Glossy – The fashion rental market is growing increasingly crowded, with new platforms like Nuuly and Caastle popping up every day. Rent the Runway has been in the top spot of the rental service for most of its existence, being the most recognizable name and widely credited with popularizing the modern fashion rental model. But as new players enter the market, how will Rent the Runway respond to make sure it stays ahead of the game?
Based on some of the company’s recent communications, it seems clear that customer service and other nuts-and-bolts details will be a key battleground in rental going forward. At the beginning of July, Rent the Runway sent an email to some of its customers with the title “We’re Sorry,” in which CEO Jennifer Hyman apologized for some of the issues customers had with Rent the Runway’s service. In particular, Hyman addressed the instances of long deliveries and unresponsive customer service, stating an aim to “reestablish the level of customer service [customers] both expect and deserve from Rent the Runway.”
The company also hosted a town hall on Twitter where customers could air their grievances. Hyman publicly announced that the company would be doubling its customer service team, launching a second Twitter account specifically for customer support and opening a 300,000-square-foot fulfillment center in Texas. Since the company gets 94% of its customer acquisition through organic marketing, a bad customer experience is a serious detriment to its audience building.
The choice of Texas is notable. Initially, the company’s only fulfillment center was in New Jersey, making fulfilling orders to the Midwest, for example, difficult and contributing to the company’s customer service problems. The logistics of running a company as large and as complicated as Rent the Runway, which ships, collects and cleans thousands of clothing pieces each day, are incredibly complicated.
Rent the Runway has to contend with dry-cleaning and washing all of the clothes it rents, which it does in a massive, 250,000-square-foot warehouse, which is also the largest dry cleaner in the world. At the same time, there are all sorts of other behind-the-scenes logistics to perfect, like same-day shipping in New York City, which it has done since 2017, and aligning its physical inventory with what it has on its website.
“We are definitely a machine,” Anushka Salina, Rent the Runway’s chief revenue officer, told Glossy last December. “There’s so much magic on the operations and fulfillment side of what we do; we’re such a complex logistics business.”
“The fashion rental industry is about to transform retail as we know it, and I think at this point, it’s going to be a battle of who has the best customer service and who can deliver the best customer experience,” said Steve Weiss, CEO of digital marketing agency MuteSix. “It’s also going to come down to customer preference, and I think both existing and new entrants are going to have to get very specific on who their customer is. For example, FashionPass is a clothing rental subscription company who really stands out in my mind as delivering exceptional customer service and targeting a very niche market, [millennials].”
Allison McCabe, consulting manager at BRP, agreed. “In terms of differentiating in a competitive environment, [for Rent the Runway’s competitors], it’s about a superior customer experience, and hitting all the logistical marks, vendor relationships and a customer profile that is not currently served well, or at all, by Rent the Runway,” she said. “But without the trend, category and customer data for the designated market, the build will take time.”
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