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ePaper created 2014-04-29, 17:58:02 | version 1.30.00
Dark side of the new shopping paradises Not everything brought by the parcel service elicits a scream of delight. Downside of the online shopping boom. Shopping from the comfort of your own sofa is like romping around in a modern-day land of milk and honey: just a few clicks, a short wait, and then whatever products might have caught your fancy start arriving via parcel services and piling up on your living room floor. While traditional merchants are still pondering on whether it is even possible to make money online, growth in revenues generated by digital sales channels is picking up speed. Depending on statistics, in terms of their share of Germany’s total retail sales these channels already cleared the 10% hurdle in 2013. And with forecasts predicting growth rates of up to 23%, the sense of excitement in the world of digital retail is palpable. Yet, in the wake of the deluge of online orders, there are some dark clouds moving in. “Scream with delight or send it back!”, is what online shoppers think with amazing frequency. Accord- ing to calculations by the Returns Manage- ment research group of the University of Bamberg, while a billion packages containing online purchases might roll through Germany every year, retailers will see nearly a third of those again. Björn Asdecker of the Chair of Logistics in Bamberg helps visualise just how enormous this amount is: “Assuming a parcel length of 40 cm, the 286 million returns could circle the Earth’s 40,000 km cir- cumference 2.9 times.” Broken down by sector, one in two fashion parcels, one in five electronics parcels and one in ten book parcels finds its way back to the sender. What these averages fail to reveal is that returns for gift items are in the single-digit percentage range whereas return rates for fashionable women’s attire can be up to 80%. The unrestrained frenzy of online orders is currently pro- ducing some rather outlandish consumer behaviours: In the new sharing economy, a smart consumer is a user, not an owner, and online merchants are not immune to this trend. The perfect dirndl for Oktoberfest or the little black dress for a reception is ordered just in time for an event and sent back the very next day. Groups of teenagers place veritable tidal waves of orders to transform their home living rooms into catwalks for just a few hours. Another similar nuisance are frivolous buyers who might order five handsets when a new mobile phone is launched, then only keep the one that arrives first. According to the Bam- berg study, nearly one in five (18.6%) of the 538 people surveyed under the age of 30 admits to having exploited cancellation rights. And merchants are left to foot the bill, namely between €5 and €17 for processing a return, post- age and handling. Plus, generally speaking, the smaller the online shop and parcel volume, the more expensive this becomes. If you add to that the fact that one in every ten returns can no longer be offered as new merchandise or might even be unsellable, doubts arise as to the poten- tial of this kind of business model to turn a profit. N Hassle-free online consumption is causing retailers a lot of hassle. Whether this business model even pays off in segments with high return rates remains to be seen. DEUTSCHEEUROSHOPANNUALREPORT2013/SHOPPING 020 S