So our strategy is to continue to push on depth, to continue to buy a selection that resonates more with who our core customer is, who is this more aspirational woman in her 30s and 40s, who is professional, who is educated and we see that it’s not just about the depth, it’s the fact that the selection is resonating more than before. Hearts are up 30%. She’s buying more inventory. She’s adding more inventory into her cart, which is obviously increasing our ARPUs again and our margins. So we feel really good about the continuation of this strategy leading to even higher rates of loyalty. But even more so, we feel that the business is poised to really step on the gas pedal as it relates to marketing and growth and acquisition, that this is a customer experience based on improved Net Promoter Scores that are some of the highest Net Promoter Scores we’ve seen since pre-COVID that we feel excited about bringing new customers into.
Sid Thacker: What was your second question?
Eric Sheridan: Just generally over the next six quarters, how you think about the priorities to reinvest the savings from the capital structure changes, how to think about the priorities there?
Sid Thacker: I would say we’re very clear about our priorities for fiscal 2024. And the priorities for fiscal 2024 are number one, to ensure that we bring this business to pre cash flow break-even. That is a non-negotiable, really important initiative for us next year. So that’s the first thing. The second thing I would say is that, if you actually look at fiscal 2023, we have done — given the results and so on, some of these things perhaps aren’t, they get lost sometimes, but we have done a huge amount to invest in the customer experience this year, all the way from rolling out a program that is tailor-made for individual subscribers, styling, one-on-one interaction. These are things we never had before, but now are available to everyone who joins the program.
We have invested $70-plus million in inventory capital this year. Our — now our customers have access to, amongst the newest inventory they’ve had in a long time, the freshest inventory, inventory they love and at high in-stock rates. So I think if you think about our mindset and think about investment in the customer, yes, it’s true that the modifications and the debt will free up some resources, but really we have never stopped investing in the customer experience and I think that is going to continue. Where we will see additional focus next year, in addition to obviously getting the cost structure right and making sure we break-even on a pre cash flow basis, is on the growth side, really turning our attention to making sure more people and more customers experience this program and we drive excitement amongst the potential customers that have yet to try Rent the Runway.
Jennifer Hyman: I think the strength of our brand relationships as well is helping us to deliver incrementally more value to the customer month-over-month. I mean, one example of that is the launch that we did today of Luxury Evening Wear on our platform, which not only is the first launch of Luxury Evening Wear for us, but it’s the first time that many of these brands have ever participated in rental before. We’re starting to rent gowns and dresses on our site that retail for up to $8,000 MSRPs at rental price points that are quite accessible and affordable and so this is really continuing to offer our customers even more and doing it oftentimes on a pay for performance model with the vendors that we’re working with so that everyone really got it.
Eric Sheridan: Thanks for the detail.
Operator: Thank you. Our next question comes from the line of Ike Boruchow with Wells Fargo. Please proceed with your question.
Juliana Duque: Hi, everyone. Thank you for taking my question. This is Juliana for Ike. Just a couple of questions. First, on how you’re thinking of G&A marketing and tech spending efficiencies moving forward. I know you mentioned about 200 basis points and efficiencies there this quarter. If you can maybe give me some more color on that.
Sid Thacker: Sure. I think, look, the — we obviously called out two numbers on the prepared remarks. The first is, we saved $27 million in fixed costs as a result of the Q2 2022 restructuring so far. In the third quarter, we enacted further changes primarily affecting the technology line that we will — we expect will save another $5 million on an annualized basis starting the fourth quarter. And I think the message that we’re sending to you is, it’s not — we’re continuing to focus on the cost structure. We continue to look at every spend no matter how small it is and making sure that we bring that fixed cost structure to a level where if we don’t rely — if we don’t want to rely on any sales growth, can we get this business to break-even in fiscal 2024? So that is our aim and we’ll make sure that the cost structure reflects those ambitions.
Juliana Duque: Great. Thank you. And then just one follow up. Are there any thoughts on subscription pricing, taking price there or maybe tying that into there’s any updates on market share, how you’re feeling about your position in the rental market overall?
Jennifer Hyman: We think our subscription pricing is in a really good place. Of course, as Sid mentioned, our goal is to continuously be offering our customers more and more value quarter-over-quarter. We started this year with that philosophy in mind by launching an extra item for all of our customers, really giving them 25% more value for the same price. We’ve followed that up by now giving them free Concierge and free styling via text. Now expanding the MSRPs of our selection. Our selection has continued to become more high end over time, even as they’re getting more items. So for us right now, it is about delivering a better experience, a more aspirational and premium experience to our user base. It is not going to be about increasing price.
