The era of 100% free online shopping is coming to an end: what do Inditex, Zalando or Uniqlo charge for sending and returning orders

Summer sales season, peak consumption in full fear of an economic slowdown due to the impact of inflation and, at the same time, the moment in which some large distribution groups are redefining their cost policy in online sales, the fees they charge their customers for shipping. In some cases, collecting the returns that are collected at homes, such as Inditex. In others, putting a minimum limit on free shipping, such as Zalando, which already did it in Spain but is doing it in more and more countries.

A turning point has been marked by the Galician group that owns Zara. The Spanish multinational has made sales over the internet one of the pillars of its business -it is 25% of all its turnover- and it was key to sustaining its activity during the months of confinement in 2020. However, the 'everything free' is difficult to maintain over time.

The Galician company is already charging in about 40 markets for the collection of orders that its customers buy. In Spain too. It does not happen with Zara, but it does with other brands, such as Oysho or Pull & Bear. In both, if shoppers choose to take the items they don't want to the stores, the return is free. If they decide to pick up at home, it entails a cost of 3.95 euros, which is subtracted from the amount to be reimbursed, as stated on the website of both brands.

"The reason is to seek greater efficiency in income and sustainability. The answer is positive, there is no impact on sales. There are more returns in the store." This is how Inditex's Director of Capital Markets, Marcos, explained the reason for this decision. López, during the last conference with investors where the company broke down its results for the first quarter of the year.“It is a measure that can continue to make the industry more efficient and sustainable”, he indicated.A double economic and environmental nuance.

In the case of Inditex, at the moment, there are two brands that charge for returns at home, but it serves as an example of how consumers have to look at the fine print to see which brands have put a price on home collection, which ones have not. , or for which shipments are charged and which are exempt from payment. At a time, furthermore, where companies are seeing clouds on the horizon and recognizing -not all of them- a slowdown in their forecasts.

This Friday it was the German group Zalando that has assumed that this year is not going to be as brilliant as expected. The multinational, which only sells online, has announced that it expects its annual income to grow between nothing and 3%. That is to say, it will bill between 10,400 and 10,700 million euros, when in March it forecast between 11,600 and 12,300 million. Zalando is not charging for online returns, but it has extended the requirement of a minimum purchase for free shipping to more countries, something it has been doing in Spain since 2019.

The German giant explains that "for most orders from 24.9 euros, shipping is free." On the other hand, if it is less, they cost an additional 3.5 euros. In addition, if it is long-distance shipments, it charges a plus of 2.9 euros. The company explains to elDiario.es that its "objective is to encourage customers to group their purchases and increase the size of their shopping basket by introducing a minimum order value (MOV)". This allows them to improve their cost per order rate.

Zalando introduced this MOV in Spain before the pandemic, but now it has decided to apply it to 15 other countries and already requires it in most markets. In Spanish, he affirms, "both the average size of the basket and the contribution to profits have increased", although he does not give specific figures. "It's also important to note that the vast majority of our customers are not affected by an MOV because their average shopping cart size often exceeds the threshold," he adds.

Another factor enters, listed companies that sell online usually give data on how their sales are going in this channel, but not on the costs involved. There Zalando did send a warning message at the end of the first quarter: that cost per shipment had skyrocketed by 10%. The reasons: "an increase in return rates, lower volumes and the impact of inflation on logistics, which puts pressure on the profitability of orders."

The German group does not have physical stores and the cost of online takes its toll. Other groups linked to traditional commerce do not charge if it is the customer who brings the products they do not want to the store. El Corte Inglés does so. On the other hand, if home collection is requested, customers of the department store company have to pay between 5.90 and 7.90 euros, depending on whether or not they have contracted a flat shipping rate called Plus.

This 'free in store' scheme is not followed by Uniqlo. Its parent company, the Japanese group Fast Retailing, charges for returning online (2.95 euros and as long as it is within the first 30 days after purchase) and does not allow a change of channel. At the end of 2020, it modified its return policy and does not allow you to opt for its physical establishments if you have bought online, nor in cases where the garments are collected in store. The reason, he justifies, is that "with the increasing number of payment options available online that cannot be accepted as returns in our stores, we have decided to simplify the entire return procedure in order to spend more time on customer service. As a result , all forms of online transactions must be returned to their original place of purchase."

This puzzle of how to undo the purchase also has different variables in the case of the electronic giant Amazon. "Products sold or shipped by Amazon are exempt from return costs regardless of the reason for the return, as long as it is made from Spain within 30 days from the date of receipt of the product," he explains to elDiario.es. With a caveat: "Free returns are not available for heavy and bulky items." In those cases, the cost is 5.50 euros.

On the other hand, there are chains that ensure that they have no intention of changing the model of free shipping and returns. For example, the British group Asos claims that it is an essential part of its business model.

"Currently, Mango does not plan to change its policy. The company's main objective is to facilitate the shopping and return experience for our customers. In general, the company allows its customers to return their garments for free," says the Catalan textile company. Meanwhile, the Swedish group H&M allows them for free as long as you are a registered customer. Instead, "returns of purchases made from a guest account will cost 1.95 euros. This amount will be deducted from the refund to be received," she says.

And, in the midst of this tangle, the Chinese online chain Shein, which has made its free returns one of the hallmarks of its 'low cost'. Of course, as long as there is only one return per order. If it is done in several steps, it charges 4.5 euros, from the second, which, like other companies, deducts from the refund. In addition, the Chinese group requires minimum orders of 9 euros to be exempt from shipping costs.

This spider web reflects differences between pure digital operators and those that combine physical establishments with online. In the latter case, the requirement to return to the store reveals that it is faster to put the items back into circulation. The consulting firm McKinsey Company talks about reverse logistics and, in an analysis published in 2021, assured that this step of returning to the store saved companies between 12 and 16 days when relocating the products in their distribution chain.

His analysis focuses on the United States and states that, in that market alone, consumers returned $428 billion worth of products to stores in 2020, of which a quarter were products purchased online.

In Spain, the National Observatory of Technology and Society (ONTSI), which ultimately depends on the Ministry of Economic Affairs, has studied online shopping habits through a survey. Also in 2020, 40% of Spanish citizens returned a product purchased via e-commerce, three points more than in 2019.

What is returned the most is clothing and footwear and there are differences depending on the buyer. "Returns are a practice that presents differences according to the type of sociodemographic and socioeconomic profile," says the ONTSI. "Women show a higher proportion of buyers who return products (41.4%) compared to men (37.7%). In relation to age, it is found that there are more returns among the young and middle-aged population, with special intensity in the age group of 35 to 44 years (44.7%), and lower figures are observed in the groups of 55 to 64 years (35.8%) and 65 to 74 years (31.2%). )".

In addition, this organization points out that "other variables such as the level of studies or the level of income seem to also affect returns. There is a higher proportion of Internet users who return online purchases among the population with a high level of education -41.9% in the population with FP and 42.3% among Internet users with higher education- than among those with low education -26.4% in Internet users with primary education or less and 25.5% among those who have up to ESO-", he summarizes according to this survey .

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