Shipping - Article | 6-min. read
Case Study: How Terry Bicycles Succeeded in the Era of On-Demand Shopping
Returns are a critical part of the customer experience. A poorly run system can have a major impact on your business. With shopping behaviors changing—from seasonal to on-demand—customers are expecting products to always be available so they can shop whenever they want to. Many companies have had to modify their operations to keep their customers happy. Terry Bicycles, an apparel and bike parts distributor from Vermont, is one of those companies. We spoke to Liz Robert, the company’s CEO, to learn just how Terry Bicycles altered its return strategy to find a better solution for their customers and their business.
How have your customers’ shopping behaviors changed in the last 15 years?
Today’s customers are typically ordering online shortly before an event. Maybe they’re going on a group ride for the weekend. The closer that they order to the date they need the product, the more critical it is that we’re able to respond if the product isn’t satisfactory. The on-demand nature of our consumer has inspired us to be on-demand reactionary.
How has the on-demand shopping model affected the apparel industry?
We have a lot of sizing issues, obviously; it’s technical athletic wear. It’s difficult to get things to fit properly, particularly with a new customer who isn’t familiar with our size charts. We have to be much more responsive in being able to get the product back and replacing it in the correct size or something more suitable for their needs. So it’s not just that the consumer is behaving in a more on-demand fashion with their purchases. Their expectations around getting it right are much higher and require a much quicker turnaround.
How has the on-demand shopping model changed your return strategy?
What’s been impacted is the flow and the fact that we need to respond quickly. I’ve been giving you the consumer’s perspective, and obviously customer satisfaction is very important to us. There is also a benefit to us, as a manufacturer and as a brand, to be able to get that product back as soon as possible, particularly when it’s on demand and particularly as we get deeper and deeper into the season.
Because our products are fashion-oriented, they are very seasonal. So the prints that we create for Spring 2016 are different than the ones that we create for Spring 2017. It’s important to us to sell returned product again at full-price and in the same season.
What challenges do you face in this environment?
Mondays and Tuesdays are our largest return days. They’re also our largest selling days. We can’t afford to have the staff on the phone and in returns to meet that volume on those two days and then have them sitting around and twiddling their thumbs for the last three days of the week. In order to keep our work force flexible, we cross-train individuals in the warehouse. Obviously, our process isn’t perfect, but we try to keep the flow under control and as even as can be without having to hire more people certain days of the week.
How does your warehouse process change to fit this new demand model?
I think the biggest impact that it has on the warehouse process is the need to be able to be flexible by day of the week. We do a lot to cross-train our workforce in the warehouse, so if the phone’s not ringing, we can have people in the calling center help with certain aspects of returns. Vice versa, there are certain people who are involved in pick, pack and ship who can be involved in the returns process—specifically the opportunity to put the product back into inventory.
What tactics do you implement in order to be more responsive?
In the past, up until three or four years ago, we sent out returns information on the packing slip or invoice. It listed the returns department and our address. We posted it on our website, catalog and customer service notes. Now we send out a return label, so customers don’t have to go to the website and find out the return address or take it to the Post Office. They can simply take the label that’s in the package and use it on the same packaging let’s say a pair of shorts arrived in. They’ll put the shorts back in the package with the packing list and send it back. From the consumer’s perspective, it takes many steps out of the processing of the return.
What effect does including a return label in your shipments have on your customers?
Honestly, they prefer it. I would say the majority of our consumers use the pre-printed label, even though it costs them perhaps a few dollars more. We include a small handling fee for arranging and processing, which is why the price is higher. Because of the convenience and again because of the speed at which they’ll be credited for the return, they choose to use the label provided. It’s all about convenience and expediency. We also allow them the option of making the return themselves. This way, if the customer wants to handle the return at the Post Office and not pay the handling fee, they can. It takes the pressure off and that, I think, is very important to them.
What is one thing that surprised you about this new process?
The biggest skepticism I had in doing this was whether or not people would pay more for the convenience of the label. We were extremely surprised that most of our customers now use that label to return the product. It taught us a lesson on the value of convenient service. People will pay for it. That to me was a big breakthrough.
Take a page out of Liz Robert’s book. Even though every company has its own pain points, it must adapt to shopping behaviors. By offering multiple return options, tweaking your warehouse processes and cross-training employees, you too can meet your customer’s ever-growing demands.