Some online mega retailers are moving to charge people for returning unwanted purchases. Photo: 123rf
A move by online mega retailers to charge for returns could push shoppers back into local bricks and mortar stores.
Clothing giant ASOS previously allowed people to return unwanted purchases for a full refund, but not anymore. They will be stung about NZ$8 unless they keep a minimum purchase value.
Amazon is also charging a return fee and UK fashion retailer Boohoo is now charging for freight.
First Retail Group managing director of retail strategy experts Chris Wilkinson told Checkpoint changes like these had been happening across the e-commerce market.
"We've seen the change in GST over the last couple of years, which has reduced the appetite for people to be buying overseas. All these moves give people an opportunity to pause and rethink just where they're spending their money."
Data from the United States shows 16 percent of online shopping is returned and 11 percent of that is deemed fraudulent.
"People have bought it, maybe ordered it, maybe worn and then returned it. In some cases, it's been damaged or maybe they've even swapped it out for a fake product, that's a been a bit of a trend that's happened in the States as well."
He said at large production facilities, packages were checked to determine whether they went back into stock, if they needed fixing or if they had to go to landfill.
"The problem that they're seeing in the UK, we've just returned from working over there and looking at some of those trends that are driving some of the big retailers. It's quite surprising the amount of stock that gets damaged either when it's coming back or when the customers returned it. So, it's quite surprising what's going on out there."
Mega retailers were feeling the burn of the retail industry struggling as well, he said.
"These costs are very, very significant. We know how much freight is, but the thing with these large retailers is that they're able to automate that original transaction process extremely well, but it's not easy to automate those returns."
He said many Generation Z customers are starting to creep back into stores in person, as retailers are developing much more experiential retail environments.
"They want to be wowed, when you think about walking downtown and see the stores like Mecca, highly experiential. The fragrances, the staff, good engagement. They're visually appealing," he said.
"They appeal to kind of all the sensors, stores like that are really helping and reengage people with our retail environments."
He said some younger consumers were still spending, not just having a look.
"Some of our younger consumers are still continuing to spend because the pressures that maybe other generations are feeling are not necessarily felt in those younger markets," he said.
Wilkinson said because larger retailers were getting bigger, smaller stores were disappearing.
"Bigger retailers are coming into the country as we're seeing people are being inspired by new experiences," he said.
With bigger brands coming in taking over smaller operators, everything looks the same, he said.
"You know what creates that differentiation? Those smaller artisanal independent businesses that we cherish, it's hard because we're not kind of seeing that succession," he said.
"In terms of our city centres and even our shopping centres, we're starting to see an appetite where we know there's an appetite to try and bring more of those businesses on board, but it's a real challenge at the moment because we're not seeing that appetite coming through from small retailers."
However, Wilkinson said more younger people were rejecting cheaper, disposable items.
"I think we're seeing younger people are starting to prioritise sustainability. There's more of an awareness about endurance, products that are going to last."