3 Must-Haves for a Successful Try-Before-You-Buy Policy

Jan 29, 2014 10:12 AM  By

warehouse_300Retailers like Warby Parker and Bungalow Clothing are paving the way for a more customer-centric  ecommerce shopping experience by offering free at-home try-ons. Wildly popular among consumers, at-home try-on mitigates many of the uncertainties and anxieties around purchasing online, but poses significant logistic and fulfillment challenges for retailers.

At home try-on creates more shipments and returns, and in turn, higher costs and logistical complexities for retailers. It can be very challenging to launch these programs and at-home try-on can be a difficult model to sustain. Before offering try-before-you-buy, it’s important to understand the logistic and fulfillment implications associated with these types of policies.

Retailers must meet three key criteria to be successful at a free, at-home try-on policy:

High Margin Products: Free shipping and try-on policies can become very costly for retailers to maintain because they create a higher volume of shipments and returns, especially if customers are returning most or all of their products without making a significant purchase.

Free try-on policies work best for retailers like Warby Parker who have light weight and high margin products. Lighter weight products are less expensive to ship back-and-forth and retailers can make up lost revenue from shipping costs with higher margin product sales.

Strong Understanding of the Customer: Retailers need to really know their customers to make free try-on policies work and realize a solid return on investment from these programs. The key to a successful try-on policy is getting customers to purchase a large portion of the products they order to try on. Otherwise, retailers will lose profits to shipping and return costs and experience a high product churn rate.

In addition to leveraging big data and past purchasing behavior, personal style sheets and shopper profiles are great ways for retailers to learn more about their shoppers’ style habits and preferences. It’s also important to consider your brand’s sizing guides compared with other brand and industry standards. If your clothes typically run small, it’s important to notify consumers before they make a try-on order to ensure they are receiving products that will likely fit, mitigating the need for returns.

Streamlined Return Process: From an operational standpoint, your returns process should be highly efficient and cost-effective since you’ll be processing a much larger volume of shipments and returns. You need to be able to process returns very quickly, bringing your products back to resale condition as soon as possible.

Retailers will need adequate technology and inventory tracking infrastructure on both the front- and back-end. This allows customers to see exactly what merchandise is available to try on at any given time, and enables retailers’ logistics and fulfillment providers to be aware, in advance, of returns coming in and shipments leaving the warehouse. Retailers should also specify the timeframe for when the product must be returned before the customer’s credit card is charged.

For ecommerce merchants, free shipping, returns and at-home try-on policies are very appealing to consumers and help increase competitiveness against traditional brick-and-mortar retailers, as well as ecommerce giants like Amazon and Zappos. However, these policies can be detrimental to retailers’ bottom-line if not implemented strategically and effectively. It’s critical for retailers to understand the implications of these policies and work hand-in-hand with their logistics and fulfillment provider to implement them in a way that enhances the existing customer experience without hurting profits.

Maria Haggerty is the CEO of Dotcom Distribution.