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The weekly dispatch: Online returns go green, the beauty industry keeps forging ahead

Illustration of a person standing at a desk gesturing to a large monitor. On the monitor is a growing seedling with a cardboard box.

It’s interesting how the more things change, the more they stay the same. The COVID-19 pandemic may have taken the wind out of the retail’s sails (and sales for that matter) but it turns out that even the most discretionary product categories are thriving amid record inflation. 

Meanwhile, even as consumers are feeling uneasy about the environmental impact of returns, expectations for a seamless return experience hasn’t lessened. Find out how to brands are navigating this climate in our weekly dispatch:

Is a green conscience changing return behavior?

A man taking a break from opening a package to rub his eyes.

It’s no secret that a smooth returns process is key to creating happy customers, but recent research by Ryder Ecommerce by Whiplash integration partner Loop reveals just how pivotal returns are within the e-commerce experience.1

The study ‘Consumer Report: How Returns Impact Customer Retention’ surveyed over 1,000 online shoppers in the U.S. to understand how returns affect future shopping behaviors. 

Not surprisingly, there’s a clear link between the flexibility of the return process and the ease of converting customers. Loop found that 96% of online shoppers will check a merchant’s return policy before making a purchase, and over half (54%) are unlikely to purchase from a brand that doesn’t offer free returns. 

While the desirability for free returns might be old news, consumer awareness of the environmental impact is a fairly recent development. 56% of Loop’s respondents say they care about the environmental impact of returns either “somewhat” or “a lot”. This may explain why 18% prefer to return products to a storefront, while 35% of consumers have chosen not to return a product at all due to concerns about environmental impact.

As sustainability becomes more mainstream, this opens up new avenues for brands to reduce their return processing costs. For example, explaining to consumers that you charge a small amount for returns as part of a carbon off-setting initiative may help to reassure eco-conscious shoppers of your good intentions.

The Beauty Industry holds steady with nearly $9B spent in 2022 so far

Makeup brushes.

Despite high inflation, supply chain issues, and a somewhat shaky economy, the beauty industry continues to flourish. Gen X and millennials seem to be playing a significant role in the steady growth from year to date in 2022, as they are the prominent spenders tied to the increase.

According to a report by the NPD group, it’s older, affluent consumers who are supporting industry growth.2 Consumers earning over $100,000 annually in household income have spent nearly $9 billion on beauty during the first half of 2022, a YOY increase of 14%.

Early forecasts also revealed recovery and growth this year for the beauty industry, as data showed sales steadily reverting back to pre-pandemic levels.3

Beauty and skincare are not just considered luxuries for many, but a necessary extension of an everyday practice.

“Outside of indulgences, it is also the case that many beauty and skincare routines are very much embedded into people’s lives so there is great reluctance to cut back on any of the products associated with them,” says Neil Sanders, managing director of GlobalData.4

A key insight from Ulta is also telling, as they’ve seen consistent growth so far this year, reporting a 17% increase in net sales just last week.  Not only do they attribute their progress in sales to their launches of MAC and Chanel Beauty, which are the most recent additions to their beauty lineup, but also how pivotal to a marketing strategy to know and understand a businesses’ core demographic. 

Google meets demand service with custom drone capabilities

Package delivery drones sitting on pavement.

The kitchen sink, TV,  or refrigerator can’t be delivered via drone – yet, according to Google, but almost everything else can.

“The vast majority of goods that folks order on-demand today can very easily be served by a drone delivery capability,” says Adam Woodworth, CEO of Wing, a drone delivery company owned by Google’s parent company Alphabet, Inc.5

Wing is the first drone delivery company to obtain an Air Carrier Certificate from the FAA, (Federal Aviation Administration), which they received in 2019. This certification allows Wing to be regarded as an official airline carrier within the United States. They have since delivered more than a million packages, with their newest and first commercial drone delivery service opened in Fort Worth, Texas in April of this year.6

Seizing upon the need for a delivery service to be more adaptable, cost-effective, and environmentally friendly, they’ve developed something they’re calling the Aircraft Library.

The library would house a myriad of drone parts to be used to build drones on demand, designed to accommodate the size or type of product to be delivered.  There would be drones rapidly configured to accommodate orders like a toaster, medicine, or even a hot cup of coffee.

Amazon begins a new era in route optimization

Amazon delivery trucks.

Amazon will soon be launching a new delivery route algorithm to cut down on last mile delivery costs.7

The CONDOR (Customer Order and Network Density Optimizer) system works by constantly evaluating customer orders once they have begun the fulfillment process, allowing Amazon to stay flexible and get more packages onto fewer delivery routes.

For example, if multiple orders are due to be delivered to the same residential address, the algorithm will group these orders together and ensure they make it onto the same delivery route.8 This dramatically reduces delivery timeframes and maximizes the productivity of delivery personnel.

The so-called ‘last mile problem’ is well-known in logistics for adding significantly to the overall cost of e-commerce delivery. One of the biggest reasons for this is a lack of route planning, resulting in higher fuel usage and longer delivery timeframes. As one of the nation’s biggest providers of same-day and next-day delivery, route optimization has the potential to save Amazon – and other e-commerce merchants – thousands of dollars every year.

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