Could Amazon make packageless returns the new norm?
Amazon's initiative to remove packaging from its returns process may be the perfect way to cut costs, but it's also a great way to respond to consumer demand for less waste – and make one big-box retailer in particular more popular at an incredibly critical time. Will packageless returns become a new retail norm?
Packaging is at the forefront of retail. The wasteful use of plastics and cardboard has forced many companies to make major changes to their practices, if only to serve their bottom line. Furthermore, a collective moral consciousness is increasingly gripping the world regarding climate change and renewable practices.
It’s great news to hear, then, that Amazon – itself the creator of thousands of tons of packaging each week – is beginning to cut down on its use through its new returns process.
How it works
Amazon’s new service is simple and uses technology that’s been around for years, making it a surprise that it’s taken this long to roll out. By getting hold of a QR code from the Amazon Return Center website and taking it with them, shoppers can simply hand packages to store staff without a label or external box – the product boxes, of course, need to be used. From here, staff pack and ship the product back to the warehouse for free.
Explaining its motives, the company explained: “We understand that finding a box and tape and printing a label for a return can still be a hassle. Now, most Amazon returns are easier than ever with no box required.”
On a brand level, the idea has been made a standard: the service is available at a number of stores run by Whole Foods Markets – itself a subsidiary of Amazon since 2017 – alongside every one of Amazon’s physical stores (Amazon Books and Amazon 4-star). This isn’t exactly a huge portfolio of real estate – there are under 20 Amazon Books and just four 4-stars – but it more than makes up for it with its wider affiliates.
A further 5,000 or so UPS stores are also in on the plan, but the most interesting partnership is undoubtedly with Kohl’s.
Rescuing relevance from the jaws of defeat
For a big-box retailer like Kohl’s, it’s a coup. The department store chain is partnering with Amazon in 1,150 locations across the US, following a limited trial run in 100 stores. Each one operates a separate line at the customer service area just for Amazon returns, from which they'll pack, label and ship your return without charge.
Massive competitors like Macy’s, JCPenney and Sears have been steadily winding up their portfolio of stores; Kohl’s itself has withdrawn from a handful of mall locations. However, it’s still weathering the storm and maintains a major presence: according to its CEO Michelle Gass, “80% of America lives within ten miles of a Kohl’s”.
The convenience and certainty of the Amazon returns process is guaranteed for a huge chunk of US shoppers. Rather than fighting the online giant, it’s leveraging its assets.
Most Kohl’s stores already offer free parking, and extra convenience is being afforded to anyone returning Amazon packages with designated parking spots close to the store entrance. It’s for obvious reasons, as Gass explained: “This new service is another example of how Kohl's is delivering innovation to drive traffic to our stores and bring more relevance to our customers.”
With its “adapt or die” mentality, Kohl’s is both remaining competitive and giving a real boost to Amazon’s initiative, which has every reason to become the new norm in business.
What’s driving demand for packageless returns?
Breaking Amazon’s packageless returns concept down, it’s hard to find a criticism – it fulfils so many demands across all levels.
Meeting customer expectations
Amazon’s no stranger to delivering what customers want – it wouldn’t be where it was without this focus. Yet once again, it’s proving how many omnichannel businesses in the UK are failing to meet modern consumer demand.
As we found in last year’s Retail Experience Score 100, 73 of our selected 100 retailers didn’t offer free postal, collection or drop-off returns, despite the fact that 76% of respondents to a poll in our State of Retail Report 2019 believe that postal returns should be free.
Meanwhile, a shocking 14% of our RES 100 retailers didn’t offer the opportunity for their own online-bought products to be returned in store – a shocking disconnect between online and offline channels, and one that only makes high-street locations more irrelevant and inflexible.
Responding to moral concerns
Consumers are attracted to businesses that demonstrate a commitment to the environment. According to a recent poll by Dotcom Distribution, 80% of respondents claimed to be “bothered by excess and wasteful packaging”, and a further 38% “said they were extremely bothered by it”.
What’s more, it’s growing increasingly important with younger demographics. In the same survey, 62% of all shoppers “said they prefer to purchase from brands that use sustainable shipping materials”, and for those between the ages of 18 and 29, this sentiment rose was 74%.
By providing an opportunity like packageless returns, Amazon and like-minded competitors are adding another string to their promotional bows, and for all the right reasons.
Kohl’s’ attempt to reverse the fortunes of massive losses to department stores is admirable, with footfall certain to rise with the certainty and convenience guaranteed by the partnership. According to the same Dotcom poll, 84% of shoppers would be more likely to buy online if they could return or exchange unwanted items in store – 10% up on the response last year (74%).
These consumers, who may simply visit Kohl’s to return something, are immediately a captive audience for carefully curated shop floor. The packageless element removes yet another boundary and expense to the shopper. It’s certainly something that the likes of Debenhams, Marks & Spencer and John Lewis could stand to benefit from in the UK.
Two steps forward, one step back
There’s no doubt that this initiative is a fantastic one, responding to the requirements and beliefs of countless modern shoppers.
However, Amazon is far from perfect; rather ironically, the packageless returns showcased in the US is yet to cross the Atlantic, and in the meantime, Amazon is instead causing controversy with its UK packaging. The white plastic envelopes regularly used to deliver smaller purchases or clothing are “not widely recycled” in Britain, despite regularly being assumed as such by shoppers.
It may take time for Amazon to get its act together beyond the US, but it’s a start – and there’s no doubt that other retailers will support or mimic the concept – otherwise it’s just another reason for them to fall behind the long-established competition.