How Rent the Runway is continuing to bounce back from Covid

You’ve heard of fashion mavens like Donatella Versace, Marc Jacobs, and Tom Ford. Might Nigel Xavier be next?

The designer was relatively unknown before he appeared on the second season of Netflix’s Next in Fashion, a competition series geared toward finding up-and-coming designers. Xavier’s upcycled denim looks won him the competition, not to mention $200,000 and thousands of Instagram followers. It also earned him another opportunity: The chance to create an exclusive collection with Rent the Runway.

The Xavier collaboration is one of the latest marketing moves by the subscription fashion service to assert itself in pop culture and build relevance after pandemic restrictions left many people without a need for designer clothing, leading tens of thousands of subscribers to cancel in March 2020.

Fast-forward to now, and a lot has changed: Earlier this month, the company reported having 141,205 active subscribers, its highest ever. In Q4, it brought in $75 million in revenue, up from $64 million the year prior.

The service, which went public in 2021, rolled out a remodeled subscription program last month, adding an extra item to subscribers’ monthly shipments. The change is being promoted through a campaign titled “Era of Extra,” which debuted last month.

“We wanted to start the year off with a bang, and we did by adding an extra item into every shipment for every single plan, so 25% more value for the same price,” Anushka Salinas, president and COO of Rent the Runway, told us. “We really are encouraging our subscribers to think about extra—trying something extra special that you might not have otherwise rented with this extra spot, trying a designer you wouldn’t have otherwise worn—and really sort of pushing the boundaries that you can only do with a subscription to fashion.”

To promote the “Era of Extra” campaign and the revamped subscription plans, Rent the Runway worked with more than 40 creators across TikTok and Instagram. “It was a really diverse set of creators—so it spans geographies, ages, different interests—and it was very much a real representation of our community. We asked them to really showcase the way they use the program in real life,” Salinas said.

It also offered a “month of extra” to its brand ambassadors, offering them things like higher referral incentives, gifts, and a styling event as part of the push. Salinas said the brand’s ambassador program is an “incredible channel for amplifying [its] referral strategy.” According to Salinas, between 2019 and 2022, more than 80% of its growth was “driven organically,” adding that “word-of-mouth has always been a really huge part of our business.”

The campaign also includes elements such as paid search, social, and email. Salinas declined to share the budget for the campaign.

Next month, the brand has a collection coming out with actress Ashley Park, known for her role in the Netflix series Emily in Paris and, more recently, the Netflix show, Beef. The brand collaborated with her over the holidays.

As for the future, Salinas said, should something as disruptive as Covid arise again, “We’ve done it before, so you know, I’ve got my playbook, should we need it. But let’s hope we don’t have any more global pandemics.”