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Thanks to a new partnership, DTC brands can offer in-person returns.
Loop Returns, a platform which enables returns and exchanges for more than 1,200 brands on Shopify, has a new integration with Happy Returns by PayPal that will allow the items that don't work out quite right to be taken to drop-off locations.
Happy Returns stations Return Bars inside locations like FedEx offices and Staples. At those sites, shoppers can return an item without having to use a label or a box. Shoppers scan a QR code, get a refund and the company then handles the returned items in reusable totes.
With this integration, merchants that use Loop will be able to offer return drop-off at more than 5,000 locations across the US. The collaboration came together organically between the companies, as both entities wanted to offer more convenience with returns.
“With ecommerce returns growing more frequent and often more tedious for consumers, this partnership provides a highly sought-after solution for merchants and their customers,” said Aaron Schwartz, president at Loop Returns, told The Current.
With increased ecommerce adoption, the number of returns is likely to grow. According to the National Retail Federation, about $218 billion worth of merchandise was returned in 2021, meaning returns accounted for 21% of the total spend in online retail in the US.
“Because these returns can be such a cost center, brands not only want to reduce the rate of returns but also improve the process for both themselves and their customers,” Schwartz said. “Additionally, because ecommerce is growing and more DTC brands are being created, the crowded nature of the space can make it more difficult to build long-term customer loyalty. If a purchase experience is so-so, the consumer is more likely to consider exploring other options in the future. But, by offering a variety of return methods and reducing post-purchase pain points, customers can have an experience that can increase brand affinity and the chances they’ll return to purchase again.”
The partnership is designed to bolster that customer experience. Returns can feel like a behind-the-scenes process. They happen post-purchase, and involve logistics. In fact, the process behind returns is grouped under the lesser-known category of reverse logistics. But it's still an area where a shopper interacts with a brand. That means there is opportunity to provide value by offering ease and choice, and even gain the kind of satisfaction that will lead to a repeat purchase. Provide offerings that show you're on the side of the customer and the environment, and it's also a chance to communicate brand values.
“With Loop X Happy Returns, merchants will be able to reduce costs while increasing sustainability and retain more revenue while delighting their customers,” Schwartz said.
(Logo via Loop and Happy Returns)
As with any partnership, the Loop and Happy Returns collaboration holds potential benefits for both of the entities that are teaming up. For Loop, the ability to add an offline capability for returns was a big advantage.
Loop has always offered a variety of return options, such as drop-off at FedEx or UPS, pick-up at home. This allows it to offer more choice.
“Adding Happy Returns to the portfolio of great options increases the likelihood that we can offer the ‘right’ experience to a consumer and Shopify brand. In the post-COVID era of shopping, we hear a lot about crafting personalized experiences. The post-purchase aspect of the customer journey in ecommerce returns is no different,” said Schwartz. “Some customers may prefer in-person returns, while others may not. Everyone is different. But by offering customers as much choice as possible, we can ensure that we are covering all of our 'bases' as a returns provider and reducing potential points of friction.
Schwartz said nearly 62% of shoppers have stated that they are more likely to shop online if there’s an option to make a return at an in-person location.
“Because of that, it’s critical for us to support our merchants by offering shoppers this level of flexibility when they return goods,” said Schwartz.
For its part, Happy Returns' Return Bars look to streamline returns by offering a central location that allows it to group many individual returns together in a single shipment. PayPal took steps to grow Happy Returns earlier this year, making the service free for PayPal Checkout merchants and announcing an expansion to 5,000 locations, including 1,300 Ulta Beauty stores. For Happy Returns, Loop brings expertise in helping brands exchange a product, helping to keep purchase revenue in place even if an item is returned.
“So Happy Returns can expand its customer reach with our new partnership since they’re able to tap into brands who deeply value revenue-retention and have chosen Loop. That allows Happy Returns to increase foot traffic for its retail partners that offer Return Bar services at their brick-and-mortar locations,” Schwartz said.
It’s an example of how ecommerce can embrace a blend of digital and in-person experiences. Shoppers have shown they like the choice and convenience of shopping online, and built habits around ecommerce during the pandemic. But with more reopening activities, they are comfortable moving between physical and digital settings. This partnership is part of a broader vision aimed at making returns easier for shoppers. They’ll speak to customers to learn whether it's successful as they go.
