Rent the Runway CEO Says Transparency About Logistics Problems Boosted Brand Loyalty

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When clothing rental company Rent the Runway first came on the scene in 2009, there were few brands like it on the market. And because of the company’s pioneering approach to fashion, CEO and founder Jennifer Hyman said, it’s had to figure out a whole new logistical system to go along with it.

As you might imagine, there have been some bumps. On the first day of the National Retail Federation’s annual conference in New York, Hyman admitted that as the brand was rolling out a new warehouse system to help increase inventory for customers, Rent the Runway ran into logistics issues that slowed down shipments for many customers, creating a massive influx of customer service requests.

But while the crisis landed Rent the Runway in the headlines and forced the company to pause accepting new subscriptions for its unlimited rental program, Hyman said, she feels confident it was handled in the best way possible.

“We took the decision to be entirely transparent with our customers about what was happening and why this was happening and to be very generous with them financially as well,” Hyman said during a keynote talk on Sunday at NRF 2020: Retail’s Big Show. “Rent the Runway, as an innovator, is never going to be perfect. There are going to be times in the future where we innovate on behalf of our customers and fail. But we are committed to transparency and a commitment to always do the right thing on behalf of our customers.”

Hyman said that being open with customers about what was going on—the brand released a statement from Hyman herself at the time, explaining the issue and explaining that the short-term issues were the result of investments in long-term success for the brand and its customers—ended up making what could have been a major debacle a net positive for Rent the Runway.

“Interestingly, this warehouse delay that we had I think fostered even greater loyalty in most of our customers, at least that’s what we’ve seen in the last few months,” Hyman said.

Since the issues were resolved and Rent the Runway started taking on new subscribers, the brand has worked to expand its footprint even more with new brand partnerships informed by the decisions customers are making and the data the company collects. In December, Rent the Runway announced a new program with W Hotels that lets guests have four items delivered straight to their hotel rooms for $69. That decision was prompted by subscribers changing their shipping addresses to hotels when they were on vacation—and Rent the Runway realized it could make the process easier.

“We saw that women were already doing this, and we thought we could take this one step further,” Hyman said. “We wanted to create the dream of traveling without luggage.”

Last year was a big year for Rent the Runway—in addition to its partnership with W Hotels, it also rolled out children’s wear, started a partnership with West Elm for furniture rental and became a unicorn with a $1 billion valuation.

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