Free Shipping and Returns...Customers adore it.
Through all of the testing that online retailers do the one offer that consistently comes back as a clear winner is Free Shipping. Brian Needels, General Manager of Hanks Clothing,knew that customers loved Hanks Free Shipping on orders over $99, but wondered if they could up the bar a notch and offer Free Shipping on most all orders. Then he started thinking why not go all the way and pay for their returns also. Online Shoe retailer Zappos obviously was very successful with this business model, having just been gobbled up by Amazon for almost 1 billion, so why couldn't a smaller online retailer make it work also? So on one Friday afternoon they pulled the trigger and launched the program on their website, http://www.hanksclothing.com. But would it work? The first week brought some interesting results.
In the first week of the launch of the new policy it looked promising. "One thing it makes you do is sharpen your pencil.", Needels stated, "Now we are reviewing every order and analyzing every shipping cost to see what orders are profitable and which ones aren't. If they weren't profitable what did we need to do to make them profitable without simply raising the price?" Some solutions that arose from this analysis were simple. Like minimum quantities on some items (you can ship 2 as cheap as one), going to vendors for discounts (Walmart is brutal on vendors), changing the shipping on some items from UPS to Priority Mail, or simply dropping low volume products that are expensive to ship. "It's a lot of work.", Needels continued, "Any one can slap a label on a package and charge a customer for it. We wanted to figure out a way to offer a customer one of the most loved offers in online shopping without raising our price. That takes some thought, ingenuity, and hard work."
As for the Free Return shipping Hanks Clothing already had data to back it. Hanks Clothing knew how many returns they received back and the cost. Needels is confident they can offer that service without much trouble. Needels said he can't reveal details but stated, "The Free Return shipping won't be as big a challenge. We are confident we will build repeat customers with that service. I mean I love it myself if I buy something online. Why not offer it to Hanks customers?"
So all in all orders were up noticeably in the first week, and although a few were not profitable, with a little hard work Needels is confident they can offer this great benefit to their customers all year long. Needels closed by saying, "It's rough out there for consumers right now. It's no secret the economic climate isn't rosy. It's not a good time for companies to build resentment in customers by nickle and diming them right now. They need to be doing the opposite and helping them out. If this means a business has to work a little harder, a little longer, and a little smarter to help their customers then it's the least they can do. We're just offering our customers what we ourselves love... it's pretty simple really."
Photo:
http://www.prlog.org/
