1/9/2024 0 Comments Thred up returns![]() ![]() In doing so, retail brands are able to justify charging for returns, which many more are hoping to introduce without negatively impacting the customer experience.Ī number of brands including New Look, Moss Bros, and Mountain Warehouse have all recently introduced charges for online returns. While it is a rather radical approach – and one that is only successful due to Patagonia’s commitment in other areas, such as charitable donations and sustainable materials – other retail brands are also taking heed and actively educating customers on what the impact of returns might be. Patagonia’s purpose-driven business model is centred around educating consumers about the environmental cost of over-consumption, ultimately encouraging them to buy less. Worn Wear also encourages in-store drop-offs in exchange for store credit, too, to further encourage a sustainable approach to resale.ġ6 ways retailers can improve their approach to online returnsĮducating customers to actively discourage online returns One of the most successful examples of this is Patagonia, which pledges never to dispose of returned items, instead selling them on its Worn Wear marketplace, which also buys back old clothes for repair and resale to drive a circular fashion model. Peer-to-peer returns can also be made on third-party resale marketplaces like eBay, Depop, and Thredup, but in certain instances, retail brands are creating their own resale sites to combat returns. ![]() As well as helping to retain the cost of the initial purchase, the idea is that exchanges create a more positive experience for customers, which in turn is more likely to generate loyalty and fewer returns in future. Return management company Loop does this by offering customers one-click exchanges on retail sites, as well as additional incentives such as bonus credit and free shipping. Other technology solutions are aiming to help retail brands retain revenue by encouraging exchanges rather than returns. Canada-based start-up, Frate, offers a similar business model, also using QR codes to create shipping labels for customers selling on their unwanted goods. Essentially, instead of sending returns to the retailer, customers can send them directly on to each other for a discounted price. ![]() The company’s tech plugs into Shopify websites, enabling customers to select items that other customers want to return. Technology companies such as Greenlist are aiming to alleviate the issue by offering retailers new ways to handle returns, such as peer-to-peer. However, a common misunderstanding is that all non-defective items will make their way back into retail stock to be resold, but the reality is that most do not. For clothing and apparel, this is often due to items being the wrong size or fit, or because the customer has bought multiple items with the intention of returning a part of the order (a practice known as ‘bracketing’). Only 20% of retail returns are reported to be defective, meaning that the majority of items are returned for other reasons. Promoting resale and peer-to-peer returns Many companies are either looking for ways to make it harder for customers to make online returns (via charges or limits on regular return), or conversely, even more convenient to return items in physical locations. Optoro states that, for 2020 alone, returned inventory created 5.8 billion lbs of landfill waste, while shipping of returns emitted 16 million metric tons of carbon dioxide.Ĭonsequently, the retail industry has started to re-think its approach. The high cost also means that most items end up in landfill rather than being re-stocked. Optoro estimates that it costs an average of $33 or 66% of the price of a $50 item for retailers to process a return, with costs stretching from processing to discounting and liquidation losses. Now, however, the high cost of returns is becoming impossible to ignore – both to retailers and the environment. Previously, the retail industry has focused on making returns as fuss-free as possible. Rebound suggests that inflation and the cost-of-living crisis could be a factor in rising return rates, with consumers exhibiting greater caution over spend, as well as impulse buying on Black Friday (before deciding to return). ![]() Similarly, Salesforce noted a surge in returns, citing a 63% increase in returns year-on-year for the holiday period just gone. According to data from Rebound, UK retail returns were 26% higher in November 2022 compared to the same period the year before. ![]()
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