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Success Story: How Azazie Reduced Returns While Cutting Carbon

Success Story is a Sourcing Journal feature highlighting innovative solutions across all areas of the apparel and footwear supply chain.

With 2022 going down the biggest wedding season in decades after many paused their plans during the pandemic, scores of women are hoping for a perfect fit as they try on dresses for the bride’s special day.

But that means there are plenty of opportunities for many brides, bridesmaids and wedding attendees to send back unwanted dresses and gowns—which also brings more potential concerns for logistics networks as a glut of new product re-enters the supply chain.

Observing these developments first-hand, Azazie, an online boutique selling wedding and special occasion dresses, implemented reverse logistics service Happy Returns in May to improve the returns experience and fortify its commitment to sustainability.

The retailer already had shown improvements to its return rate, which declined 2 percent since 2021. But in partnering with the PayPal-owned service, Azazie wanted to further streamline the return process by allowing customers to drop off their returned items without needing to print a label or first box up the items.

Thus far, the brand has improved returns processing efficiency rates 8 percent within its California warehouse, according to Jeff Cardoso, vice president, operations, Azazie.

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Cardoso attributes the efficiency boost to an uptick in bulk shipments, rather than having to open, scan and sift through individual boxes. Because Azazie only issues one prepaid return label or one prepaid return method (such as Happy Returns) per order, the company recommends returning all unwanted items at the same time.

Within 24 hours of returned items being scanned into the Happy Returns system, Azazie issues a refund so the customer doesn’t have to wait until the product is received at an intake facility.

In total, users can return Azazie products to one of more than 5,000 U.S. Return Bars before those returns are aggregated and shipped together to the company’s regional Return Hubs. At the hubs, returned products are sorted, labeled and palletized before being shipped back to the merchant.

“It also prevents an additional stop for our customers,” Cardoso told Sourcing Journal. “Instead of having to go to a FedEx drop off, which would typically be a normal return method, they can now go to a number of different places, oftentimes in malls where they might be doing additional shopping. Maybe it’s in a center where their groceries are at so they’re having to do one less trip as well. It’s just reducing the carbon footprint all around.”

With the service, Azazie also aims to curb its carbon footprint by reducing trucks and total shipments on the road. Happy Returns’ reusable boxes efficiently stack in trucks to take up less space so the brand can ship more items with fewer trips.

Reusable boxes replace wasteful cardboard packaging that often ends up in landfills.

“Every time we had returns in individual boxes, they’ve had to be shrink wrapped, put on the pallet and sent back,” Cardoso said. “Now, the dresses usually come back in their same poly bags that they were sent in, get boxed up in larger boxes and then shipped back to us for sorting. It saves time and carbon footprint content, but also manpower. It creates more efficiency within our warehouse, and it’s just a great partnership all around.”

Reducing carbon footprint is vital for Azazie’s sustainability ambitions, especially for a business that already aims to reduce the amount of product made by manufacturing made-to-order dresses. That’s why the company has partnered with the nonprofit Green Education Foundation helping to recycle and donate dresses that either don’t fit or are not in reasonable condition. The foundation donates these dresses largely in Central and South America, according to Cardoso, to help those that need a dress at a low cost.

“They recycle 100 percent of those dresses that don’t sell, and the materials from them are used in carpet pads, mattresses, pillow stuffing and products like that,” Cardoso said.

Going forward, Azazie foresees more logistics partnerships for its brand in the future as Happy Returns continues to scale its network. As the reverse logistics provider expands its scope and takes its business international, Cardoso hopes that Azazie can bring an elevated returns experience to consumers outside the U.S. in the future.

Supply chain diversification

Aside from its returns operation, the occasion dress brand is bolstering the supply chain via diversification, expanding production to countries like Vietnam and Cambodia. The company previously only worked with independent garment factories in China, but the recent supply chain constraints made the brand reconsider its one-country sourcing strategy.

“It’s helping us to ensure delivery of dresses in a timely manner,” said Cardoso.