Expanding on the success of its return bars in shopping malls, Happy Returns is coming out with in-store kiosks where retailers can let customers do self-service returns, with a number of major chains kicking the tires as a possible launch partner.
The intent of the kiosks, in the demo stage, is to reduce the burden on store associates of processing returns and shipping or routing returned inventory.
Happy Returns co-founder and CEO David Sobie said he and partner Mark Geller realized the problem with in-store returns when working at HauteLook and later at Nordstrom Rack after it was acquired. The company has 300 returns bars in U.S. malls, with plans to expand that to over 1,000.
“We became aware of it again and again,” said Sobie, who is still seeking a developer partner to build the kiosks; a prototype was shown to retailers at ShopTalk 2019. “Nordstrom Rack loved the foot traffic, but the problem was inventory in the store. Now fast forward to today as we’re helping digitally native brands with our return bars, but omnichannel retailers started telling us they had versions of the same problem (as Nordstrom Rack).”
In conversations with dozens of retailers, Sobie said he and Geller heard time and again that they had a hard time juggling the workload of associates between handling returns and other important tasks. They also heard how returned items ordered online often weren’t offered in the stores, landing them in markdown displays.
“Often retailers sell a wide range of SKUs online, and a narrower one in stores,” Sobie said. “Online returns create a challenge when the inventory might not be sold in a store. It can get put in a corner with stuff they don’t carry, and it can start looking like a discount retailer, arranged by size instead of their usual careful merchandising.”
At the branded kiosk, shoppers can look up their orders on a touchscreen and select items either for return or exchange. Returned items are placed inside a bin in the kiosk, with the process taking less than a minute, and refunds and exchanges are initiated in real time.
Retail associates then empty the bin at the end of each day and receives a CSV file manifest from Happy Returns with all the items processed. They then go through reconciliation, flagging any potential problems and triaging products for back in stock or pickup for processing at a Happy Returns distribution center in either Van Nuys, CA or Blandon, PA. There items go through second-level validation and aggregation for bulk shipment.
“It took us three and a half years of learnings from the returns bars to understand shoppers and build our reverse logistics capacity,” Sobie said. “It was a bit of a prerequisite to bring this to market, offering a physical kiosk to rebalance inventory.”