According to the National Retail Federation, the average retailer in 2020 incurred $106 million in returns for every $1 billion in sales.
Yep – that’s a lot of lost sales.
Of course, it isn’t possible to combat every return that comes back into the warehouse. Products by defective, or even damaged during transit.
But the majority of returns don’t happen for these reasons; it’s because an item is the wrong size, the wrong color, or just ‘not right’.
Given that online shopping doesn’t allow customers to try before they buy, this is hardly surprising. But many consumers are now getting the best of both worlds; the convenience of shopping online, and hassle-free returns policies that allow them to turn their bedroom into their own personal fitting room.
This has helped to fuel the rise of ‘bracketing’ – and many retailers are struggling with how to manage this costly shopping trend.
‘Bracketing’ is a shopping strategy in ecommerce where customers buy multiple versions of the same item to try at home, with the intent of returning those that aren’t suitable.
Bracketing is most common for apparel and accessories where variations exist for size and color, and also for home goods, where consumers want to test items within a specific environment.
It’s easy to see why bracketing holds so much appeal for online shoppers. If they haven’t shopped with a brand before or are buying from a new category, it can be difficult to know what size to buy or whether the color depicted on-screen is accurate. It’s exactly this kind of uncertainty that drives many consumers away from purchasing certain products online.
By bracketing their purchases, consumers can overcome one of the biggest disadvantages in ecommerce; they get to replicate the in-store experience of trying on clothes in the changing room to find the perfect fit – from the comfort of their own home.
There’s also the added advantage of seeing how a garment can be mixed and matched with the rest of a wardrobe or how an item looks in a certain space, which builds confidence in a purchase.
In the past few years, bracketing has only gone in one direction – up.
According to Narvar’s 2017 survey, 40% of consumers had bracketed at least some of their online purchases, especially for apparel and home items. In their 2020 study, this was found to have surged to 62%.
So, what has caused such a major shift within a three-year period?
With the bulk of this increase taking place between 2019 and 2020, it speaks to the impact that COVID-19 has had on the retail sector as a whole.
With consumers either unable or unwilling to shop in person due to the pandemic, it has driven more people than ever before to take their shopping activities online.
This has led to two interesting (and intertwined) side-effects – both of which have fuelled this massive rise in bracketing.
Firstly, supply chain issues and difficulties with timely delivery have been widespread over the past year. This has led many consumers to experiment with new brands that they wouldn’t usually buy from.
While this is obviously beneficial from a customer acquisition standpoint, a lack of familiarity with a brand’s offerings has pushed many customers to bracket purchases out of caution.
Secondly, in-store retail restrictions have forced consumers to shop for certain product categories online that they would normally buy in-person. For example, many of us would rather try on a pair of shoes before committing to purchasing. With this option no longer available, bracketing has become an increasingly viable alternative.
It’s easy to see why bracketing has spiraled in such a short amount of time. But this leaves retailers with a significant problem; once consumers have adjusted to certain shopping habits, they’re likely to stick – even once the retail sector returns to normal.
In retail, what’s convenient for customers often equals a major problem for merchants. As bracketing has grown more popular, online retailers are struggling under a tidal wave of returns.
But it’s wrong to characterize these kinds of returns as just a loss of revenue; bracketing also creates some major logistical issues for merchants which can have a negative effect on the customer experience:
Real-time inventory management has become an essential tool in ecommerce. However, bracketing is highly disruptive to these insights because it can create artificial SKU shortages.
When a customer brackets a purchase, several variants of that product are removed from inventory at the same time – only for some of them to reappear later. When this happens en-masse, it’s immensely difficult for retailers to make accurate replenishments, as they have no way of knowing which sizes or colors will ultimately be returned.
When customers are ordering multiple items, this influences to cost of fulfilling that order. For example, if a customer buys one garment, it’s likely to fit into a poly mailer. This means cheaper packaging and shipping for the retailer.
But when a customer is buying multiple garments, a cardboard box is the more appropriate option to avoid split shipments. Due to the costlier packaging and higher DIM weight, the cost of fulfilling that order will be higher.
