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Why Brick-and-Mortar Stores Could be the Key to Greater Online Sales

When it comes to their e-commerce businesses, retailers are leaving money on the table.

Even as online sales increase year over year, stores have been slow to ease the friction from one part of the customer journey: returns.

Reverse logistics company Happy Returns found poor returns policies and processes are costing sales and loyalty. The company recently polled 1,800 consumers to gauge their attitudes and experiences around getting rid of unwanted purchases—and to determine how stores can position themselves to compete with Amazon.

While 45 percent of online shoppers say their favorite part of the customer journey is opening packages when they arrive, 73 percent report that joy evaporates somewhere along the returns process, making it their least favorite part.

Closing that gap is of the utmost importance for retailers looking to gain and retain shoppers, according to David Sobie, CEO and co-founder of Happy Returns  “There are few, if any, other initiatives that online retailers can undertake to make more than 80 percent of their customers more likely to shop,” he said.

More than a quarter (28 percent) say they’d shop online more if it weren’t for having to return unwanted goods via the mail. Though some retailers include a return label with the product, not all do, and that creates a logistics issue for consumers. The survey found that only 38 percent of shoppers have access to a printer at home and at work. It found that 26 percent only have one at home and 21 percent only have one at work, making the returns process challenging.

When asked to describe what their ideal return scenario would include, 77 percent said make it free. Immediate refunds and the ability to return the items to a store were on the list for 42 percent and 38 percent respectively, while 37 percent want to get their money back without having to show a receipt.

This penchant for returning in store has prompted retailers—both online and brick-and-mortar—to rethink their processes.

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“Returns are an overlooked and underappreciated yet critical component of the online shopping experience,” said report author, Sucharita Mulpuru, lead retail analyst at Forrester Research. “Recent announcements from Amazon, Kohl’s and Walmart show that leading retailers are finally addressing returns.”

For it’s part, Walmart is fulfilling two wishes from shoppers’ lists with its Mobile Express Returns, which provides a separate line for returns at the customer service counter. While there, all shoppers have to do is scan the QR code provided in their store app, hand over the goods and they’re done. Though consumers currently recoup their funds by the next day, in December, refunds will happen as soon as shoppers start the returns process in the app.

[Read more about what Walmart is doing: Walmart’s Latest Tech Will Help Eliminate Out-of-Stocks]

Meanwhile, Amazon is expanding its in-person returns capabilities with lockers in some Whole Foods locations and through a partnership with Kohl’s. The online retailer now accepts returns at 82 Kohl’s locations. The process is designed to be simple with dedicated Amazon return stations as well as parking spots reserved specifically for those shoppers.

Though the idea might solve some pain points for shoppers in theory, Chuck Grom a Gordon Haskett analyst told Bloomberg the concept needs work in practice. First, he said, the return areas aren’t clearly marked, raising the question of whether shoppers will become acquainted with the service. And second, because consumers can only return products sold by Amazon, and not those goods shoppers may have purchased from marketplace sellers, the service is limited—and confusing.

Ultimately, Happy Returns reasons that offering hassle-free in-store returns could be one way for retailers to edge out Amazon. When asked where they’d shop for apparel if all things were equal—price, free shipping, and the like—49 percent of consumers said they’d pick the site that allowed them to make in-store returns and get immediate refunds over Amazon. Of the 46 percent who selected the online behemoth, most did so because they have Prime memberships.