Posts tagged with "Brick-and-mortar"

Many happy returns: Retailers are ratcheting up the competition over fast, convenient delivery. Next up? Returns.

November 25, 2019

U.S. shoppers are starting to expect instant gratification. Buy something online and you’ll see it on your doorstep sooner rather than later. But when you want to return that item? Not so fast.

Now, The Chicago Tribune reports, a growing number of online retailers—from e-commerce giant Amazon to small apparel and footwear brands—are teaming up with brick-and-mortar chains to make returns less of a hassle; or at least no worse than the  transaction a customer would experience in a traditional store.

“If people can’t see it or touch it (when they first buy it), they want the option to return it,” Scott Rankin, principal at KPMG BrandVoice in the retail sector, told the Tribune. “Sometimes, they want to do it in a physical store because it’s just easier.”

The trend already is in evidence: Since early 2019, customers have been able to return many items bought on Amazon at any Kohl’s store. And delivery companies UPS and FedEx are partnering with chains like CVS and Walgreens to give shoppers more places to pick up and drop off packages.

Even some smaller online brands now offer in-store returns through Happy Returns, a California-based company that lets shoppers return items from more than 300 digital brands at more than 700 locations nationwide, mostly in malls and in cooperation with national chains like Paper Source and CostPlus World Market.

The Happy Returns service enables companies such as Revole, a women’s apparel brand, and Rothy’s , a footwear brand, to tout easy returns on their websites, The Chicago Tribune reports.

In-person returns with Happy Returns, Revolve’s website says, require “No receipt, return label or shipping box necessary! You just provide your email address or order number and your refund will be initiated immediately.”

In-person returns generally mean quicker refunds, which seems to be the biggest attraction for shoppers, Happy Returns co-founder and CEO David Sobie told the news outlet. But customers also like being able to skip the “arts and crafts project” of prepping items for shipment, he said. Happy Returns gives customers refunds on the spot— no box required.

For stores accepting other brands’ returns, it can be a way to get new customers in the door. Online retailers, meanwhile, know hassle-free returns can make customers more confident about clicking “buy.”

With the holidays fast approaching, in-store returns programs are about to undergo a major test, the Tribune says. U.S. consumers are expected to spend nearly $144 billion online this holiday season, up 14.1% from last year, according to Adobe Analytics.

And those same consumers will be sending millions of unwanted items right back.

In fact, UPS told the Tribune that it expects to handle a record-breaking number of returns this holiday season, with more than 1 million return packages expected to be shipped each day in December, peaking at an estimated 1.9 million packages on January 2.

As for the retail partnership, when they are fully rolled out, both UPS and FedEx said 90% of the U.S. population will live within five miles of a location where they can pick up or drop off a package.

Most of the packages people drop off are returns, and they generally choose the location that’s closest or has the most convenient hours, Scott Harkins, FedEx’s SVP of Customer Experience Marketing told the news out.

“Really, it just comes down to convenience,” Harkins said.

Research contact: lzumbach@chicagotribune.com

SCOTUS rules states can tax Internet sales

June 22, 2018

Shares of Amazon and other online retailers fell on June 21, after the U.S. Supreme Court ruled that individual states may require them to collect sales taxes, Business Insider reported.

The news outlet detailed that shares of the following Internet retailers were in free fall Thursday morning :

The high court’s decision in the case of South Dakota vs. Wayfair (Docket No. 17-494) overturned a 1992 ruling that limited tax collection by retailers for online sales—regardless of the state in which a shopper lives or if the company has a physical presence in that state.

The findings support a 2016 bill passed in South Dakota “to provide for the collection of sales taxes from certain remote sellers.” The legislation requires any seller “that does not have a physical presence in the state” to collect and remit sales tax if, during the previous or current calendar year:

  1. The seller’s gross revenue from the sales of tangible personal property, any products transferred electronically, or services delivered into South Dakota exceed $100,000; or
  2. The seller sold tangible personal property, any product transferred electronically, or services for delivery into South Dakota in 200 or more separate transactions.

Only five states do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska and Montana allow individual individual cities to collect local sales taxes, according to the Tax Foundation.

Wayfair had argued in its brief that, if the 1992 ruling were overturned, “the burdens will fall primarily on small- and medium-size [online] companies whose access to a national market will be stifled.”

However, Business Insider reports, the ruling is widely seen as a victory for another part of the retail sector: brick-and-mortar stores, which previously said that online retailers’ ability to skirt sales tax collection gave them an advantage.

States also had argued against the previous statute, saying that it reduced their potential revenue from sales taxes as more consumers turn to digital shopping options.

What’s more, President Donald Trump had criticized Amazon, whose founder Jeff Bezos also owns The Washington Post, claiming that it does not collect any sales tax. The company maintains that it has been collecting tax in all 45 states that require it.

Wayfair, itself commented on the decision on June 21, saying “We welcome the additional clarity provided by the Court’s decision today. Wayfair already collects and remits sales tax on approximately 80% of our orders in the United States, a number that continues to grow as we expand our logistics footprint. As a result, we do not expect today’s decision to have any noticeable impact on our business, as it may on other retailers who do not currently collect and remit sales tax.

“Wayfair has long supported a legislative solution that would establish a level playing field for brick-and-mortar and online retailers by permitting states to collect sales tax on online sales. While we believe the Court was not the ideal venue for creating this level playing field, we expect that today’s decision will bring clarity and certainty to this issue.”

Research contact: @g_rapier