The tide of new technologies and trends for online sales continues to grow.
While it obviously favors the industry giants, it is unclear whether small businesses can join these new platforms as well.
Try Before You Buy (TBYB) is fast becoming an ecommerce trend that should be viewed with caution.
It’s a scheme where online shoppers can order dozens of items to try on, return the ones they don’t want to keep, and then receive a refund, even if the retailer they purchased from has not yet processed the returns.
While it is good news for consumers, TBYB poses a serious threat to a seller’s earnings according to a new study from omnichannel retail management firm Brightpearl.
Their findings, which were obtained from 200 retailers and 4,000 consumers surveyed in the US and UK, showed that shoppers would purchase an additional five items each month if offered the option to try before they buy.
However, 87% of them revealed that they would return up to seven purchases. As if this weren’t enough to cripple a company’s bottom line, 85% of shoppers surveyed said they expect their retailer to offer free returns.
That kind of mindset and expectations are hitting marketers, especially those who have been experiencing reduced profits lately, in a really bad way.
40% of companies have already seen a significant increase in “intentional returns” in the last year, as several of their customers ordered too many items knowing that returning them was free or cheap.
Driving on a one-way street?
It is correct to think about the well-being of your clients. And while we’ve repeatedly emphasized the importance of meeting your needs and wants to achieve the success you’re looking for, that doesn’t mean you should put your business on the line.
Receiving a mountain of products returned with open arms and facing the substantial cost on your own is simply absurd.
The try-before-you-buy service may be popular with the giant online stores that started it, such as Amazon’s Prime Wardrobe, Asos, and Topshop, among others, but if you’re not ready to follow suit, you’ll only be affected by your Margin. profit.
It would do you good to first weigh the pros and cons of such a scheme. Actually, find out how avoiding driving on a one-way street can benefit you and your customers.
Although it could potentially increase sales, Derek O’Carroll, CEO of Brightpearl, explained:
“Try Before You Buy is an interesting model, with obvious benefits for consumers and businesses, but it is something that retailers should view with caution. The impact on return rates could cause devastation for online retailers who are already seeing how their margins are greatly reduced. “
The Brightpearl survey further revealed that 17.5% of ecommerce stores have already adopted the TBYB scheme, and more than a quarter of them are expected to offer something similar to their customers by next year.
So is everyone excited or a little hesitant about this growing trend?