Unlimited free clothing returns have been a bane for stores.and they will end

2022-06-28 10:40:54 By : Mr. nick xia

Receive an email a day with our articles:Retail is not going through a good time.During the last year we have talked about the dismal situation of the supply chains, the problems with the containers, the expensive raw materials and the shortage of consumer goods.A dynamic that has not yet ended and that is now added to other factors such as the return to normality in physical commerce, Shein's Chinese competition and the economic situation, aggravated by the war in Ukraine and inflation.According to the latest price data from companies such as Zalando or Asos, its fall is a reality.And many of these companies blame the losses on another big factor: a spate of order returns.Yeah, free returns sounded great.But it is spelling doom for business.Plummeting drop.As illustrated in this Cinco Días article, Zalando, Asos and Boohoo have all suffered huge price losses in the past year.74%, 82% and 80%, respectively.Between the three, a drop of more than 27,000 million capitalization.Zalando, which has always prided itself on free returns, suffered a 10% cost-per-order increase for that reason.His solution now is to establish a minimum price per order, in addition to passing on part of the cost of energy to logistics companies.The same has happened with Asos, which links losses to economic uncertainty and returns.Basically, they claim that they increase delivery and storage costs and prevent more stock from leaving."Inflation is impacting the mood of customers. But above all, in a significant jump in returns, which has had a disproportionate impact on profitability," said its CEO.A problem of more than 761,000 million: Retail profits increase as online sales grow, yes.But as customers shop more with their devices, they also return more of their purchases.Specifically, these returns already add up to 761,000 million in the US alone, according to a survey by NRF.The average return rate for online purchases was 20.8% last year.That is, one garment out of five is returned.The tendency.We can say that that user who asks for several sizes to try them on at home and ends up returning several garments (or all) after receiving them, often taking advantage of the fact that returns are free, has become the common denominator.Now, the message "if you're not satisfied, we'll give you your money back" has become a headache for companies like Amazon, Zalando or Asos, who have seen how they have to deal with a huge number of free exchanges.The economic cost of returns, collection transport, storage and the work necessary to re-prepare the product and make it available for sale again is one of the biggest concerns for large companies.Let them keep it.The efforts of the stores are such that on many occasions it is cheaper for them in terms of costs to return the money and let the consumer keep the product.Yes, as you hear.This is what the big e-commerce companies are already doing, they have begun to return the money but letting the consumer keep some products.They recommend that they donate them if they do not want them, as reported in a report by The Wall Street Journal.In fact, Amazon is already using this option.Why do they return the money and do not collect the product?Basically because recovering those products, in terms of cost, is often not worth it.It may seem like an absurd strategy (losing the product and the money from the sale), but it makes sense if we think about transport costs.The return can be up to 66% of the price of a product.Solutions.For some retailers, this problem has led them to adopt new and more innovative measures.Walmart has launched virtual fitting rooms and Best Buy has an online outlet where it sells unlocked appliances covered by a warranty.Inditex, for example, continues to extend its return payment to more countries.Months ago, it established a €2 fee for returns of online garments.Uniqlo more of the same: you can only return by mail (and you pay shipping).It has worked for them so far: it has not affected sales and store returns have grown.Just what they wanted.Share Free and unlimited clothing returns have been a bane for stores.and they will endSee more articlesSee more videos