After a decent holiday season, most catalogers say that their post-holiday return rates are the same as or slightly below the previous year’s. But not every cataloger knows why.
New York-based women’s apparel cataloger Newport News, for one, is pleased to report that its return rate was the lowest it had been for several years. President/CEO George Ittner adds that the cataloger’s return rate is below the industry average for apparel (which is upward of 20%), and we’ve had a trend of decreasing returns in recent years. But when asked for the secret of the company’s success, he says, I can’t point to one thing as to why.
On the other hand, Bavarian-themed gifts cataloger Tyrol International knows why it’s receiving fewer returns. The Cleveland, GA-based company cut its holiday return rate to 3.5% from the previous year’s 4%. A major reason, says vice president of sales Beverly Autry, was a notable decline in goods that were damaged during delivery.
At the beginning of last year, we started shipping more orders through the U.S. Postal Service’s Priority Mail and first class mail categories than through United Parcel Service, Autry says. We feel there’s less breakage that way; that our products are handled a little better. The difference was most notable with Tyrol’s line of cuckoo clocks. We had no problems this time with the clocks arriving in customers’ homes broken or damaged in any way, Autry says.
Another gifts cataloger, Portland, OR-based Good Catalog Co., managed to reduce returns by an even greater percent. Our returns have been quite a bit better than we expected about 7% overall, as opposed to 10%-11%, which is our usual holiday range, says vice president of operations Bill McMahon. Although the co-op catalog company drop-ships most of its orders through its merchandise vendors, it still facilitates and administers order-taking and returns.
McMahon attributes much of the decrease to a better performance from the new third-party fulfillment company Good Catalog used during holiday 2000. He also believes that Good Catalog order reps did a better job of giving customers more realistic expectations on shipping times prior to Christmas, so that customers did not order products they couldn’t receive in time for the holiday, only to return them.
Ripple-down merchandise effect
Sam Young, senior vice president of outdoor and military gear mailer U.S. Cavalry, credits a change in merchandising with its improved return rate. Young says the number of post-holiday returns dropped 1.25% from the previous year because we took a more cautionary approach to the products we offered.
The Radcliff, KY-based cataloger/retailer stayed away from products with high return rates, such as remote-control airplanes. Instead, U.S. Cavalry focused more on products such as boots and leather jackets, top-selling items that have lower return rates.
Of course, a shift in merchandise mix can just as easily increase return rates. Apparel, home goods, and gifts cataloger Faith Mountain Co. had braced itself for greater returns this year. In 2000 the Sperryville, VA-based mailer began carrying more apparel, which has higher returns than hard goods. But vice president of operations Jim Eastham says the company’s return rate dropped one percentage point. In terms of dollar amount returned, however, the rate actually rose one percentage point, reflecting an increase in average price point and a 4% boost in average order size.
In just its second full year in existence, the Macys.com (formerly Macy’s by Mail) catalog suffered a 10%-15% climb in return rates, says vice president of marketing Gary Ostrager. Macy’s home books yielded a 10%-12% return rate, Ostrager says, compared to the apparel catalogs, which drew a 20%-24% return rate.
The holiday general merchandise books had an 18%-22% return rate. We put more apparel in our holiday books than we did last year because our customers wanted more unique high-fashion apparel, Ostrager says.
Ostrager notes that although Macy’s return rate increased over holiday ’99, the actual count of returns may not have been as high as his numbers show. He says that because Macy’s treats each exchange as a separate return followed by a new sale, some returns were actually exchanges. Macy’s could not provide specific exchange figures.
Macy’s tried to reduce returns by having its order-takers converse more fully with customers. We tried to give customers a better understanding of our products, in terms of sizing, fit, and colors, Ostrager says.
Industry return rates
Industry return rates vary depending on product category and subcategories within. For instance, fulfillment consultant Curt Barry, president of Richmond, VA-based F. Curtis Barry & Associates, says catalog return rates on casual apparel range from 10%-20%. But while return rates for shoes are 10%-25%, and fitted apparel return rates run 20%-30%, high-fashion returns can run more than 40%. On the other hand, the hard good and gifts categories have an average return rate of 5%-9%, and home decor’s rate is 5%-10%. Business-to-business returns are the lowest, at 1%-5%.
As for Barry’s take on holiday 2000 returns: I’m not hearing anything different than any other year.
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