Embracing Returns to Drive In-Store Sales

By Charles Dimov

Where some see Amazon.com as a competitive force to steer clear of, others see the value of playing nice. Kohl’s is one traditional retailer deciding to partner with the 800-pound gorilla, and having paved the path, you can be sure that others will follow.

Kohl’s is now accepting unpackaged Amazon returns in its store, independent of any prior engagement with Kohl’s. The pilot project showed legitimate promise. It drove shoppers — some of them brand new to Kohl's altogether — into the retailer's stores more frequently. Sales grew and now Kohl’s will expand the offering across all locations nationwide.

There’s a significant piece of this initiative that other retailers need to focus on. It’s not about taking a stance on whether to cooperate or compete with the retail heavyweights. Rather, it’s the idea of focusing on increasing foot traffic. Once a company understands the real influence in-store returns have on sales, it will be eager to welcome home its own retail returns, modifying systems and processes to optimize the outcome.

Returns: Turning a Bad Word Into a Good One

Several recent studies show that consumers prefer to return merchandise to a store. This demonstrates the broader influence that in-store returns can have on potential sales. Returns don’t have to be something that retailers fear.

Fifty-eight percent of consumers actually prefer to make returns in person, and 75 percent of today’s shoppers have returned items in-store.
Returns are thought to be a routine part of shopping, according to 82 percent of consumers.
Currently, only 42.1 percent of U.S. retailers offer buy online, return in-store (BORIS). And when a customer returns merchandise in-store, as many as 53 percent of them purchase additional, unplanned items during that trip.

Relieve Headaches Associated With ‘Big’ Products or Service Delays

Whether considered big ticket or just of great physical size, some returns need to be made in-store. Accepting in-store returns for furniture or expensive electronics, for example, saves a retailer hefty shipping charges if free returns shipping is part of the offering. Making these returns an in-store event reduces the risk of a pricey item getting delayed or lost in the shipment shuffle.

Aside from size and cost issues, think of ways to make the experience seamless for customers. Is the service desk close to the store entrance? Are sales associates properly trained to provide quick assistance? Additional in-store sales are the goal of this increased foot traffic, but customer loyalty hangs in the balance as well.

Look for Even More Ways to Take Advantage of Returns

With the rise of omnichannel shopping, retailers have a chance of increasing in-store traffic — and resulting sales — by accepting third-party online returns in-store. As with Amazon and Kohl’s, it’s clear the strategy isn't limited to a retailer’s own inventory. Another example is Happy Returns, a startup company that allows pure-play e-commerce retailers to route their returns to a partner brick-and-mortar retailer. Increased foot traffic for the retail partner, an easy returns process for the originating merchant, and a free and convenient experience for the customer are considered wins for everyone.

Whether retailers are accepting online returns from their own website or a partner’s, the benefits are clear. Returns drive foot traffic and foot traffic drives purchases. However, you need to guarantee the returns process runs smoothly for everyone involved and that the customer is pleased. To do this, retailers need to make sure they have clear policies, the right technology, appropriate signage, dedicated in-store space and well-trained staff. Ultimately, these factors all need to work together to manage the influx of returns and new potential customers. The increased foot traffic is also an extra opportunity to engage with the shopper. In today’s retail climate, that’s something you simply can’t take for granted.