As E-Commerce Looks for a Local Edge, In-Person Return Services Expand

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E-commerce outlets regularly beat out their brick-and-mortar counterparts across retail benchmarks like merchandise selection, price, and even checkout speed, but they’ve struggled to replicate the level of customer service that local merchants can provide. Some online-only retailers have tried to combat this by opening pop-up shops or putting their boutiques inside larger department stores, while others are finding that partnerships with local service startups can give them a footprint in communities.

Just this morning, the e-commerce fashion marketplace Tradesy is announcing an extended partnership with Happy Returns, a consumer returns startup that offers in-person returns for online retailers that don’t have stores. The partnership comes at the end of a six-month pilot program, where Tradesy found that customers overwhelmingly preferred to return their online purchases in-person rather than by mail.

Tradesy customers will now be able to return their purchases to any Happy Returns kiosk location nationwide for an immediate merchandise credit. The new long-term partnership also effectively puts a face to the Tradesy name for shoppers in metropolitan areas, without requiring the e-commerce marketplace to staff its own consumer-facing service centers.

Tradesy is just one of a handful of online-only retailers now partnering with Happy Returns for local returns. According to Happy Returns co-founder and CEO David Sobie, the company is also working with Eloquii and Shoes of Prey, and it recently launched a pilot program with Everlane, the mega-popular online clothing retailer. Sobie says retailers save money when they offer local returns through reduced shipping costs—since Happy Returns aggregates items before shipment—and fewer customer support calls.

“Happy Returns reduces the number of customer support interactions — calls, emails, chats — where shoppers are inquiring about the status of returns,” he says. “By initiating refunds at the time of return, Happy Returns eliminates the need for shoppers to follow up.”

Through surveys and focus groups, Sobie says his company has come to understand that refund speed and a consistent return process are two of the main reasons why consumers prefer making returns in-person, even when they shop online. But to make that kind of system work, his company has had to dig deep into the data to determine where its return kiosks, dubbed “Return Bars,” are likely to generate the most impact for its retail partners.

When deciding where to setup return kiosks, Happy Returns cross-references key statistics for each metropolitan area, including population, density, and income levels, with the locations of nearby “mall partners.” (Happy Returns has partnered with the retail center developers Westfield, Macerich, and Simon.) The company also looks at the e-commerce sales of its retail partners by metropolitan area to determine the best match.

Sobie sees local service startups providing a necessary service as online-only retailers look to gain a stronger foothold in individual communities, in part because of the increased confidence that consumers feel when they know there is a local location they can visit if they have a problem with the items they purchased online.

“By enabling online retailers to provide in-person returns and other physical services, companies like Happy Returns empower e-commerce companies to compete more effectively with brick-and-mortar retailers through a smaller retail footprint than they otherwise might have needed to offer these key services to their customers,” he says.

Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.