RETURN RATES: Good news about returns Mar 1, 2000 12:00 PM
, Mark Del Franco
JobZone
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Improved packing and quality control pay off for a number of mailers
It looks like mailers had a double dose of good cheer from holiday '99. On
top of strong sales, most of the catalogers contacted at press time weren't
getting hammered with returns.
In fact, general merchandise mailer Spiegel, consumer electronics marketer
Crutchfield, apparel and home furnishings cataloger Knight's Ltd., and the
children's unit of multititle mailer Foster & Gallagher say that returns
are down this year from last year.
At the $65 million children's division of Foster & Gallagher, "we had fewer
returns than any year in the past five," says Sydney Klevatt, president of
the Peoria, IL-based cataloger's children's, e-commerce, and health
products groups. Klevatt says the return rate for the children's division
is less than 5%, below industry estimates for toy catalog returns of 5%-7%.
Foster & Gallagher's 95% in-stock rate throughout the season no doubt kept
its return rate low. So did its effort to ship goods within a day after the
order was placed. Observers say that if the time between when gifts are
ordered and when they are received is longer than the customers expect,
many shoppers will rush out to buy a backup gift in case the mail order
present doesn't arrive. Then once the mail order gift is delivered, they
often return it.
Apparel's a killer
In general, gifts are more likely to be returned than self-purchases, which
is why the post-holiday season is the returns crunch time for catalog
operations folks. According to operations consultant Curt Barry, president
of Richmond, VA-based F. Curtis Barry & Co., apparel boasts the highest
return rates - about 30%, compared to 2%-5% for general hard goods and
gifts, such as books and CDs - because of sizing problems and color
preferences. Even within the apparel category, returns vary, with fitted
fashion apparel return rates more than double those for casual apparel.
Nonetheless, a number of apparel mailers, such as $131 million Knight's
Ltd., are managing to reduce return rates. "Some of our apparel titles,
such as Knight's Ltd. and City Spirit, have seen a slight decrease in
returns the last year or two because we've made some operational
improvements," says Steve Kessler, vice president of operations at the St.
Louis-based mailer.
For instance, Kessler says, "we now have a woman on staff who acts as a
`spec technician,' checking incoming merchandise for the right dimensions
for each size." For the company, dresses have the highest return rates, at
about 30% and higher. Some separates, such as sweaters and blouses, can
also have return rates above 30%, while footwear returns are slightly
lower, ranging from 20%-25%.
Reducing returns
Thoroughly describing sizes and accurately depicting colors - two of the
most common reasons for apparel returns - in catalog creative may help
reduce returns. "Our return rates are down compared to last year," says
Spiegel spokeswoman Debbie Koopman. Though she won't reveal return rates,
Koopman says that the Downers Grove, IL-based mailer has taken several
steps to reduce returns, such as "presenting more detailed copy and sizing
information in the catalog. Because of that we saw a substantial
improvement with returns."
Kurt Goodwin, vice president of operations at Charlottesville, VA-based
Crutchfield, also attributes his company's lower returns this season in
part to its catalog creative. With its intensive editorial and
instructional copy, Crutchfield is "educating customers on our products
when they are ordering to make sure they get what they want," Goodwin says.
But "we also look at returns and examine why items are being returned,"
Goodwin says. For instance, if too many audio speakers that are
drop-shipped from the manufacturer are being returned due to damages,
"we'll go to our manufacturer and suggest that it should use a better
corrugated package, or add more foam or corners in the boxes, so that the
speakers don't get mashed in transit to the customer."
Goodwin says he also puts stringent controls on Crutchfield's own shipping
procedures - especially important given that many of its electronics
products are fragile or easily damaged. "We analyze our packages to make
sure our packaging is the best it can be. We want to make sure that the
goods we ship are packed with the right dunnage or the right corrugated,"
he says.
As a customer of United Parcel Service, Crutchfield takes advantage of
UPS's packing lab. This free service from the Atlanta-based carrier puts
packages through a battery of stress and drop tests to determine how sturdy
they are. "I don't think many catalogers take advantage of the packing lab,
but it should become part of their way of doing business," Goodwin says.
"It makes a huge difference to anybody who makes his living in the shipping
business."
