To try or not to try (before you buy)?
Dealing with the returns problem
How many times have you bought something online only to find that it looks nothing like the product advertised online?
Better yet, how often do you avoid online shopping due to the lack of possibility to try on the clothes you want to buy?
In fact, the biggest downside of shopping online is not knowing how you will like the product in real life. Besides the look, the feel and size, the individual fit plays a major role for consumers.
Retail companies have struggled with this for years now, as return rates can reach 30% or more for mid-sized retailers, whereas brick and mortar stores average at 9%. The returns trend is crushing profit margins of 70% of retailers worldwide.
Strangely enough, retail companies continue to provide more and more options and opportunities for returns to consumers, as this is simply a new prevailing consumer breed: 'the intentional returner'.
Such shoppers tend to order large quantities of items - be it clothes, accessories, home appliances or even furniture - only to keep those that meet their needs and expectations and return the rest. Clearly, this cost is a pain to e-commerce businesses, but it turns out that embracing this consumer behavior and encouraging it further with options such as 'try-before-you-buy,' retailers have a chance to benefit. A Brightpearl study indicates that 50% of 18–24-year-old shoppers from the UK, admitted to shopping online with the plan to return items later. The majority of respondents believed that they would buy two or three more items monthly if 'try-before-you-buy' was available!
Despite the massive cost of returns, it still makes more sense for retailers to give in to the trend and please their customers for the sake of attracting them, with the exception of recurring return violations, which should simply result in a (temporary) ban from a given store. To keep up with the market, there is no other way to deal with the return policy violators but to follow Amazon's example and implement similar try-before-you-buy services.
But how does this solve the issue?
The try before you buy model provides a lot more flexibility towards consumers, as it also enables them to be in more control of their finances. It helps to overcome the purchase barrier, as consumers aren't pressured to pay up-front anymore. The one implemented at Topshop even allows buyers to break down the payment into multiple installments over a certain period of time. So now, shoppers who wouldn't have bought anything before are able to purchase items they can only afford to pay for a couple of weeks later. The payment might be delayed, but what's the most important for retailers is that the purchase happens and that the quantity of orders kept is higher than before.
This model isn't just a win-win for driving conversions, but also for enhancing the online shopping experience and demonstrating an increased level of trust towards the consumer.
So prepare, as more and more companies implement this new shopping option. It's already shifting from being a rare convenience of taking multiple items home to try on without paying, into the new customer expectation norm. At this point, already thousands of retailers have followed in Amazon's footsteps and implemented such an option, with an estimated quarter of retailers worldwide expected to implement a version of the try-before-you-buy program in 2019.
Amazon, the first retailer to have implemented it, uses it as an argument to lock consumers into its Prime subscription, worth £79 a year. Besides 'try before you buy', the service offers unlimited free deliveries and media streaming services.
This new shopping model surely will excite many consumers. While it certainly opens new opportunities for more sales, retailers might struggle with a sudden rise of returns. That's why, to ensure a smooth movement of goods, they need to take preliminary actions to prepare for the management of those items in the warehouses.
The increasing amount of returns led retailers to seek a returns management solution, which would both streamline the returns process and maximize value.
One way of staying ahead of the returns tsunami is the URBANTZ suite. It not only offers an easy-to-use last mile management platform for deliveries with a live-tracking feature but also allows its users to combine deliveries with pick-ups. With the help of this tool, "try before you buy" customers could have new items delivered and others picked up to be taken back to the warehouse at the same time.
This ensures a seamless process of returns, making sure that the consumer knows exactly when the pick-up will take place, the truck space is optimized according to the orders made on a given day. Besides this, drivers could easily keep the information about both deliveries and returns in the same dashboard, while communicating the delivery status to the management back at the warehouse in real time.
One thing is clear, no matter if consumers decide to use the try before you buy option or continue online shopping and intentionally returning as they currently do - retailers and e-commerce specialists need to take action and stay in control of their first and last mile logistics.