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Are we (retail) commitment-phobes?

Laybuy delivery blog

Dating guru I am not, but I can give you one piece of advice: there’s a lot of commitment-phobes out there – when it comes to shopping that is. But like every agony aunt worth her (or in my case his) salt, I can also offer some sympathy, as it’s not entirely the consumer’s fault.

So what do we mean by commitment-phobic purchasing? More than ever before, we live in a ‘try before you buy’ retail culture. We no longer feel that we have to seriously consider a purchase before we make it, knowing that if we buy ten items, we will easily be able to return nine once we’ve chosen our favourite. And one of the key reasons that we feel we’re able to have this casual relationship with retail is due to what I like to term the ‘retail returns wars’.

In the battleground that is retail, brands are keen to do anything to give themselves the edge over competitors – with one method being the offer of free returns. As a promotion once in a while, one can see the sense in this. But we’ve reached a point where so many retailers now feel bound to offer this service free, as standard, that it’s become the rule and not the exception. The result? Customers who expect to be able to buy at whim and return at will – without footing the postage bill.

The trend can leave retailers paying out huge amounts in return costs for products that they will never see revenue for. And, (no ‘bah humbug’ intended), the festive season can be a retailer’s nemesis on this particular issue. The dress worn to the Christmas party and returned (yes it does happen!). The winter-perfect Instagram shots featuring designer items that the shopper has no intention of keeping. The ten Christmas jumpers that the shopaholic orders to try on, always intending to keep just one. This change in behaviour simply isn’t sustainable for retailers as it contributes heavily to the dangerous narrowing of margins during an already difficult trading period.

There are ways to address the returns problem, even for retailers reluctant to withdraw the offer entirely. Whilst ‘buy now pay later’ solutions like Laybuy’s can never solve the issue completely, we can at least help to reduce its impact. Paying by Laybuy encourages people to make a definitive purchase, paying a sixth upfront and spreading the rest over five weekly payments. This changes the mentality of the purchase as the customer makes an initial commitment, meaning less unnecessary orders and returns. On average, the number of refunds on purchases made using Laybuy is 3.76% - dramatically lower than the industry average return rate of 15-70%. 

The retail culture encouraged by the free returns model is unsustainable. But if retailers are not ready to renege on this particular wooing tactic, they need to employ strategies to encourage their customers to look on purchasing not as a casual fling, but as a commitment.

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Alex Rohloff
Alex Rohloff