After briefly shutting down services to new subscribers and event-related rentals for roughly a week, Rent the Runway reopened for business on Tuesday, a week ahead of schedule.
The clothing rental company, which is valued at $1 billion, ran into some glitches with new warehouse technology that led to delayed and cancelled orders for hundreds of existing customers. Those glitches impacted roughly 14% of subscribing customers and about 6% of event-related orders for anyone who placed an order over the weekend of Oct. 4, a spokesperson for the brand said.
The company decided it would be better to pause a handful of services rather than get increasingly backed up by taking on more orders and customers.
“As the company looks at other software upgrades or integration cycles, it will, I am sure, test earlier and more often prior to a systemwide roll out,” said Sandy Rubinstein, CEO of digital ad and creative agency DXagency.
The warehouse technology that caused the initial issues is designed, in part, to improve the customer experience by improving product availability. Basically, the company wants to make more items available to customers when it’s time for them to select their next shipment. One criticism the brand has received in the past is the selection feels limited or picked-over when customers go to make selects for their next shipment of clothing and accessories.
According to a brand spokesperson, the shutdown led to only minor impacts on the long-term business. The brand did not share specifics around the overall business impact. Rubinstein said she believes the short pause in business won’t do too much damage overall.
“It’s not that long of a down period, and they are up and running, which limits the negative perception of the brand. They have also compensated consumers who were adversely affected, so I believe it will have limited long-term detriment to the brand … and limited long-term impact on revenue,” said Rubinstein.
But Rent the Runway needs to ensure hiccups of this scale don’t become a habit.
“Any time a company stops accepting new customers, it will negatively impact revenue,” said Jan-Christopher Nugent, CEO and co-founder of e-commerce and online marketing firm Branded Online. “A customer can be fickle, but also forgiving. Offering $200 to customers who were impacted will go far. Customers will also quickly forgive if RTR continues to offer current desirable fashion. However, the company is in a precarious time. Another blunder in the next few months will erode customer loyalty and trust.”
This isn’t Rent the Runway’s first customer service-related challenge, and it likely won’t be the last as the company continues to grow. In July, Rent the Runway CEO and co-founder Jenn Hyman hosted a Twitter chat to address customers’ questions, concerns and frustrations with the existing business model. Participants pointed to a poor user experience on the mobile app, orders arriving with missing or damaged items, and long wait times via both email and phone to speak with customer service representatives.
In tandem with the Twitter chat in July, the company worked to double its customer service team. It plans to continue expanding that team over the coming months, as more subscribers join on.
Even with these hiccups and press coverage around issues with the service, it seems that Rent the Runway has had little trouble bringing on new subscribers. In the 11 days that Rent the Runway stopped accepting new subscribers, it amassed a waitlist of over 1,000 customers. Those customers have all been released from the waitlist as of Tuesday, the spokesperson said. The company did not comment on whether that number of new subscribers is normal within the aforementioned time period.
Moving forward, Rent the Runway needs to always think about the customer experience first and test any new technology before rolling it out, said Rob Shaw, managing director at software company Fluent Commerce.
“You should never let the internal pressures of getting new features out compromise the quality of service that you are bringing to your customers. Retailers should always think of the customer first, not what the competition is doing, and allow for comprehensive testing before launching a new service or capability,” said Shaw.
