Alexandra Steiger: Two questions, if I can. So first on marketing you mentioned that you wanted to incrementally invest into marketing going forward post a few quarters of marketing spending being down. So how should we think about the cadence of marketing investments through the year and the potential impact as we think about customer growth versus driving retention among your existing customers. And then somewhat related with Natalie, having joined us the new CMO how should we think about kind of like the areas like she will be most focused on and going forward?
Jennifer Hyman: So retention at Rent the Runway is focused and retention is driven by our experience. We shared last year that retention drops in the first half of the year because of problems that we had with inventory depth we went in. We fix that problem very quickly. We saw that not only did retention rebound, but it improved significantly year over year, 10%. When you look at Q4 versus Q4, that’s not just related to inventory depth. It’s related to lots of improvements that we’ve made to the totality of the customer experience. Of course, there are other things that we’re driving within marketing to drive additional retention across all of our customer segments. And that’s really a 360 degree lifecycle segment strategy that the marketing team is developing, where we’re focusing on our customer segments and coming up with different both communication plans and strategies to service those customer segments differently.
The other elements of the marketing plan that we are focused on and what Natalie is going to be focused on is not only lifecycle but increasing traffic, so opening up the funnel of new customers who are considering us. So you’ll see us interact with lean more diverse set of marketing channels to drive more traffic to the site. Number one. Number two is reigniting the brand marketing. So our business has grown and continues to actually be very strong as it relates to the organic traffic coming to the site, people come to Rent the Runway directly and investing in our brand activities in authentic ways, rebuilding our relationships with customers so that that customer virality, you know, continues to be a huge source of our acquisition. That’s where you’ll see us focusing now.
So much of the underpinning of this is content and the new creative strategy, a content strategy at this point, fuels organic growth in your lifecycle strategies, it infuses acquisition because the content strategy informs the efficacy of paid advertising so you’ll see us innovate our creative strategy and our content strategy, which will actually help all channels.
Siddharth Thacker: And I would say on the timing of marketing expenditures, I would use fiscal ’23 and the timing of the quarterly timing of expenditures as a result of the good die or what we might expect in fiscal ’24. As you know, our Q1 and Q3 tend to be heavy subscriber acquisition months quarters for us, and that’s when we typically deploy a lot of the marketing expenditure that we have. But fiscal ’23 is a good guide for timing.
Alexandra Steiger: Got it. Very helpful. Thank you. And then one follow-up, if I can that you didn’t mention the broader consumer environment and some macro volatility in your prepared remarks versus obviously some e-commerce companies and also brands calling out, you know, continued consumer weakness or spending weakness. So just wondering, Mike, what you’re seeing across your customer base since the beginning of the year?
Jennifer Hyman: We’re not seeing any macro impacts on the business. We feel strong momentum and feel very good about the guidance that we provided to grow this year.
Alexandra Steiger: Thank you.
Siddharth Thacker: Thinking coming back, we’re seeing in many ways the opposite in the sense that our customer loyalty is up. Customers are willing to buy more items from us. You know, the retail business is growing significantly So we have not —
Jennifer Hyman: our Net Promoter Score is up 20 points. I mean people are having a better experience that drives an increasingly high customer flywheel for us and higher customer virality. So we’re not seeing negative impacts to the macro at all.
Siddharth Thacker: And I would say that this goes back to some of the things we’ve talked about in the past, which is we do offer both brands and customers significantly more value at a time when they might be price conscious or we’re not, but no signs in our business, right now.
Jennifer Hyman: I think it also brings up a very important point that we made last year, but it’s worth repeating that we had a relatively flat year last year from a revenue standpoint. The reason for that was our own it was that we came into the year with lower inventory depth and we needed. We recognize that that was a problem we solved that problem. We exited the year in a great position related to our inventory. We see that in all of our metrics. So the flatness of our year was self-inflicted but we now actually have spent 2023 and dramatically not only improving the inventory position, but improving so many other aspects of the customer experience that really set us up for a strong 2024.
Operator: Our next question comes from the line of Ashley Helgans with Jefferies. Please proceed with your question.
Unidentified Analyst: Hi, it’s Blake. Thanks for taking our question and nice job on all the progress. I wanted to first ask on subscriber growth. I believe you mentioned you are going to widen the funnel of potential customers was just wondering if you could elaborate on that on. Has there been any update in your target customer you could talk about given some of the high end luxury editions and the pullback in promos, like how would you if we look back over the last year three-plus years, how would you talk about your TAM and target customer now versus maybe a few years ago?
