The Atlantic: “The Solution to High Online Return Rates? Stores! ‘
What’s the big takeaway from Amazon’s apparent decision to open small department stores? It’s that merchandise is expensive to ship and even more expensive to bring back and the best way to make money with it is to have people buy it and bring it home themselves.
This is the account of Atlantic editor-in-chief Amanda Mull in an article this week titled “People Loved Shopping Malls.”
“The people doing the Amazon calculations aren’t stupid. It’s a company that strives for efficiency at virtually any cost and encouraging people to buy three sizes of the same pair of jeans and return two just isn’t effective, ”Mull wrote.
“It is, in fact,” she continued, “a huge waste on almost every level, and not even a particularly interesting experience for buyers, who now have to run a small-scale logistics business for themselves. ‘ensure that things they don’t want are repackaged, sent back to a particular company’s return window, and actually reimbursed.
Mull noted that 25-30% of online purchases are returned, and each return costs the retailer between $ 10 and $ 20. Returns increased 70% during the pandemic, she noted, and – as most seasoned online shoppers know – retailers often return money to buyers and tell them to keep the product. It’s cheaper that way, but not very healthy for the highest incomes.
“What solves all these problems: the high return rates, the prohibitive cost of last mile freight, logistical nightmares, buyer frustration, and the monumental volume of consumer waste it all sends to landfills.” ? Mull asked. “Stores. Go to a store.
Mull argues that merchandise is physical and therefore the best and cheapest way to view, test, try, and bring home is to get it from a physical store.
“During the pandemic, the volume of online shopping has taxed the country’s shipping and logistics infrastructure beyond its breaking point,” Mull concluded. “There is no clear way for the industry to keep pace if demand continues to grow.