okay. So a few things that I wanted to highlight there. So, yeah, we saw really nice fulfillment costs in this quarter. You see that it was at 30% versus 33% a year ago. A few contributors there, one of them being the revenue per order being quite strong. And then another, as I alluded on the call, we have done a really nice job continuing to work on transportation, diversifying our carriers, actually renegotiating some of our rates as well, which has been beneficial in this environment for us to be able to deliver on that.
But, of course, at-home pickup, as we have talked about all year is also a contributor. So we are now live in 32 markets. We feel that we have delivered something that is resonating with the customers, 55% of our subscribers have access now that’s ahead of our target. We thought we would be there at the end of the year and we continue to plan to increase that coverage. For me, the most important determinant of how she’s feeling about it is the fact that the adoption has grown significantly. So in the codes that we offer this, we are seeing the adoption go from 29% to 39% during Q3. This really is what we think highlights the customer values, the service and trying the convenience use. And of course, we have said along the way, it’s also great for us from a cost standpoint.
So the economics of that home pickup for us are as good, if not better, than our other return methods in those markets where we offer this convenience to our customers and it’s just because as we talked about, it’s all consolidation play. So we are excited about the fact that we are doing a lot more at-home pickup. We have seen the percentage of total inbound shipments be at-home pickup has more than doubled from Q1 to Q3 of this year. So you can see it is a really meaningful contributor. We are going to continue to do more. Maybe, Jen, do you want to talk a little bit about life swap and some of the things we are doing there, which I don’t think we have talked about.
Jennifer Hyman: Yeah. So part of how this company operates is we launch something and then we continue to iterate it and make it better. So a perfect example of this is a home pickup. We were seeing a really nice adoption of at-home pickup in the markets that we are in. Again, like a launch having 39% adoption a short time after it’s launched is remarkable. So what we did is we innovated on this and we now offer something that we call internally live swap. And what that means is that, customers can return their order at the exact same time that they are receiving their next order. So it reduces what used to be two transportation legs into 1. So we used to have someone come to the home to pick up the order from the customer that at-home pickup and then a separate courier or delivery service has come to deliver that order.
We have consolidated this down to one pickup, which, of course, saves Rent the Runway money, but it’s also great for the customer, because it reduces the friction from the experience and we are seeing that for the — we are seeing that 30% of our at-home pickups are live swap now.
Scarlett O’Sullivan: And, of course, it’s great for the environment as well.
Unidentified Analyst: Thanks very much.
Jennifer Hyman: So we continue into next year. We are going to continue to build upon the success that we have seen this year in this transportation innovation.
Operator: Our next question is from Ashley Helgans with Jefferies. Please proceed.
Ashley Helgans: Hi. Thanks for taking my questions. Just a quick one for us. You mentioned customers are trading down to lower subscription tiers. We were wondering if you are seeing any trade down to lower-priced items or lower price rentals within the reserve business. Thanks.
Scarlett O’Sullivan: Ashley, we are not seeing that kind of trade down in the other businesses. Maybe just in terms of the mix shift, I just want to maybe spend a moment on that. We are excited about the fact that we have many offerings for our customers, many different ways for her to come in. What’s most important for us is that she comes in and we have seen the behavior when she comes in. We have seen, as you have already seen, what we have talked about in terms of add-on thought the fact that she may move up. So the most important thing for us is for her to come in to Rent the Runway and then it’s our job to then serve her and remind her of all the things that she can do. So we are excited about in this environment, the fact that we have an offering that is resonating with customers that we have seen different types of customers coming in.
Jennifer Hyman: It’s exactly what we would expect in this environment. So because we have a lower price program that enlarges the TAM for us, we have an acquisition funnel now where she can come in to reserve and then join a subscription program. She can come into lower price and then upgrade over time. And we have really factored this kind of mix shift that we would expect in this kind of macro environment into our guidance. And as a reminder, all of our subscription programs have similar margin profile. So we are kind of agnostic into where they come into our business and it’s our job to kind of just keep them within the business. And we have seen and shared that we have done a better job at — we have seen higher loyalty from our customers now.
We have done a better job in 2022 than we saw before the pandemic, and that was, of course, in 2019, we are talking about an environment where the macro was extremely positive. So the fact that loyalty is better than what we were seeing in that, I think, is really a testament to the value that we have been able to deliver to the customers.
Ashley Helgans: Great. Thanks so much.
Operator: Our final question is from Andrew Boone with JMP Securities. Please proceed.
