Rent the Runway, Inc. (NASDAQ:RENT) Q3 2022 Earnings Call Transcript

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Andrew Boone: Thanks so much for fitting me in. Two, please. It sounds like next year will be more focused in terms of conversion. Jen, can you just talk about what you are most excited for, I think, fit was a key component earlier this year. You guys are adding ElasticSearch. What are you most excited for in terms of driving conversion on the platform as we think about 2023? And then, Scarlett, I think historically, we have talked about 4Q having COVID baked into the guide, is there any way to think about how you guys are thinking about COVID for 4Q and maybe quantify any impact as that may be lesser than what we previously thought? Thanks so much.

Jennifer Hyman: Yeah. So what I am personally most excited by is what we are going to be doing related to search and discovery. So it’s really hard to shop on any e-commerce site, because you have the endless aisle and that is true of Rent the Runway as well. We have millions of products on Rent the Runway and right now we offer a traditional search and filtering experience. What is going to be different next year and what we have built the foundation for this year is we have talked a lot about the fact that we have a really unique data set. Well, in the past, we were using this really unique data set across things like manufacturing our Exclusive Designs and we use our unique data to determine what we should buy in the first place.

But we have never really connected that data into the search and filter experience. And so you are going to see us really transform the site experience next year to provide way more delightful ways for customers to engage with our product, more intuitive ways to search and filter, more emotional and surprising ways. We feel like, because you don’t have to buy anything on our platform, we can own fashion a motion. Like you don’t have to have a rational reason for why you are going to wear something from Rent the Runway. That searching our sites could actually be more fun and more engaging. So we have built all of the foundation to be able to very quickly iterate on that. And that’s the second point I would say that part of the foundation that we built this year isn’t just kind of the connection of the pipe, but it’s also building out the resiliency of our platform so that we can continuously experiment and iterate, because though we have grand plans for certain discovery, we are probably going to run dozens and dozens of tests and so that’s an area where I am extremely excited.

I also am really excited to just increase the speed of our sites. Site speed is an area where I think we lag some of our competitors. We know that there is a direct correlation between site speed and conversion and because of all the infrastructure work we have done this year on technology, we are going to be able to make really nice advance insights feed next year, which we think will have a — we believe we will have a nice correlation to increase conversion.

Scarlett O’Sullivan: And Andrew, thank you for the question on Q4 and COVID impact. Obviously, last time I did say that we were assuming some impact from the COVID variant. I don’t specifically have something modeled this time in Q4 for COVID variant, obviously, we are still in an uncertain environment and frankly, at this point last year, we had no idea the impact that Omicron would have on events, on people going into offices. So that variance was very different than what we have seen before. So I feel that — I feel good about the guidance that we are putting out there and I kind of remind you of the seasonality in the macro environment, but I have not specifically modeled anything related to COVID into Q4.

Andrew Boone: Thank you so much.

Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Jennifer Hyman: Thanks for joining us today. We are really excited about not only our results this quarter, but our plans to accelerate our cost to profitability to deliver way more to our customers and the long runway that we have for growth ahead of us. So we look forward to continuing to update you on our progress on our Q call — on our Q4 2022 call and thanks again for joining us.

Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.

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