To Woo Shoppers, Stores Are Accepting Competitors' Returns
April 17 2019 - 11:29AM
Dow Jones News
By Sarah Nassauer
Walgreens Boots Alliance Inc. and Nordstrom Inc. will let online
shoppers at other brands and retailers pick up or return orders at
some stores, a sign of how retailers are partnering in new ways to
draw customers as more shopping shifts online.
Walgreens will start offering package pickup and returns at over
8,000 U.S. locations to partners such as Levi Strauss & Co. and
Urban Outfitters Inc., which owns Anthropologie and other chains.
Nordstrom will test doing the same at seven stores in the Los
Angeles area with a group that includes Cole Haan, said the
companies. To start, some brands will only allow package returns or
pickup, but not both.
For example, when shoppers want to return a product purchased on
Levi.com they can choose to ship it to Levi, drop it off at a Levi
store, or take it to a Walgreens store.
"The main thing is this will drive more footfall into
Walgreens," using the chains convenient locations as an asset, said
Alex Gourlay, co-chief operating officer of Walgreens Boots
Alliance.
The arrangement is being brokered by Narvar Inc., a software and
technology company that manages order tracking and customer
communication around online orders and returns for hundreds of
brands, including Levi and Urban Outfitters. About a dozen Narvar
clients have decided to offer some piece of the service to their
online shoppers at either Walgreens or Nordstrom so far, Narvar
Chief Executive Amit Sharma said.
Walgreens has struck about a dozen deals in recent years with
companies, including grocer Kroger Corp., Microsoft Corp., and
FedEx Corp., in a bid to increase pharmacy revenue and use services
to expand the business amid falling sales. Walgreens is only
offering Narvar's new service in locations with a FedEx partnership
where store workers are already trained to handle the flow of
packages, said Mr. Gourlay.
Nordstrom also has experimented with new ways to use its
department stores, offering temporary space to online brands like
shoe seller Allbirds and opening a store that offers services like
tailoring and manicures, but no clothes. With its latest test,
Nordstrom is effectively helping brands like Cole Haan go around it
to sell directly to shoppers online, hoping any downside will be
offset by the people who visit its stores to make returns or pick
up orders. "We are piloting this as another way to serve customers
on their terms," said a Nordstrom spokeswoman.
Other store chains have forged similar partnerships in response
to the rise of Amazon.com Inc. and shifting buying habits.
Department store Kohl's Corp. allows returns from Amazon at about
100 stores. Lord & Taylor, a department store chain owned by
Hudson's Bay Co., last year started selling some products through
Walmart Inc.'s website in a bid to increase sales.
The industry is still grappling with how to navigate the
logistic and competitive challenges these partnerships can
bring.
Happy Returns, a Santa Monica, Calif.-based startup, manages
returns for brands in part by creating a network of other retailers
willing to accept those returns. A pilot program with 7-Eleven Inc.
ended last year after some shoppers found store workers didn't know
how to process a return or said they were too busy to do so, said
Happy Returns co-founder and CEO David Sobie.
Because turnover is high among convenience store workers and
they are usually managing several tasks at once, "it was hard for
them to execute, " he said. The company has expanded with specialty
retailers Paper Source, Sur La Table and others, he said.
A spokeswoman for 7-Eleven said the company is committed to
testing new programs. The Happy Returns system was tested in fewer
than 10 stores and the company, the "process and technology did not
work well with our store operations," she said.
Through Narvar, Cole Haan will offer shoppers returns at
Nordstrom, but not Walgreens, since the shoe seller already works
with the department store, a Cole Haan spokeswoman said. Urban
Outfitters, which also sells some of its clothing brands at
Nordstrom, to start will offer online order pickup at Walgreens,
not Nordstrom, in part because some see the department store as a
more likely competitor, said people familiar with the plans.
For now Narvar won't charge more for the service, Mr. Sharma
said, offering it as part of its larger software services to
clients.
Walgreens and Nordstrom will handle the cost of managing
packages in hopes of bringing more shoppers to stores, according to
the companies.
Brands hope adding more return and pickup locations will boost
sales by offering convenience and reduce the cost of shipping.
Sending more items in a single package or letting carriers like
FedEx pick up more packages at one location can lower shipping
costs.
"We take advantage of pooling and make some of the returns more
efficient," said Marc Rosen, Levi's president of direct to
consumer. And the deal adds 8,000 more drop points where shoppers
can make a return, he said. "It's allowing them to return our
products at points they pass everyday."
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
April 17, 2019 11:14 ET (15:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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