The Selling Power Of Free Returns

How do we fight back against the online mattress market? It’s a question that’s been at the forefront of every traditional mattress retailer’s mind in recent years. For good reasons, too. According to Furniture Today's newest bedding retail distribution report, the direct-to-consumer channel has, in fact, been siphoning market share from bedding specialist and furniture stores. In the past two years, the direct-to-consumer mattress market has gained nearly $1 billion in retail sales—roughly the same amount traditional mattress retailers have lost. Many industry veterans have attempted to stave off their new competition by adopting their own versions of the bed-in-a-box model, but there may actually be another key factor at play. While the convenience of buying a boxed bed online is clear, these direct-to-consumer players have also upped the ante by offering free returns. As this market has grown over the years, consumer expectations have shifted in that direction. Research has shown that return policies can be a deciding factor for online shoppers—with a recent consumer survey revealing that more than 70% of consumers said they would be more likely to shop at a retailer if they offered a “no questions asked” return policy. Ultimately, the benefits of offering free and easy returns may be the key to recapturing lost retail sales.

When direct-to-consumer mattress brands first burst onto the scene, many doubted their viability. Who would be willing to buy such a big-ticket item sight-unseen? To alleviate that potential anxiety, these companies promised extended trial periods and no-questions-asked returns. More than just offering added assurance, this approach exposed a major blind-spot in the traditional mattress retail market. In the past, the process of returning a mattress had been both expensive and cumbersome—for both consumers and retailers. When a customer returns their mattress purchase, retailers have to deal with much more than just a loss of one sale. In addition to figuring out the logistics of picking up the bed, stores are then faced with what to do with it once it’s been returned (since mattresses require extensive cleaning and refurbishing in order to be resold, if they are able to at all). As such, many retailers have gone to great lengths to avoid returns all together. In 2004, the Wall Street Journal reported that most local and regional retailers didn’t even offer returns at all—while national chains often offered a long drawn-out process that came with steep fees.

So how do the online mattress sellers do it? Casper works with third-party charities, like a church or the Salvation Army, for all of their returns. Rather than relying on a wide-network of delivery and customer service representatives, these local charities come into the customer’s home and pick up the mattress for donation instead. Even though the company ultimately loses the sale, donating the mattress is actually more cost-effective than shipping the product to a facility and attempting to refurbish and resell it. On top of that, the company also gets a tax write-off for the donation.

But mostly, many of these companies are just hoping their customers will still find returning the mattress to be too much of a hassle. Even the easiest, most lax return policy doesn’t erase the fact that returning a mattress requires quite a bit of maneuvering—plus it means the consumer has to go out and start the mattress buying process all over again.

For traditional retailers, the trend towards no-fee returns may actually open up more opportunities—if they’re willing to risk the potential fulfillment expenses. Offering a good return policy is a way to create more consumer confidence in their purchase. If that encourages more people to buy, then the added sales may be enough to offset the small number of people who actually want to return their mattress. More importantly, it provides retailers with the opportunity to communicate the true value of in-store shopping. While some brands are just hoping their customers will put up with their one-size-fits-all mattress, smaller specialty stores has the staff and the knowledge base to help consumers find the right sleep system for their specific needs—so they won’t even want to return it. By backing up this claim with the promise of a full refund, retailers can deliver an unparalleled level of confidence and customer support.

Read more herehere and here.

This article originally appeared in Sleep Retailer eNews on September 28, 2017

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