Retailers across the country know that shoppers like free shipping and free returns. This is not new news. But listening to Jamie Nordstrom’s talk at SHOP.org last week made the light bulb turn on for me as to why.
What are some of the biggest determinants of why we buy a particular apparel product? Two items come to mind – price and fit. Of course there are other issues such as quality (implied in price), availability (implied in fit) and the ability to return an underperforming product (customer service). In thinking about this, I believed that consumers just liked free shipping and returns because they are free, thereby lowering the cost of ownership. But really, the reason that we like free shipping and free returns is fit.
When shopping online, we have no assurance that the product we purchased will fit right until we get it home and try it on. So free shipping and returns gets me a little closer to that showroom feel, and allows me to assess fit in a risk-free way. THAT’s why I like free shipping and returns. Without free shipping, I might not purchase a product because I did not want to invest in shipping and handling if the product didn’t work out for me. It becomes a calculated risk. So I like free shipping and returns because they lower my risk of laying out shipping fees for nothing in return.
On the other side of the coin, one would assume that retailers hate free shipping and free returns. It must be wildly expensive right? But I would venture to guess that when apparel retailers look at it – overall order volume increases when they institute free shipping and free returns. Why? Because buyers will make that risk-reward tradeoff more frequently if their risk of spending money for nothing is lower. There may still be quite a bit of churn and a significant budget line item for free shipping and returns, but this is still cheaper than the cost of a brick and mortar dressing room and all of the associated costs that go with it.
No matter how you look at it – fit is a complicated and vexing problem in online apparel retail. It is one that many retailers are looking to solve or at least improve upon in the future. So, the reality of free shipping and free returns is that fit isn’t free. It isn’t free for the consumer, nor is it or was it ever, free for the retailer.