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Online Retailers Find Huge Impact In Returns

TMCnet Feature

December 26, 2013

Online Retailers Find Huge Impact In Returns

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By Steve Anderson
Contributing TMCnet Writer

Online shopping has been the kind of thing that, for a lot of people, has really improved the holiday shopping season. I personally set foot in a store exactly once for my holiday shopping, to pick up a 20 pound bag of black oil sunflower seeds for an aunt with a fondness for watching the birds gather around a winter bird feeder platform. But what the online shopping concept doesn't usually talk about is the returns; returns have long been a part of the landscape for normal retailers, and online retailers are beginning to see the huge costs and huge hassle associated with bringing back a product.


Kurt Salmon, a retail consultancy, spells out the issue rather nicely: when it comes to purchases made online, almost one in every three items is returned. That alone is quite the hit, but it only gets worse: shipper UPS looks for returns to rise fully 15 percent over the numbers of returns from last year, so an already huge problem will only get more pronounced in the coming weeks.

That's posing a new and interesting set of responses from retailers. For instance, the fashion mavens at Rue La La are offering up a new program to better stock customers' purchasing history and access to sizing data so customers are more likely to get what's wanted the first time around, instead of finding something's too small or too big. But customers seem comparatively happy about this; Rue La La's chief executive Steve Davis (News - Alert) notes that no negative feedback about the sizing information has cropped up yet, so that suggests a welcome policy in effect, and a way to help Rue La La address its own return issues, which cost the company reportedly $5 million in 2012.

Other plans include making different coupon offers to different shoppers, based on return policies; at Modnique.com, for example, customers who make a lot of returns are finding coupons for jewelry or beauty products in inboxes instead of clothing and shoe purchases. Clothing and shoes are more likely to end up returned than jewelry and beauty products, so Modnique is looking to take advantage of that to reduce returns. Some are even offering extra help and advice, even some videos in some cases, on how to use or assemble products so customers don't get frustrated and demand a refund when something doesn't work to satisfactory levels.

Indeed, in online shopping—perhaps even more so than regular shopping—a certain amount of returned merchandise is to be expected. After all, it's hard to try on a shirt found online, and even just shopping by sizes can wind up a catastrophe as people discover that a 38 long made by one company doesn't quite match up to the 38 long made by another company, and that's before the issue of aesthetics gets involved. But indeed, there are some things that can be done; Rue La La's effort to use shopping history proactively isn't a bad idea, and smacks a little of some big data applications that have brought value to businesses by better predicting trends, including the kind of trend that says customers are often spotted returning orders of a certain size or color or operation style.

Returns will be a part of most any business. Online retailers will be no exception here. But managing these returns, and keeping said returns to a minimum, will pay substantial dividends as businesses have less to deal with and can focus resources elsewhere, making for better services and prices for customers as well.




Edited by Cassandra Tucker


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