How Bracketing Changed the Retail Returns Landscape

I’ve made plenty of online returns in the last decade: the material didn’t feel right, the fit was all wrong, do I even remember putting those jeans in my cart?

It’s easy to get carried away with ecommerce, and most of the time there’s not even a second thought to sticking a shipping label on a box and sending back unwanted merchandise.

Until this year.

Retailers are scrambling to manage the onslaught of record breaking returns. UPS was predicting to handle more than 60 million returns just from the holidays, causing major issues for the reverse supply chain. 

One reason for this steep climb in returns is due to the rising trend bracketing

But it turns out bracketing is only part of a bigger problem creating returns, and retailers should be looking at their customers for solutions on how to minimize them.

The Bracketing Trend

No, we’re not talking about photography techniques and cameras.

Bracketing is a term used in retail, specifically for ecommerce orders and most commonly with apparel. 

Customers will buy multiples of a certain product with the intention of keeping what they like and returning the rest. This can look like purchasing different:

  • Sizes
  • Colors
  • Styles
  • Etc.

Think of it as turning your home into a personal dressing room. Your items arrive, you try them on, decide what to keep, and send back the rest.

But this escalation of returning multiple items at one time means retailers are struggling to keep up.

“Bracketing is a short term challenge for retailers as they come up with a long-term, sustainable solution,” explains Brandon Rael, BusinessTransformation Leader at Capgemini Invent. “We should expect to see the rate of returns increase exponentially due to bracketing.”

Bracketing = More Returns?

“2021 was a record year for returns,” says Meagan Knowlton, Director of Sustainability at Optoro. “With the growth of ecommerce, more and more purchases are coming back.”

Retailers saw returns increase to $761 billion in 2021, reported by NRF. That’s 78% more than reported in 2020!

Now, granted, that jump isn’t entirely due to bracketing. According to Knowlton, “Ecommerce in general can have 3-5 times the return rate of brick-and-mortar retail.” 

However, hesitation to shop in-stores compiled with the holiday season created the perfect conditions for bracketing to be more problematic than before.  

While bracketing has been around since the start of ecommerce, a rapid increase has been seen in the last several years and most notably due to pandemic restrictions. 

Which makes sense: with brick and mortar stores closing due to government mandates, consumers were forced to rely on ecommerce shopping to get products. These conditions also denied them the ability to test items first hand and try them on in-store. 

With bracketing adding to the growing rise of returns, the reverse supply chain is struggling to keep up (just ask UPS).

So what can be done for bracketing? As it turns out, it’s only part of a deeper problem. 

“Bracketing is a result of retailers not knowing their customers,” says Rael. “It’s crucial to get it right.”

To mitigate the need for bracketing, retailers should look to their customers for the answer.

Why? 

Because a better customer experience reduces the need for returns.

Minimizing Returns Helps Reverse Logistics

“Returns are an integral part of the retail experience, and they’re not going away,” reminds Rael.

Even if they’re reduced, the retail industry will never be rid of them completely. 

But after the overwhelming flood of returns from this past year, more and more retailers are looking for ways to lessen them, which will put less strain on reverse logistics systems.  

So that begs the important question – how do you reduce returns? 

By preventing them in the first place. 

Giving customers fewer reasons to return items helps mitigate future returns.

Detailed Product Knowledge

Understanding the product before it’s purchased goes a long way in preventing returns. But this isn’t so easy with ecommerce.

You can’t touch something shown to you on a screen and there’s no opportunity to try it on before you click the ‘checkout’ button. 

To get around this, retailers will want to give potential customers as much information as possible. This can look like:

  • Updated sizing guides
  • Detailed images
  • Material descriptions 
  • Customer reviews 

Giving your customer better understanding of the product only increases their ability to make a more informed purchase, and in turn, keep items instead of returning them.

Knowing this has led many retailers to begin incorporating tools and technologies to better enhance their customer’s ecommerce experience.

Using Predictive Tools (to Capture Customer Feedback)

If you’ve heard the saying “throw everything at the wall and see what sticks” then you know what it means when retailers don’t understand their customers or what they want.  

It’s also why they get so many returns.

However, advancing tools and technologies centered around customer feedback and experience are mitigating this. 

“It’s so important for us to stop guessing and identifying areas that we can use data and analytics to make better data driven decisions around sizing and buying the right product,” explains Liza Amlani, founder of The Merchant Life and Principal at Retail Strategy Group.

Perhaps you’ve stumbled upon some of these already. 

Websites like Warby Parker, Sephora, and Houzz (I know, even home design sites are in on this!) have been ahead of the curve with options like augmented reality (AR) and true-fit technology. 

True-fit allows for a virtual try-on experience. With features like 3-D body imaging, customers have a better image of how an item will look prior to their purchase instead of guessing. 

Likewise, sites like Houzz use the same concept through AR. By offering a visual experience, customers have a more tangible image for designing and remodeling their home.  

With the pandemic limiting in-store experiences, thus helping to spike the rate of returns, retailers not utilizing these options are overlooking a huge opportunity to not only further connect with their customers but limit items returning to their stores.

“I think that once we start connecting with the customer on a deeper level and enabling the right tech tools and digital tools across buying, planning, and in stores, we should see a lift in [bracketing]” says Amlani.

Sustainability Matters

A box labeled with a recyclable label sits on a shelf

You wouldn’t think to associate returns with sustainability. But surprisingly, returns end up doing a lot of damage to the environment.

And with a rise in ecommerce and online shipping, this has only gotten worse.

To start, returns don’t always end up back on shelves to be resold. About 9.6 billion pounds of returns ended up in U.S. landfills in 2021 alone. 

It’s also worth noting the tons of toxic fumes are released throughout the entire shipping and transportation process, via trucks and planes, as a result of reverse logistics channels. Not to mention the increased waste from packaging and plastic materials.

Yet retailers have the ability to reduce all of this: by simply knowing their customers. 

Consumers have become much more conscious about how products they buy affect the environment. Now they want retailers and brands to take initiative to reduce their carbon footprint.

“Retailers can be more transparent about the processes involved in how they’re getting products to market,” says Amlani, alluding to the start to finish process for products and touch points they make along the way. 

She continues. “Brands individually can work on having less of an impact around returns through putting messages out there about sustainability and what it’s actually doing to the environment and what it’s costing the retailer and the customer.”

Conclusion

Returns aren’t the villain of the retail industry, but rather a deeper look into understanding the customers behind the products.

The tools and technologies available to retailers can lessen them, taking the strain off the reverse supply chain while making customers happy with their purchases.

As Amlani suggests, “If we used smarter digital tools, planning and data analytics, and AI to better predict what the customer was going to buy, we would have less returns from an overall product perspective.”

Liza Amlani

Founder of The Merchant Life

Brandon Rael

Business Transformation Leader at Capgemini Invent

Meagan Knowlton

Director of Sustainability at Optoro