Source: staples.com
Staples to accept returns from other stores
Staples in January will begin accepting returns from a few other retailers at more than 1,000 U.S. stores to become the latest chain to turn their stores into drop-off points.
The service is a result of a partnership with Optoro, which manages returns for Best Buy, Target, Bed Bath & Beyond, IKEA, American Eagle, B.J.’s and Under Armour as well as Staples and hundreds of smaller online sites. Staples will be the first retailer to accept returns through a new program, Express Returns.
Under the program, consumers looking to return a product purchased from a retailer using the Optoro platform may find an option to make the return at a nearby Staples. A QR code is sent to their mobile phone to be scanned by a Staples associate. The code enables the shopper to skip the line for a quick refund while supporting a contactless experience for store associates. There is no need for the customer to print a label or package the return.
Return drop-off services have slowly rolled out in recent years.
Happy Returns, which handles returns for a number of online stores, has Happy Return Bars set up in more than 500 U.S locations, including Paper Source, Cost Plus World Market, buybuyBaby and Bed Bath & Beyond.
Narvar, which helps manage returns for Urban Outfitters, Levi’s and others, last year introduced drop-off points at more than 8,000 Walgreens U.S. locations and select Nordstrom stores.
However, Kohl’s, which began accepting Amazon returns at all its stores in June 2019 after a pilot that began in 2017, appears to be the only retailer aggressively promoting the service as a convenience to consumers on its website.
Holiday returns are expected to reach another record as accelerated e-commerce growth is forecast to continue due to the pandemic and return rates are found to be three to five times higher for online purchases than store-bought ones. Beyond convenience for shoppers, returns specialists tout their services as cost-effective and eco-friendly solutions for retailers.
- Optoro Announces Nationwide Contactless Returns Network Featuring New Partnership with Staples US Retail – Optoro/Globe Newswire
- Staples To Pilot A Drop-Off Program For Easier E-Commerce Returns – Forbes
- Staples Welcomes Returns from Other Retailers – Ecommercebytes
- Happy Returns Takes Back Your Returns – Forbes
- Happy Returns Enables Hassle-Free eCommerce Returns for Brands and Retailers Shipping with Ingram Micro Commerce & Lifecycle Services – Happy Returns/Business Wire
- Narvar and Walgreens Usher in New Era of Customer Experience, Bringing Shopping and Returns Closer to Consumers – Walgreens
- Kohl’s goes all-in on Amazon returns – RetailWire
- Has COVID-19 exacerbated online return challenges? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Does accepting in-store returns from purchases for other retailers make sense for Staples? Why has Kohl’s seemingly been the only retailer to fully embrace the opportunity for third-party in-store returns?
Poll
BrainTrust
Stephen Rector
Founder, President, Bakertown Consulting
Andrew Blatherwick
Chairman Emeritus, Relex Solutions
Accepting returns for other retailers is a way to drive traffic to your stores. It may bring retailers new customers that don’t typically shop at their brand. It is surprising that more retailers haven’t followed Kohl’s lead. The challenge will be to balance how much time it takes associates to handle returns from another chain when they could have been doing value added activities for Staples. There is definitely a cost associated with providing this service and the hope is that it will pay off in incremental store revenues.
Being a “returns location” inevitably helps to drive footfall to stores. However, while providing this service can generate some income in and of itself, the real challenge is in converting the additional customer traffic to buy products. Kohl’s has this problem: accepting Amazon returns has brought more people into shops, but it has not consistently resulted in elevated sales. All that said, I don’t think this is harmful and, in a sense, it is in keeping with Staples’ proposition as a store that offers a range of services to businesses and individuals.
The partnership with Kohl’s was a win-win. Amazon was less reliant on UPS for returns processing, and Kohl’s offered something that UPS/USPS cannot — a channel to sell Amazon products. For Kohl’s, it generates much needed foot traffic. And every customer who hands over a return receives a coupon day pass. I can see this making sense for Staples in much the same way. Accepting returns from other retailers is the new “accepting coupons for competitors.” If it generates in-store traffic, then it’s a win.
Anything that is customer-centric should be looked at as a positive. Offering this as a service does not hurt Staples’ value proposition to its customers.
