Try Before You Buy Models Spark Need for Better Liquidation Solutions

The try-before-you-buy (TBYB) business model is taking off with ecommerce companies such as Trunk Club, Stitch Fix, and ASOS leading the charge. Even Amazon has gotten into the game with its Prime Wardrobe offering. While most programs are focused on apparel, companies like Warby Parker and Best Buy are leveraging the TBYB model for eyeglasses and electronics respectively. Simply put, this concept is working across verticals. 

Around 25% of retailers say they will adopt TBYB by next year; it makes sense considering the one drawback of ecommerce is the consumer’s inability to try on, try out, or touch something before purchase. By having this type of offering, consumers will have the convenience of the online marketplace with the reassurance of the in-person experience: choose your items (or, in some cases have a personal stylist choose them); have them shipped; try on the items you selected; return what you don’t like (for free) and only pay for what you want to keep. 

By offering a TBYB program, retailers will remain competitive and no doubt drive customer loyalty; they’ll also be able to better control and forecast for returns. The caveat however is being able to implement an efficient reverse logistics program to handle the expected tsunami of merchandise coming back. Some food for thought from this recent Brightpearl study:

• 87% of consumers plan to return several purchases per delivery
• Consumers will buy  more, but could return an extra four items a month
• This could quadruple return costs for retailers 
• 69% of retailers do not have technology solutions to process returns
• The cost of returning an item back into the supply chain can be double that of delivering it

Something else to think about: at some point (ex: with a piece of trendy apparel) the item will be removed from the rotation as the cost associated with the logistics won’t be worth it. It’s important for retailers to figure out the the fate of that piece of clothing before it ends up sitting in a warehouse, incurring more costs. Here’s where a technology-based, modern liquidation solution comes in. Newer approaches (like the one B-Stock offers) will produce much higher recovery rates for the merchandise, while allowing retailers to maintain control over who is purchasing the inventory and how it enters the secondary market. 

For more liquidation insights, please check out our recent article in Reverse Logistics Magazine: Creating Value from Returns – Through Liquidation. Or shoot us an email to connect directly with our team.

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