Loss Prevention Research Council Weekly Series - Episode 104 - Zara Charges for Returns, Amazon's 1st apparel store, Walmart Launches Drones
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
Zara’s Move may Suggest Free Returns May Become Rare
https://www.forbes.com/sites/retailwire/2022/05/24/zaras-move-suggests-free-returns-may-become-rare/?sh=2088a1885525
Thank you Tom. Great updates from both you and Read. This week I am traveling through Europe, so let me start with some updates from there.
First interesting news from Zara which is part of Inditex, a chain of nearly 7000 apparel stores based in Spain. This update is from Forbes.
Zara in the UK has started charging a fee of £1.95 ($2.39) to return merchandise bought online. The fast-fashion retailer reportedly instituted the charge for environmental reasons.
Zara deducts the refund charge from the refund. Customers buying items online can still return them for free in stores. Mailed returns in the U.S. are still free for 30-days post purchase.
Consumers’ expectations around free returns may be somewhat lowered these days due their environmental sympathies. A recent study from Cycleon found almost two-thirds (64 percent) of U.S. consumers willing to pay extra when returning a parcel to subsidize greener carrier options.
In an online discussion last week, some of the experts on the RetailWire BrainTrust said return fees are likely to become more common among retailers, although the rationalizations may differ.
Online returns are rising and are seen as a margin killer for online selling. A recent Pitney Bowes survey of U.S. online retailers found returns cost retailers an average of 21 percent of their order value. The National Retail Federation (NRF) found that 20.8 percent of goods bought online were returned in 2021, up from 18.1 percent in 2020.
The article points out that Zara risks disappointing customers who gain confidence in making an online purchase when they see free shipping and returns. Power Reviews’ 2021 returns study found consumers indicating free shipping (96 percent) and free returns (76 percent) as important considerations when shopping online.
Lidl Reaches 100 billion euros in sales
https://www.retaildetail.eu/news/food/lidl-breaks-through-the-100-billion-euro-sales-barrier/
Switching Topics again interesting news this week from Europe in that Lidl which is part of the Schwartz Group reached 100 billion euros in sales.
This news is from the Retail Detail EU website and it’s interesting in that they are already a top 10 global retailer in revenue and points to the continued growth of the low-cost grocery model.
Congratulations and it is a great milestone for Lidl: The retailer has increased its sales by 4.7 % to 100.8 billion euros in the 2021-2022 financial year, according to figures published by parent company Schwarz Gruppe. The increase in turnover is partly due to the opening of 300 new stores.
Incidentally 100.8 Euros is roughly 108 billion in US dollars.
Aldi is the other retailer in the low cost grocery model that is also now a top ten global retailer.
Amazon opens first physical apparel store
https://www.reuters.com/markets/us/amazon-opens-first-physical-fashion-retail-store-2022-05-25/
Going back to USA, news from Reuters that Amazon has opened it’s first physical apparel retail store.
The store, Amazon Style, located in Los Angeles, will use machine-learning technology to help customers find clothes and personalize recommendations.
Customers shopping on the Amazon app will also have the option to try out their selections at the physical store, and will be notified on the fitting room's availability.
Drones to deliver to 4 million households for Walmart
https://www.retaildetail.eu/news/general/drones-deliver-to-4-million-households-for-walmart/
From the Retail Detail EU website, again some interesting technology news in USA this week.
Walmart is set to be the first major retailer to use drones for deliveries. The superstore chain says that by the end of this year, some four million American households will be able to receive parcels from the air. The households in question are spread across six different states: in parts of Arizona, Arkansas, Florida, Texas, Utah and Virginia, customers could receive more than a million parcels a year by drone, The Guardian reports.
Initially, the orders will be small, with a maximum weight of 10 pounds (4.5 kg). During earlier tests, the drones mainly delivered household items and corona self tests, but Walmart sees a lot more possibilities. The potential range covers up to 100,000 different products in numerous categories, from snacks to batteries and detergent. The chain itself finds it telling that in one location, instant pasta meals were the most frequently delivered product. “If it fits safely, it flies,” Walmart reasons.
The drones are remotely controlled by operators from partner DroneUp and will land in customers’ driveways or front yards. Walmart says it will charge a delivery fee of 3.99 dollars per delivery. It would be the first large-scale drone delivery programme in the US, although the retailer is not yet addressing many of the practical questions that arise.
I actually witnessed the DroneUp technology at the NRF Big Show in January and it made it to one of my 11 trends for the trade event. Will be interesting to watch the future of drones in retail stores.
Again LPRC is the place to test many of your technology ideas for both green and red shoppers.
Good evening from Europe and over to you Read.
