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The try-before-you-buy trend spurring a returns tsunami, claims study

March 26, 2018

Retailers offering a try-before-you-buy strategy are experiencing a surge of intentional returns that may undermine profits, according to a new Brightpearl study.

Companies including Amazon and its new Prime Wardrobe, Stitch Fix, Warby Parker and Trunk Club have led the TBYB movement, which the study predicts will be adopted by 25 percent of retailers by 2019. However, the majority of retailers are not prepared for the surge of returns which could quadruple return costs, stated the study.

The study finds 69 percent of retailers are not deploying any tech solution to deal with return processing. The research also finds 85 percent of consumers expect free returns and that small to medium-sized retailers are most at risk when it comes to the return aspect of TBYB.

"For consumers, try-before-you-buy is a positive trend that removes another barrier to purchase. This will lead to an uplift in sales for retailers. However, it could spell disaster for business owners if they don't have the right framework and solutions in place to manage returns. Consumers will buy more, but they could return an extra four items a month on average, potentially prompting an unmanageable tsunami of returns for some merchants," Derek O'Carroll, CEO of Brightpearl, said in a release on the study.