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Does E-Commerce Need Brick-and-Mortar in Order to Grow?

Posted by Sean O'Neil on Tue, Jul 29, 2014 @ 11:07 AM

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Brick and Mortar wallNordstrom acquired the successful e-commerce business HauteLook in 2011. As a result, Nordstrom was able to acquire new customers by allowing HauteLook.com’s online shoppers to return items at Nordstrom Rack brick-and-mortar stores.

According to an April 2014 article on Racked.com, an online shopping and style intelligence media site, Pete Nordstrom, EVP of Nordstrom merchandising, stated, “‘When we enabled HauteLook returns to go to any Rack store, we saw that 50 percent of the customers are new. That’s the success.’” He also stated, “‘The idea is if you’re a pure play online, in order to grow, you need a physical presence.’”

At Vendere Partners, we've been wondering, can you get similar results without having to go the brick-and-mortar route?

Ease of return is a major issue with e-consumers, and some companies are finding ways to make returning items easier than ever without making customers pay high shipping fees or go to a post office or major carrier’s shipping outlet. Return Saver, for instance, a program launched by Clarus Marketing Group earlier this month, allows customers to return items purchased from any online store through FedEx Ground for just $49 a year.

While a program like Return Saver might not help e-businesses convert 50 percent of their customers into new customers, it could certainly help e-businesses grow faster. “In fact, 75 percent of consumers say a simple returns policy is a deciding factor in their shopping behavior. A convenient returns solution provides an opportunity for businesses to increase customer retention, minimize the impact of returns on profits, and maximize and extend the value of goods sold,” explains the FedEx website.

Nordstrom’s example sure does make a compelling argument for taking your online retail business to the street, but if doing that just doesn’t fit into your business model, providing easier returns through Return Saver-like programs may help you attract more customers and see more purchases.

Topics: lead generation, outsourcing

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