Normally, retailers can shoulder these costs without any issues. But that order is a bracketed purchase, much of that revenue disappears when the rest of the products are returned. This can leave merchants with drastically eroded profit margins.
When return volumes are high, this can put a massive strain on a retailer’s returns management capabilities. If returns processing slows down, this also means longer wait times for your customers to obtain refunds. When positive post-purchase experiences are the key to building brand loyalty, this can seriously affect your ability to retain customers due to poor after-care.
There’s a key reason why many retailers are struggling to deal with bracketing effectively; it frequently gets lumped in alongside much more insidious practices such as ‘wardrobing’ (where consumers wear items once and then return them). This means brands end up taking often extreme measures to prevent bracketing – rather than trying to understand what drives the practice in the first place.
The fact remains that consumers aren’t intentionally trying to short-change retailers when bracketing purchases; they’re simply trying to minimize friction within the shopping journey.
So, if your customers are turning to bracketing to ensure they’re buying the right items, it’s a good sign that you need to take a closer look at your shopping experience.
If bracketing is a persistent problem, it’s probably because your customers are lacking comprehensive product information that would allow them to purchase with confidence.
For example, simply labeling a garment as ‘size 6’ is of very little value to your customers. A size 6 at one brand will likely differ from a size 6 somewhere else – often by a huge margin.
You should be including a comprehensive guide that lists the average dimensions for each size, including chest, waist, hips, and leg length, depending on what is relevant to the garment. (If you’re stocking multiple brands through your store, you should be providing a dedicated size guide for each).
Another great technique is to use product imagery to inform your customers. A growing number of fashion brands have begun listing the height and clothing size of their models on product pages, allowing consumers to gauge much more accurately how a certain style will look.
This may sound wildly futuristic, but rapid technological advances in both AR and AI have made trying on garments virtually a reality.
Etsy, for example, now offers an augmented reality feature so that customers can ‘place’ home decor and furniture in its desired location within a room, while platforms like OBSESS allow retailers to create their very own virtual try-on service that integrates directly with their ecommerce store.
These kinds of experiences don’t just make customers more likely to buy an item; they also lower return rates dramatically. Zeekit, an AR tech company, found that brands using its technology saw return rates drop from an average of 38% to just 2%.
Ever been into a clothing store and noticed that there seems to be a lot of one particular garment on the rack? This is a pretty clear sign that for whatever reason, consumers are simply not gravitating towards that style.
In brick and mortar, this is a much easier issue to confront. For one, your staff can see this trend with their own eyes. They can make an effort to ask customers who try on that particular garment why they didn’t buy it. In sum, stores are able to identify this trend as it happens.
For online merchants, this can be a lot more challenging. It’s only when a particular product is seeing consistently high sales and return rates that they are able to pinpoint a widespread bracketing problem.
But the returns process itself is a great opportunity for retailers to gather data on why returns are taking place. Asking about the reason for the return and giving your customer space to add additional comments is invaluable to understanding areas of friction in your own shopping experience that are driving bracketing.
Despite hating returns, many retailers don’t have a system that allows customers to easily swap items for other sizes or colors. The alternative is for someone to buy an item, try it at home, find out that it’s not suitable, return it, and then make an entirely new order.
This time-consuming scenario only incentivizes consumers to engage in bracketing to make their shopping journey more efficient – and you can hardly blame them.
Consider subscribing to a returns management system like Happy Returns encourages customers to exchange rather than return goods. Its one-click exchange system will suggest alternative sizes when the customer lists ‘size’ the reason for returning, making it hassle-free for them to manage their orders with the need to bracket.
By integrating the above advice into your returns management, you have a great strategy to combat bracketing at your online store. Not by penalizing customers who partake, but by improving the shopping and returns experience so that bracketing is no longer necessary.
For some retailers, it requires a bit of a change in mindset to stop viewing returns as an inconvenience that hurts your store. When managed well, returns can be one of the best ways to foster brand loyalty in ecommerce.
Want to know more? Check our post on why it’s time for retailers to embrace returns culture.
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