Staples has been looking to expand beyond just an office supply and printing solutions organization for the past several years, and the partnership with Optoro appears to be the next step in their roadmap. Their Staples Connect format suffered the unfortunate timing of launching just as the COVID-19 outbreak hit the U.S., but it showed their commitment to be an overall solutions-oriented destination for businesses and individuals. Staples needs foot traffic for their physical store approach to make both sense and money, and with the large number of retailers which Optoro supports, this partnership should indeed drive consumers to their locations where they’ll hopefully make some home and home office purchases while processing their returns. Even though Kohl’s has been one of the larger retailer which has embraced this concept, I would not be surprised to see others join the fray, such as convenience locations that have already dipped their toes in pickup lockers or struggling mall tenants that may use this as a last gasp for foot traffic.
Traffic, traffic, traffic. ‘Nough said…
This is interesting. Most retailers negotiate some fashion of return allowances from their vendors to eliminate the cost of handling the reverse logistics for these items. But turning your store into the “return” desk for other retailers? I’m not sure this is such a great idea. There’s an assumption here that Staples will convert some transactions into sales.
I just don’t know that someone returning jeans from Target or a pair of headphones from Best Buy, would decide they needed office products. I’m not sure that it’s good for the brand either to be the one-stop shop for returns.
The important things Staples must do are as follows: Drive traffic through a store whose products can easily be purchased online, and make sure that the service of processing returns is a break-even proposition at worst. If processing other companies’ returns is going to cost Staples out of pocket, most likely it will not work.
I completely understand this at the initial “great idea!” level. I’m having a very difficult time understanding the mechanics and the math. It sounds like a lot of extra handling is involved. How does that get paid for? Even if the retailer accepting the return gets a little extra business out of the transaction, is the margin on that business capable of covering the incremental expense? If I can return my Bed, Bath & Beyond purchase at some other location, does that make me more or less loyal to Bed Bath & Beyond?
I agree Jeff. It all makes perfect sense, until you start to consider the real cost/benefit of acting as a returns depot for others. Not only is there a cost of processing the returns, but what about the lost opportunity cost of not serving actual Staples customers because staff are preoccupied with returns processing? No doubt this effort will increase store traffic, but more traffic has only nominal value unless it can be converted into a sale.
It makes sense because this program will bring more people to Staples who may not have visited otherwise. The Kohl’s deal works because there are no physical Amazon locations to return goods. There are, however, likely to be nearby Target stores, Bed Bath & Beyond, American Eagle, etc. Why choose Staples over the actual retailer?
The issue is whether those people returning items at Staples will stop to shop while they are there. Perhaps a bounce back coupon or other enticement to bring them back to shop will help.
Anytime you can get someone into your store, for whatever reason, that is an opportunity to make another sale. It’s that simple!
This should drive more traffic to Staples stores, but the long-term benefit will require solid execution (making returns easy) and giving consumers a reason to go beyond just dropping something off.
One takeaway from the Store Operations Council meeting last week was reduced customer dwell time in stores. It is smart of Staples to give potential customers another reason to enter.
This is a very clever idea for Staples as it will drive traffic to their stores. It is then up to them to make sure they turn that traffic into business. Because Staples does not have a Christmas season peak, it makes perfect sense. They can handle returns when other retailers are at peak and they are at their quieter time. Their stores at Christmas are not heavily stocked so they have room to be able to handle the returned good. They are driving traffic to their stores when they traditionally would find it hard to do so giving them a new opportunity for business.
Great thinking offering customers service and convenience and the retailers all gain as well.
Do anything to get a potential shopper in the store.
Done properly, accepting returns for other retailers can be a positive for Staples. That means the process is easy for the consumer at home and in the store. Staples does not have control of the at home experience but is responsible for what happens at their store.
In the store, done right means having a separate area that is easy to find. The location should be staffed full time by employees who have been trained to handle the return process. Generally third-party returns locations are in or towards the rear of the store making customers walk by other products on the way. This setup should result in additional sales for Staples.
I agree with many of the other BrainTrust members who point to the customer-centric nature of this as good. However there is a longer term concern I have with regards to removing too much friction when it comes to returns.
It is my opinion that some level of commitment is necessary for healthy consumption behavior. If there is little risk from clicking a button at your home and being able to return any item around the corner, there is an environmental toll from shipping/restocking (especially on goods that might not have been purchased, or more thorough research would have been done prior to purchase).
I don’t feel like this Staples initiative is hitting that point yet, but it is just something that needs to be included in the equation moving forward.
