According to Loop Returns, 2023 saw around $231 billion in returned merchandise find its way back to e-commerce brands. Yes – that's a lot of lost revenue.
Merchants can't combat every return that takes place. Products may be defective, or even get damaged during transit. But the majority of returns don't happen for these reasons.
Returns in e-commerce happen because an online purchase is the wrong size, the wrong color, or just ‘not right' for a customer's needs.
Given that online shopping doesn't allow consumers to 'try before they buy', it's not surprising that e-commerce returns outstrip physical storefronts by a wide margin. Yet COVID-19 restrictions and more liberal returns policies saw consumers combine the best of both worlds. The convenience of shopping online and hassle-free returns enable customers to turn their bedrooms into their own personal fitting rooms.
In sum, greater availability of 'no questions asked' returns has fueled the rise of bracketing online purchases – and many retailers are struggling with how to manage this costly shopping trend.
What is bracketing?
"Bracketing" is a shopping strategy in e-commerce where customers buy multiple versions of the same item to try in person, intending to return some later.
Bracketing is most common where many variations exist for size and color in the same product, such as apparel and footwear, but also in situations where consumers may want to test items within a specific environment.
It's easy to see why many online shoppers prefer to bracket purchases. If they haven't shopped with a brand before or are buying a brand-new product, it's difficult to know what size to buy or whether the color depicted on-screen is accurate. It's this uncertainty that creates a negative online shopping experience and drives consumers away from purchasing certain products online.
By bracketing their purchases, consumers can overcome one of the biggest drawbacks of e-commerce. They get to replicate the in-store experience of trying on clothes to find the perfect fit – from the comfort of their own home.
Why is bracketing a growing trend in e-commerce?
In the past few years, bracketing has only gone in one direction – up. According to Loop and Shippo's 2023 survey, 50% of online shoppers surveyed admitted to choosing to bracket purchases when shopping online.
With many consumers either unable or unwilling to shop in person during the COVID-19 pandemic, this has driven more people than ever to take their shopping activities online.
Firstly, supply chain issues and difficulties with timely delivery have been widespread over the past few years. This has led many consumers to experiment with new brands. While beneficial from an acquisition standpoint, a lack of familiarity with a brand's offerings can push customers to buy multiple variations out of caution.
Secondly, the in-store retail restrictions caused by COVID forced consumers to shop for products online that they would normally buy in person. For example, many of us would much rather try a pair of shoes in person before committing to an online purchase. With this no longer possible or practical, buying multiple versions of the same item provided customers with a useful workaround.
In sum, it's easy to see why bracketing has spiraled in a few short years. This leaves retailers with a significant problem; once consumers have adjusted to certain shopping habits, they're very likely to stick.
A boon for consumers – and a curse for retailers?
As bracketing in e-commerce grows more popular, online retailers are struggling under the tidal wave of returns. But it's too simple to characterize bracketing in e-commerce businesses merely as a loss of revenue; bracketing also creates some major logistical issues for merchants, all of which hurt customer satisfaction:
Fluctuating inventory levels
Real-time inventory management has become an essential tool in e-commerce in managing promotions and orders seamlessly. However, bracketing is highly disruptive to these insights.
When consumers bracket purchases, several SKU variants of a particular product get removed from inventory at the same time – only for some of them to reappear later when they get returned. When this is happening en masse, it's immensely difficult for retailers to make accurate inventory replenishments.
Higher fulfillment costs
When customers order multiple items, this influences to cost of fulfilling and shipping the order. For example, if a customer buys one t-shirt, it's likely to fit into a single poly mailer. But if a customer decides to buy multiple variations of that t-shirt, a cardboard box is a more appropriate option. Due to the costlier packaging and higher DIM weight, the cost of fulfilling and shipping that bracketed order will be much higher.
Normally, retailers can shoulder these larger costs without any issues. But when that order represents a bracketed purchase of the same items, much of this revenue disappears when the rest of the products are returned, leaving merchants with more processing costs and eroded profit margins.
Slower returns processing
When return volumes are artificially high due to bracketing, this can put a massive strain on a retailer's returns management capabilities.
If returns start to pile up, it's much harder to process exchanges and refunds promptly, which means longer wait times for your customers to obtain refunds or exchanges. When a positive customer experience is key to building brand loyalty, delays like this can seriously affect your ability to retain customers.
How should you approach bracketing as an e-commerce merchant?
Yes, bracketing represents a logistical nightmare for e-commerce fulfillment. But there's a key reason why many retailers are struggling to deal with bracketing effectively; this behavior frequently gets lumped in with fraud practices such as ‘wardrobing' (where consumers wear items once and then return them).
This means that some brands end up taking extreme measures to try and prevent bracketing – rather than trying to understand what drives the need for bracketing in the first place.
Consumers aren't intentionally trying to short-change retailers when bracketing purchases they've bought online; they're simply trying to minimize friction within the online shopping journey. So, if your customers are turning to bracketing to ensure they're buying the right items, it's a sign that you need to take a closer look at your shopping experience.
4 Productive ways to reduce bracketing at your online store
1. Provide better product descriptions
If bracketing is a persistent problem at your online store, it could be because your customers lack comprehensive product information that enables them to purchase with confidence.
For example, simply labeling a garment as ‘size 6' is of little value to your customers. A size 6 at one brand will differ from a size 6 somewhere else – sometimes by a huge margin.
You should provide customers with a comprehensive sizing guide that lists the dimensions for each garment size, including chest, waist, hips, and leg measurements. If you're stocking multiple brands through your store, consider providing a dedicated size guide for each.
Another great technique is to use product imagery to inform your customers. A growing number of fashion brands have begun listing the height and clothing size of their models on product pages, allowing consumers to gauge much more accurately how a certain style will look on multiple body types.
2. Virtual try-ons
This may sound wildly futuristic, but rapid technological advances in Augmented Reality and AI have made 'trying on' garments at home without bracketing a reality for consumers (no pun intended).
Online marketplace Etsy now offers an augmented reality feature so customers can ‘place' home decor and furniture within the home, while platforms like OBSESS allow retailers to create their very own virtual try-on tools that integrate directly with their e-commerce storefront.
These immersive experiences don't just make customers more likely to buy an item; they also lower return rates dramatically because customers can replicate testing out products before purchasing.
3. