This story is part of a series in which fashion brands speak about a mistake they made early on, what consequences they faced and what they did to right the ship.
As a young DTC brand back in 2015, clothing company Aday hit the market pushing its capsule collections. Made with high-quality materials, but with as few as five products in a collection, the capsules were a hit with customers. The problem came when Aday sold out of certain products, which it did. Often. It has since implemented pre-orders and has updated its customer service to keep customers happy.
Four years later, the company has dropped four capsule collections, including its popular “Carry-On” capsule, which sold out in 20 days. Thirty-four percent of customers who shopped the capsule took advantage of the option to buy all five pieces at a discounted price. The pieces included a day pant, which sold out in three days, and a tailored shirt, which sold out in 12 days. As products started to sell out with the Carry-On collection and other collections, Aday found the effects were too hard to manage.
“As we have grown, it’s become really hard to effectively communicate what’s taking place. We even had someone think we were shut down as a company,” said Meg He, co-founder of Aday.
Once products sold out, a customer service representative had to email individual customers with unfulfilled orders to let them know their orders would be delayed. That took a lot of time. It caused a lot of unrest from customers, lost customers and many canceled orders. That led Aday’s founders to rethink how often they should drop products. They also changed how they interacted with customers when products sold out.
First, Aday decided in the last year to adopt more of a waterfall approach to its product drops, He said. Rather than taking a seasonal approach, releasing new products every few months or even monthly, Aday is releasing a smaller batch of items — rather than five items, the brand drops, on average, three items at a time — every couple of weeks.
Aday also now uses pre-ordering, which is its answer to a waitlist. That helps the company measure demand for a product and figure out how much to make. It also prevents the company from charging customers for something that’s not available. However, pre-ordering and waitlists aren’t always 100% accurate.
“All forecasting is intelligent guesswork. We try to do our best for customers when we order product, thinking about how many days it needs at the factory or with the fabric supplier, or for shipping. It’s all a comedy of errors at some point. Sometimes the order gets lost, sometimes the fabric hasn’t arrived. As brands, we have a duty and an ability to apologize sincerely to our customers,” said He.
Taking a new approach to dealing with unhappy customers was also necessary.
Rather than a simple apology email to customers who don’t get their orders on time, or who never get their order because the size or color they want sells out, Aday’s team first offers the product to the customer in other available colors for an exchange. If that’s not possible, the brand offers up similar styles that are available and charges the same price as the original order.
If none of that sits well with the customer, Aday offers an additional store credit (on top of the promised product) to encourage them to shop more with Aday in the future. The amount of the credit depends on the size of the customer’s order, He said, but declined to elaborate. Customers can get a full refund if they don’t want to wait for the item to come back in stock.
“A happy customer is a repeat customer. It’s clear that a lot of DTC brands have figured that out. Over time, the ability to be as great in nurturing the ongoing quality of the customer relationship is going to be important,” said James Lanyon, chief strategy officer at T3.
“Internally, when we were discussing this, there were mixed reactions,” He said. “I thought it might cheapen us if we gave more credit. I want to be generous, but I don’t want to cheapen the brand.”