The Web Retailer News Digest for January 15th, 2021
Last week, we heard that the peak online shopping season is quickly followed by the peak online returns season. All those returns are expected to shrink the holiday sales tally by $115 billion in January.
This week, we are told that 18% of merchandise purchased online last year was returned, and 7.5% of those returns ($7.7 billion) were fraudulent. To add insult to injury, we’ve also heard more about how Amazon and Walmart automate the decision to allow customers to keep products they want to return instead of having to send them back.
So we have high return rates, high return fraud and customers who don’t even have to send back their returns. Why not save time and just give your products away?
Returns fraud and “just keep it”
The Wall Street Journal investigated how Amazon, Walmart and other companies decide whether shoppers will be allowed to keep a product instead of having to return it.
It seems that the big retailers are simply calculating when it is cheaper to refund a customer and let them keep the item, rather than incur the expense of shipping, handling, inspection and so on. That makes economic sense, but what message does it send to shoppers?
Unsurprisingly, customers love it when they don’t have to send returns back. But what does the growing trend of “just keep it” mean for ecommerce as a whole? Just as customers now expect fast and free shipping and a generous returns policy, will they now feel entitled to a refund without having to go to the trouble of actually sending the product back?
Alongside this, the National Retail Federation and Appriss Retail released new research on returns in 2020. The headline figures for online retail in the US are $565 billion of sales, $102 billion of returns (18% of sales) and $7.7 billion of fraudulent returns (7.5% of returns).
With those kinds of stats, should we really be sending the message that customers can just keep their unwanted purchases? Isn’t returning the order a simple and necessary act of goodwill from the customer? They should have to return their returns. The clue is in the name!
Amazon has made it easier for shoppers to buy from sellers who are not winning the Buy Box. All Offers Display displays offers in a slide-out panel rather than navigating to a separate page. Most purchases will certainly continue to go through the Buy Box but the removal of one step and a cleaner design could provide a small uplift for other offers.
Amazon’s newest marketplace in the Netherlands now offers sellers advertising options including Sponsored Products, Sponsored Brands and Stores. This follows the rollout of the same options to Brazil in December.
Amazon in the news
An Amazon seller from Chicago is being aggressively pursued by California for sales taxes the state says were due between 2017 to 2019.
The state’s revenue department has frozen the seller’s bank accounts and taken $2,000 without their permission. In response, the Online Merchants Guild is suing the California Department of Tax and Fee Administration, saying that its actions unlawfully discriminate against non-residents and that Amazon itself should be held liable for any sales taxes due. The case continues.
Amazon has closed down its Prime Pantry service in the US, reports Bloomberg. Prime Pantry launched in 2014 and offered a range of groceries that could be stored at room temperature and were often bulky and expensive to ship. The service closed down in the UK in June 2020.
Meanwhile, Amazon was named the top grocery retailer in research company Dunnhumby’s annual Retailer Preference Index. The index ranks retailers based on factors including price, quality, convenience, discounts and speed. Although Prime Pantry has closed, Amazon sells groceries online through Amazon Fresh and has physical stores under the Whole Foods and Amazon Go brands.
A survey of ad buyers by investment bank Cowen shows that Amazon’s ad business will gain the most market share over the next two years, reports CNBC. Survey respondents said they expect the proportion of their ad spending going to Amazon to increase from 7% in 2020 to 11% in 2022, while their spend with other platforms will stay flat or fall. Amazon’s share of online advertising revenue has been growing faster than market leaders Google and Facebook. Interestingly, Amazon is itself the largest spender on advertising in the US.
Amazon is adding five new facilities in Detroit, including a 820,000-square-foot robot-equipped fulfillment center, says FreightWaves. The other facilities will include a fulfillment center for same-day deliveries, a site to handle big and bulky items and two to manage sortation and distribution.
Airport retailer Hudson has partnered with Amazon to use its Just Walk Out technology. The first store to use the checkout-free system will be at Dallas Love Field Airport. A spokesperson for Hudson told Forbes.com that purchases can be made almost instantaneously.
eBay in the UK has announced changes to the Global Shipping Program (GSP), and sellers now need “where applicable” to apply for an EORI (Economic Operators Registration and Identification number) to send orders to buyers in the EU. The GSP allows sellers to send items abroad without the burden of dealing with customs and taxes, by providing a processing service within the seller’s own country. Requiring sellers to obtain an EORI rather undermines the whole point of the program.
eBay is rolling out its Managed Payments system to private sellers in 2021. eBay Managed Payments has been slowly replacing PayPal for business sellers since 2018. With Managed Payments, eBay fees are automatically deducted and the proceeds paid directly into the seller’s bank account, in the same way as Amazon disbursements.
eBay Motors is providing free advertising for UK car dealers this February. Dealers will not be charged for vehicle listings across Gumtree Motors, eBay Motors and Motors.co.uk. The offer is part of a Covid-19 support package following the UK’s third full lockdown.
Etsy has upgraded its Teams community groups system with improved search and filtering features, a new Team homepage layout, the ability to write blog posts, and a new knowledgebase system. Etsy Teams is similar to Facebook Groups, providing a way for sellers to connect based on common interests.
DC360 published its top five ecommerce charts of 2020, covering online marketplaces, online retail’s share of total retail, Amazon Prime Day, European ecommerce and SMB online retailers.
The chart below shows how ecommerce has grown from 5.1% of overall retail in 2007 to 21% in 2020, but also reinforces the fact that physical retail – despite the pandemic – is still four times larger than online retail.
Ecommerce logistics news
The logistics industry continues its slow march into the future, with the news that GM will sell electric delivery vans to FedEx, and Verizon will be working with UPS to provide drone deliveries to a retirement community in Florida.
Amazon has relaxed some of the Seller Fulfilled Prime (SFP) performance requirements that were due to come into force in February. SFP allows merchants to ship their own orders and still qualify for the Prime badge. The change is due to the Covid-19 pandemic and the shipping delays being experienced by the main carriers, reports CNBC.
The UK’s national postal provider Royal Mail has reported that mail deliveries are disrupted in 34 areas including large parts of London, due to the Covid-19 pandemic. eBay has extended its delivery estimates for those areas, and will automatically remove Late Delivery strikes for the affected postcodes until the end of January.
In the UK, businesses using Amazon Seller Fulfilled Prime can now use parcel carrier Hermes to ship their orders, in addition to existing approved carriers including Amazon Shipping, Royal Mail, Yodel, DPD, Parcelforce and UPS.
Also for UK sellers, Amazon is also temporarily relaxing the thresholds for late shipment, cancellation and order defect rates in January, due to Brexit-related delays.
Continuing with Brexit, Tamebay reports on “chaos” due to the end of the transition period, with DPD suspending deliveries to the EU, several UK retailers blocking orders from the EU, and also some EU retailers stopping orders from the UK. Better news came from Amazon, which said that UPS has resumed small parcel delivery service between the UK and the EU, and announced discounted rates for cross-border FBA shipments until the end of March.
Webinars coming soon
Various dates: Amazon advertising has a full program of 20 webinars in six languages, covering Sponsored Products, Sponsored Brands, reporting, optimization and tips.
January 19: ChannelAdvisor’s annual event for automotive brands AutoCommerce takes place, with sessions on marketplaces, digital marketing, logistics and fulfillment.
Amazon felt the need to announce that Seller Central will no longer support the Internet Explorer (IE) web browser.
The much-loathed browser, which had 95% of the market in 2003, was replaced by Microsoft Edge as the Windows default browser in 2015. With around a 1-2% share of online usage, IE is still supported by Microsoft, and several organizations have old systems which rely on it.