Apparel April 2019 Apparel May 2019 issue | Page 69

INDUSTRY INSIGHTS
it will be reforming its ‘Free Returns’ policy. The
company declared that it will be now offering
customers a choice between ‘free returns’ and
additional price discounts. This means customers
will have to sacrifice the option of ‘free returns’
and instead be satisfied with a lower purchase
price for their online purchases. This approach
seems to be on a rising trend as global retail
giant Walmart has followed a similar policy for its
US-based Jet.com. This is a major shift away
from traditional e-commerce practices and can
surely have a significant impact on the digital
retail landscape.
FREE RETURNS TOO EXPENSIVE?
The decision to phase out ‘free returns’ isn’t an
arbitrary one and is rooted in the core business
practices of any online business. It has been
an integral part of online sales as it reassures
and attracts customers, promising convenience
and security for their purchases. As a result,
consumers can order a multiple number of goods
online—sometimes different sizes of the same
apparel item—and make their selection in the
comfort of their own homes, then send the rest
back at no extra cost. This policy also allows
customers to return items that may be damaged
or defective or simply not as it appeared in an
THE DECISION TO PHASE
OUT ‘FREE RETURNS’ ISN’T
AN ARBITRARY ONE AND
IS ROOTED IN THE CORE
BUSINESS PRACTICES OF ANY
ONLINE BUSINESS.
online photo. For the longest time, this has
been the heart of the retail game—to put the
customer’s needs first. However, it does come at
a cost.
Digital retailing is an omnichannel experience
with multiple platforms that multiply the number
of customers, thereby increasing the logistical
efforts. While traditional bricks-and-mortar shops
operate a linear supply flow within a specific
geography, e-commerce platforms need to be
accessible and fast everywhere. As a result,
being an omnichannel retailer extracts a heavy
cost which constantly threatens to erase profits
from digital sales. For example, returning an item
to a physical store may appear low-cost since
staff support and infrastructure already exists.
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May 2019
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