“We have a long-term vision for this partnership, and our ultimate goal is to diminish friction points for the customer wherever possible,” said Schwartz. “Success will ultimately be determined by the feedback we receive from our merchants and their customers.”
On a global level, there are benefits for brands that are mindful of reducing their footprint. With an in-person return, an item doesn't have to be boxed up. That means less cardboard and plastic. At the same time, Happy Returns’ reusable totes are designed to reduce waste.
“This in-person return option benefits us all as it reduces packaging and individual shipments, helping to lessen our impact on the environment,” Schwartz said.
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On average, customers spend $59 more than the value of their gift card, Fiserv found.
In retail, sales are often measured in goods, whether they are purchased for ourselves or someone else. There are plenty of strategies that brands and retailers use to increase those sales, whether it is marketing, loyalty programs or how that item is presented.
In most cases, these are two different parts of the equation for retailers: The product that is bought and the strategies that lead to the purchase.
That’s what makes the gift card unique.
It is an item you can buy, with a section in the store all its own. Eventually, it leads to the purchase of other goods, so the gift card is leads to a direct sale. Yet it’s also a means to build a retail brand and create incentives that both introduce customers to a store and keep them coming back.
That’s a key takeaway from the 20th Annual U.S. Prepaid Consumer Insights Study from fintech and payments company Fiserv.
At this point, the gift card feels like a staple of the shopping experience. But it is only about 30 years old. In 1994, Blockbuster Video pioneered the sale of cards for gifted purchases directly as a means to combat fraud in paper gift certificates. Since then, they’ve proven to have a multitude of uses that stretch beyond the holidays.
Starbucks and Amazon gift cards are commonly distributed as prizes at team-building events and as pick-me-ups by friends showing they care. In 2022, 60% of consumers said they received a gift card from an employer, according to the Fiserv report. That was a big increase from 32% in 2019. People appreciate the gesture. The survey found that 85% of employees think that gift cards from an employer make for appropriate incentives.
For people looking to show generosity, gift cards can also be a means to stretch dollars. At a time of high inflation, people are looking for deals with their discretionary purchases. Gift card promotions that offer discounts and bonuses are proving particularly popular, the study found. Two-thirds of consumers said promotions can influence them to purchase more, while more than half of consumers took advantage of such an offer in 2022.
Yet the more difficult consumer environment is also having an impact on overall gift card sales. In 2022, the growth of gift card purchases slowed.
“Overall, 56% of U.S. consumers purchased more gift cards in 2022 compared to 2021,” said Tom Niedbalski, VP of gift solutions at Fiserv. “This was a decline from the 73% of consumers who said they bought more gift cards in 2021 than they did in 2020.”
Inflation and less discretionary income were the driving factors for consumers who said they bought fewer gift cards during 2022, as 35% of consumers said inflation was the reason they were purchasing fewer cards.
It's important for brands and retailers to understand why consumers buy gift cards. But it's just as crucial to understand where they can fit in retail strategy. Beyond sales, gift cards can help drive repeat customers, and extend a brand. These tools are particularly valuable at a time when retailers are focused on profitability in a tougher consumer environment.
Fiserv explained four areas in which gift cards are of particular value for brands.The following is directly quoted from Niedbalski:
Improving cash flow and revenue. Gift cards not only drive in-store and online traffic, there is an associated “lift,” or overspend, when a gift card is converted into a sale. On average, customers spend $59 more than the value of their gift card.
Repeat customers. Retailers use gift cards to foster loyalty and customer engagement, ultimately leading to repeat customers. One way we see this play out is through promotions associated with gift card sales. For example: a consumer who buys a $100 gift card for the holidays will receive a $20 bonus card that can be used after January 1 – creating a pre-holiday sale and post-holiday transaction in the New Year.
Branded currency. A gift card places a merchant’s brand directly into the consumer’s wallet, increasing brand awareness and ensuring the merchant’s brand is with the consumer when they are looking to buy.
Year-round marketing. The gift card has grown beyond the traditional holiday season. From birthdays and graduations to anniversaries and babies, gift cards are becoming the most popular way to recognize milestones – giving retailers opportunities to run additional promotions throughout the year.