What happens when retail brands make mistakes?

Mistakes – everyone makes them and retailers and brands are no different. But what happens when they do? In many cases, the response and/or reaction to the mistake is just as, if not more, important than the mistake itself. Mintel recently examined a brand that has been in the news for missteps and evaluated what went wrong, how it handled the situation and the initial consumer reaction and impact.

Rent the Runway glitches cause a temporary shut down

Launched in 2009, Rent the Runway (RTR), a rental service providing clothing and accessories to women throughout the country. However, recent expansions have put the brand in the spotlight for negative reasons. In addition to renting clothing for special occasions, Rent the Runway has evolved its offerings to include two additional membership options, designed to serve more women for all aspects of their lives. The ‘Update’ options allow customers to receive four items a month, which they swap out the next month for four new options. If the customer needs more, they can pay to add on additional items. The brand’s ‘Unlimited’ option, which is $159/month, allows subscribers four pieces at a time that can be switched out as often as the customer wants, providing access to seemingly infinite styles. Rent the Runway offers Unlimited subscribers free, two-day shipping and, in some cases, offers same-day shipping.

While these options offer variety, flexibility and convenience to customers, they also create logistical challenges. In Rent the Runway’s case, these challenges are especially complex because it doesn’t operate in national physical brick-and-mortar stores, aside from a few showrooms in select big cities like New York and Chicago. Eventually, the challenges caught up to Rent the Runway and in September 2019, customers took to social media to voice their frustration, calling out the brand for inventory, delivery and order issues, as well as problems contacting customer service.

Eventually, the head of Rent the Runway’s supply chain resigned and the brand’s CEO publicly addressed the problems on Twitter. Despite recently opening a second fulfillment center to help with increased demand, these glitches signaled an expansion problem: biting off more than it could chew before understanding how to efficiently meet customer demand. In the era of social media, brands are in the spotlight more than ever with consumers taking to platforms to air their grievances. Mistakes become public knowledge and not all brands know how to respond effectively.

How did RTR handle it?

Source: Rent the Runway via Instagram

Rent the Runway CEO Jennifer Hyman took to social media to personally respond to customer complaints. She also sent emails to customers apologizing, informing them of the issues and providing anticipated deadlines for when the issues would be resolved. Additionally, the brand implemented social media accounts dedicated to addressing customer issues while silencing all other types of social media content until the issues were resolved, signaling they prioritized resolution over everything else. Rent the Runway also temporarily stopped accepting new customers until the issues were fixed.

What was the outcome?

Rent the Runway was back up and running one week ahead of schedule (they anticipated resuming October 15th but returned October 8th). The brand’s missteps put a bad taste in some customers’ mouths but hasn’t diminished interest in the brand’s products and services. In fact, Rent the Runway reportedly accumulated a waitlist of 1,000 customers during the period of time it stopped accepting new customers. It’s unclear if any existing customers were lost, but the short-term growing pains don’t appear to threaten long-term growth for Rent the Runway.

What brands can learn

Every situation is unique, and glitches for some brands will be more or less severe than this one. However, others can learn from Rent the Runway’s approach to acknowledging mistakes. The brand was apologetic, transparent and proactive by responding to its customers quickly and providing multiple ways to seek resolution. The brand’s response offered a human touch and their decision to halt new customers allowed them to solve problems efficiently, providing a better-than-expected outcome, resuming business earlier than anticipated. Customers want to feel acknowledged and brands that can make them feel personally heard while also solving the core issue or issues, will fare better than those that ignore the problem, wait too long to address it or are vague in their responses. The challenge for Rent the Runway and brands that make mistakes will be ensuring they don’t repeat them.