Logistics & Fulfilment

What online retailers should take away from Rent the Runway’s logistical nightmare

Rent the Runway is a US$1 billion business that made fashion rental mainstream. But in recent weeks, the New York-based company has been making headlines for all the wrong reasons.

After implementing a new system to handle inventory in its New Jersey warehouse, the rental company started experiencing problems that led to some orders being delivered late and others not at all. Customers calling Rent the Runway’s customer service team faced two-hour-long wait times, according to Recode, which first reported the issue on September 24.

Frustrated, they took to the company’s social media profiles, complaining about the poor service and lack of communication. Many customers had chosen to rent an item for a specific occasion and timed their order to arrive a day or two before the event, so were left scrambling to find a last-minute replacement outfit.

While Rent the Runway CEO Jennifer Hyman said everyone on the team, including herself, was working around the clock to respond to complaints and repair the new inventory system, she warned it could take until October 15 for Rent the Runway to be fully operational again.

In the meantime, the company refunded disgruntled customers and gave them $200 in cash. It also cancelled all existing event rentals, warned subscribers of its recurring rental service that orders would be delayed and stopped taking new subscribers until October 15.

It’s a nightmare scenario for any e-commerce business, and Dean Jones, co-founder and CEO of GlamCorner, the Rent the Runway of Australia, can commiserate.

“It’s like trying to do maintenance on a locomotive when it’s in full flight,” he told Internet Retailing about upgrading back-end systems while continuing to sell to customers online.

“It’s complicated. Little slips can be amplified.”

Here are his tips for avoiding a similar scenario in your own e-commerce business, and how to handle it when the inevitable happens.

Build in circuit breakers

“We’ve built a lot of circuit breakers into the business, so that when things go wrong they get flagged quickly, and we can stop the spread,” Jones said.

“We have redundancies in picking and packing, for instance, to avoid bottlenecks. We have many different picking desks [working] each day, there’s not one central one, so if something goes wrong, we don’t get a bottleneck.”

Don’t ignore anomalies

“One piece of advice I would give is don’t ignore the little bugs that are anomalies. Sometimes they’re early symptoms of a big, underlying issue,” he said.

“We’ve had customers email us and say they just received their order twice. On a small scale, that’s not an issue, but one day it could happen to a couple hundred people. If left unchecked, a little bug could become a much bigger issue.”

Accept the inevitable

“When NASA sent the Hubble telescope into space, they got the mirror wrong, and the telescope wasn’t operational for three years. Even NASA makes these mistakes, it’s just part and parcel of it,” Jones said.

“When you’re doing new things, there’s no playbook, there’s no checklist to make sure you’re doing it perfectly. It’s part of the risk of innovation, things go wrong.”

“But I think the bigger risk is if the actual product you’re delivering doesn’t fulfil their expectations of what you promised. I believe customers are sympathetic to outages and mistakes, but you’ll lose a customer forever if your product is not what you promised.”

“Sometimes if you make a mistake and repair the problem, you can ironically leave the customer more satisfied than if you had done everything right.”