While I agree that anything that drives traffic into a store is good, I’m still left wondering what the conversion rate is of the “returners” into buyers. Has anyone seen any statistics from, say, Kohl’s for their Amazon returns business?
This is a natural step in the evolution of retail customer service. It is good for the retailer who gets unexpected footfall and good for the customer. Win all around.
Being a returns location and leveraging store footprint that is already committed is fine, I think the key is who Optoro is processing returns for and whether those customers have upsell opportunities for Staples. Given that everyone is working from a home office these days, there may be a better chance that someone coming in for returns may pick up office supplies rather than a new t-shirt. Since there is already a Staples/Optoro business relationship, it isn’t a bad extension to try.
Staples and Kohl’s share a commonality. They are both big stores with lower foot traffic relative to their competitors. This is a good idea on behalf of both retailers to bring new consumers into their stores, and at the same get back on the radar of the shopping public.
The rules of the reverse logistics game have changed, and retailers such as Staples and Kohl’s have taken the wise and timely strategy to take third party in-store returns. What may have been viewed as a losing sum game, is actually a prudent approach to attracting additional foot traffic to your stores.
A key to success is the location of a dedicated returns area, that will strategically require the consumer to navigate through the store, and there will be the potential for some impulse shopping opportunities. In our digital-first world, the consumer is clearly in charge of their shopping journey. Moves such as this will incentivize the consumer to visit your store, and then the magic has a chance to happen.
Relying on platforms like Optoro makes this much more palatable for the retailer and adds a value-centric service for their customers. The result? More for traffic to the retailers’ stores, but that leaves the question of conversion. Kohl’s wants us to believe they’re achieving that, but their sales numbers make that difficult to accept.
In the end, if you want to convert a customer that enters your store with zero intent to purchase and only intended to return merchandise, then you need to have something in your store that they want/need or you won’t see that conversion. Those rules of retail haven’t changed! You can incentivize them at the returns counter with a discount or other incentive, but that only goes so far if the customer isn’t interested in the merchandise.
Still, this is a win for Staples customers and a potential win (in terms of sales uplift) for Staples itself, at a relatively low cost. The primary cost to Staples is in the time spent by store associates serving these customers that could have been spent serving customers intending to make a purchase.
I posit this is more of a win for Optoro, as it dramatically expands their footprint of returns-processing locations. The assumption of increased foot traffic translating into a meaningful sales lift for Staples will be more difficult to realize. The Staples retail environment isn’t particularly experiential and by and large, their merchandise offering can be purchased just about anywhere. Connecting the dots of an in-store return transaction then becoming a compulsive product purchase is a bit of a stretch.
While driving store traffic in this way has some benefits for both retailers and consumers who are seeking ease of returns, it ignores the primary challenge of returns, which is that they have become out of control for many retailers to manage and reduce.
Returns need to be viewed for what they are: A drain on retailers’ bottom lines as well as harmful to our planet. If we seek to build sustainable businesses and a sustainable environment, we need to optimize returns logistics by reducing returns overall.
This is certainly one way to boost foot traffic into a need-based retail store. Consumers rarely run to Staples the minute they have the need for stationary or office supplies but this added convenience may just stimulate impulse purchase or secondary trip missions. Not bad for the Staples Brand, especially during a time when convenience is such a luxury.
Processing in-store returns can be a drain on resources, space and quite frankly, employee energy. Given so many other basic priorities right now (like keeping shelves stocked), this opportunity could easily slip to the bottom of priorities outside of a retailers owns products. However, with concerted effort like we’ve seen at Kroger, Staples (and other retailers who see the upside) might be able to make returns a lucrative asset vs. liability.
As a UPS Access Point, CVS accepts returns for numerous online retailers and most stores are open until 10 PM. CVS has many thousands of locations that are very convenient to many consumers.
Staples: a chain that has been shrinking for years. Staples: a store that runs on skeleton crews. Staples: are they even open past 7 PM on weeknights?
Always great for consumers to have options, but this isn’t a great option.
Super example of an ecosystem in action. Benefit to customer and also driving traffic into store. There is more potential like this — a group of non-competing retailers getting together to enable pick-ups as well as returns from their respective stores, irrespective of which retailer made the online sale, could be interesting. It would expand the network of all of them.
Perfect way to leverage store footprint. A great tactic to drive traffic into the store and grow spend with existing customers while getting exposure to new customers. They will need to continually invest in the in-store experience and conversion efforts to see a real top-line effect.