Not Many Returns Mar 1, 2001 12:00 PM
, Paul Miller
JobZone
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After a decent holiday season, most catalogers say that their
post-holiday return rates are the same as or slightly below the
previous year's. But not every cataloger knows why.
New York-based women's apparel cataloger Newport News, for one,
is pleased to report that its return rate was the lowest it had
been for several years. President/CEO George Ittner adds that the
cataloger's return rate is below the industry average for apparel
(which is upward of 20%), and we've had a trend of decreasing
returns in recent years. But when asked for the secret of the
company's success, he says, I can't point to one thing as to
why.
Taking charge
On the other hand, Bavarian-themed gifts cataloger Tyrol
International knows why it's receiving fewer returns. The
Cleveland, GA-based company cut its holiday return rate to 3.5%
from the previous year's 4%. A major reason, says vice president of
sales Beverly Autry, was a notable decline in goods that were
damaged during delivery.
At the beginning of last year, we started shipping more orders
through the U.S. Postal Service's Priority Mail and first class
mail categories than through United Parcel Service, Autry says. We
feel there's less breakage that way; that our products are handled
a little better. The difference was most notable with Tyrol's line
of cuckoo clocks. We had no problems this time with the clocks
arriving in customers' homes broken or damaged in any way, Autry
says.
Another gifts cataloger, Portland, OR-based Good Catalog Co.,
managed to reduce returns by an even greater percent. Our returns
have been quite a bit better than we expected about 7% overall, as
opposed to 10%-11%, which is our usual holiday range, says vice
president of operations Bill McMahon. Although the co-op catalog
company drop-ships most of its orders through its merchandise
vendors, it still facilitates and administers order-taking and
returns.
McMahon attributes much of the decrease to a better performance
from the new third-party fulfillment company Good Catalog used
during holiday 2000. He also believes that Good Catalog order reps
did a better job of giving customers more realistic expectations on
shipping times prior to Christmas, so that customers did not order
products they couldn't receive in time for the holiday, only to
return them.
Ripple-down merchandise effect
Sam Young, senior vice president of outdoor and military gear
mailer U.S. Cavalry, credits a change in merchandising with its
improved return rate. Young says the number of post-holiday returns
dropped 1.25% from the previous year because we took a more
cautionary approach to the products we offered.
The Radcliff, KY-based cataloger/retailer stayed away from
products with high return rates, such as remote-control airplanes.
Instead, U.S. Cavalry focused more on products such as boots and
leather jackets, top-selling items that have lower return
rates.
Of course, a shift in merchandise mix can just as easily
increase return rates. Apparel, home goods, and gifts cataloger
Faith Mountain Co. had braced itself for greater returns this year.
In 2000 the Sperryville, VA-based mailer began carrying more
apparel, which has higher returns than hard goods. But vice
president of operations Jim Eastham says the company's return rate
dropped one percentage point. In terms of dollar amount returned,
however, the rate actually rose one percentage point, reflecting an
increase in average price point and a 4% boost in average order
size.
In just its second full year in existence, the Macys.com
(formerly Macy's by Mail) catalog suffered a 10%-15% climb in
return rates, says vice president of marketing Gary Ostrager.
Macy's home books yielded a 10%-12% return rate, Ostrager says,
compared to the apparel catalogs, which drew a 20%-24% return
rate.
The holiday general merchandise books had an 18%-22% return
rate. We put more apparel in our holiday books than we did last
year because our customers wanted more unique high-fashion apparel,
Ostrager says.
Ostrager notes that although Macy's return rate increased over
holiday '99, the actual count of returns may not have been as high
as his numbers show. He says that because Macy's treats each
exchange as a separate return followed by a new sale, some returns
were actually exchanges. Macy's could not provide specific exchange
figures.
Macy's tried to reduce returns by having its order-takers
converse more fully with customers. We tried to give customers a
better understanding of our products, in terms of sizing, fit, and
colors, Ostrager says.
Industry return rates
Industry return rates vary depending on product category and
subcategories within. For instance, fulfillment consultant Curt
Barry, president of Richmond, VA-based F. Curtis Barry &
Associates, says catalog return rates on casual apparel range from
10%-20%. But while return rates for shoes are 10%-25%, and fitted
apparel return rates run 20%-30%, high-fashion returns can run more
than 40%. On the other hand, the hard good and gifts categories
have an average return rate of 5%-9%, and home decor's rate is
5%-10%. Business-to-business returns are the lowest, at 1%-5%.
As for Barry's take on holiday 2000 returns: I'm not hearing
anything different than any other year.
Who are the industry's stars of tomorrow? For an upcoming
article on cataloging leaders of the past, present, and future, we
need your input. Fax your picks to 203-358-5823, or e-mail them to
ellen_hansen@intertec.com.
Deadline is March 30.
