Try this on for size
Online retail is continuing to take the world by storm, with more than half of the growth in Australian retail from 2017-18 coming from online sales.1 An emerging trend helping to drive growth in the online fashion industry is the “try before you buy” (TBYB) initiative. Fashion brand ASOS was one of the first companies to implement the program in November 2017, allowing their customers to order multiple items before deciding what they would like to keep, with no upfront cost. Shoppers are only charged for anything they decide to keep after 30 days. In the UK, this increased ASOS’s sales by 23%.2
Why is TBYB appealing for consumers?
Having TBYB as an option for consumers serves to mitigate typical online shopping concerns like inconsistent sizing and poorer-than-expected product quality. A TBYB system is attractive in its ability to replicate the reassurance gained from an in-store shopping experience, being able to physically touch and try on a product before committing to a purchase, while still retaining the convenience of the online marketplace. By removing a barrier to purchase for consumers, online retailers are likely to see increased sales, explaining why 25% of retailers are planning to implement TBYB policies online by 2019.3 However, retailers working to take on such initiatives need to be aware of the challenges involved.
What are the challenges for retailers?
With the security of free returns, consumers will make more purchases, but correspondingly increase their number of returns, at an average of an additional four items a month.4 Considering the costs of handling, shipping, administration, and repacking, the increased expenditure that results from a TBYB program may outweigh the benefit from increased sales. Processing returns is a complex process, on average a returned purchase passes through seven people before being listed for resale. Despite this, 69% of retailers are not deploying any technology based solutions to increase efficiency and manage the costs of this process.3 Retailers who seek to implement TBYB into their operations must be fully prepared to optimise their returns process to make the change profitable.
Who else uses TBYB?
Apart from ASOS, online giant Amazon has also implemented a TBYB program. In 2018, the retailer launched “Amazon Prime Wardrobe” where customers can select from a range of clothing to be delivered, and only billed for the items they choose to keep after a 7 day period. To streamline the process, the clothing deliveries come with a resealable box and prepaid return label. With a retailer as large as Amazon involved, TBYB has tentatively entered the mainstream, making it imperative for other retailers to turn their thoughts to considering its potential for their business.