Holiday Return Rates Hold Steady for Most Mailers

After a highly unpredictable holiday season, the good news is that return rates were fairly predictable. Better still, while most catalogers say return rates stayed level with those of holiday 2000, some mailers had taken measures to reduce returns over the year, and those measures proved to be successful.

Among the catalogers contacted by Catalog Age, most, including Talbots, Cherry Tree Toys, Cottura, Paul Fredrick MenStyle, Potpourri Collections, and Long Elegant Legs, say that returns for holiday 2001 were flat with the previous year’s. Several marketers, including Crate & Barrel, Delia’s, Levenger, and Alloy, actually reduced return rates. And just one cataloger, Think Big Direct (which includes the Rep Big & Tall, Casual Male, Repp Premier Big & Tall, and Milepost Four men’s apparel catalogs), reported an increase in returns.

More-selective shoppers?

Alpharetta, GA-based Think Big’s returns for the holiday season were 10%-15% higher than in 2000, says senior vice president of operations John Fitzgerald. The tough economy may have inspired consumers to be a little more selective in the merchandise they decided to keep, Fitzgerald says. “People will return merchandise quicker for reasons they wouldn’t have returned it before.”

The cataloger sells mostly specialty-size men’s fashions, with brands such as Tommy Hilfiger, Nautica, and Polo. “Historically, there’s not a lot of radical fashion [trends] that would affect our customers’ buying habits,” Fitzgerald says. Maybe in the past, customers would have bought three shirts and returned one, “but this time they are sending more back,” he contends. “It’s more to do with their pocketbook than anything else.”

Return rates at Long Elegant Legs, which sells specialty-size women’s apparel, held steady at about 20%. “Sure, we always hope that they will go down. But we sell apparel for tall women, so I think that we are just bound to have more returns because of the tougher fit,” says owner Ron Kordalski.

To reduce returns, this year the Belle Mead, NJ-based cataloger has standardized fit among its merchandise vendors. “That should have a positive effect on our return rate,” Kordalski says, “but we understand that there will be a learning curve attached, so we might not see it right away.”

There’s no question that return rates are a nightmare for apparel catalogers. By most industry experts, catalog return rates for gifts and hard goods range from 5% to 10%. In comparison, return rates for casual clothing catalogers range from 10% to 20%, shoe returns range from 10% to 25%, fitted- or tailored-apparel returns range from 20% to 30%, and high-fashion clothing returns can exceed 40%.

Fitting improvements

But at least two apparel mailers, teen clothing marketers Delia’s and Alloy, managed to reduce returns. New York-based Alloy typically has a return rate of 11.5% — low for apparel mailers. But last year the company reduced that rate to 10%, says chief operating officer Jim Johnson.

“We analyzed vendors with historically high return rates and worked with them to improve the problem areas,” Johnson explains. For instance, Alloy worked to improve product quality and fit. “We had improved size scaling and more quality assurance up front to ensure that we reduced returns. We work with many different vendors with different size scales, and we worked with those off the sizing curves to correct that over the past year.”

Fit had been the primary reason for most of Alloy’s returns in the past, with product color and fabric the secondary reasons. “Most of the decrease is in returns signifying fit as the problem,” Johnson says.

For New York-based Delia’s, “returns for the full year were down vs. the previous year, with back-to-school and fall showing a greater drop from the previous year,” says chief operating officer Evan Guillemin. In addition to working closely with merchandise suppliers, “we have worked to communicate the fit and feel of our products more clearly to customers on the Web and in the catalog,” he says.

For instance, Delia’s is devoting much more product copy to detailed descriptions and information. And during the past year, “we have made significant hires in product design and sourcing,” Guillemin adds. “We have pushed our vendors to hit tougher quality and fit standards” and are giving suppliers more direction. “We think those changes, coupled with a more fashion-forward assortment, position us to continue to improve return rates and customer satisfaction next year.”

It wasn’t just the apparel mailers that managed to decrease returns. “Our return rate as a percent of sales is down 5%, from just over 10% last year to just under 10% this year,” says Larry Jenkins, senior vice president/chief financial officer for Delray Beach, FL-based “reading tools” cataloger Levenger. “Early last year we tightened our return policies from lifetime guarantee to ‘we will make it good.’”

Whereas Levenger used to take back products for any reason, now the cataloger has some restrictions. With personalized items, for instance, “we now only allow them to return if it was damaged or our fault,” Jenkins says.

Additionally, Levenger did some modest discounting during the fourth quarter; with a better perceived value for the products, customers were perhaps more willing to hold onto them. “We find that the higher the price point, the higher the expectation level and therefore the more likely it is to be returned,” Jenkins says.

Steady as they go

But for the most part, mailers contacted found that return rates held steady compared with last year. Medfield, MA-based multititle gifts cataloger Potpourri Collection’s overall returns remained at 5%, says president Jack Rosenfeld. In addition to its flagship title, the company’s catalogs include Expressions, The Stitchery, Back in the Saddle, and In the Company of Dogs.

Los Angeles-based imported ceramics cataloger Cottura has managed to keep its return rate at about 1%, says president/co-owner Jim Zimmerman. “We try to photograph our merchandise as realistically as possible so that customers see what they’ll get.” Cottura’s phone reps also point out differences in paint color or finishes so that customers don’t get any surprises. When buyers do return products, they typically request exchanges for another style or pattern rather than a refund, he adds.

And while at press time catalogers contacted had another week or two left in the typical holiday returns cycle, few were expecting major changes in return levels. “Our final numbers are not yet in, but I can tell you it’s pretty much a dead heat with last year,” says Randy Scalise, vice president, merchandise handling at $575 million Warren, PA-based Blair Corp., which mails the Crossing Pointe, Womenswear, and Menswear catalogs.

Indeed, “we’ve seen no difference in the level of returns we’ve gotten for holiday 2001,” says Arnold Zetcher, president/CEO of Hingham, MA-based women’s apparel cataloger/retailer Talbots. “I would have thought that because of the instability of jobs, maybe we’d see a higher return rate.”

Partner Content

3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Build the Foundation for Great Customer Experiences - NetSuite
Understand how consistent, timely, relevant and personalized experiences are enabled by having the right technology foundation in place.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.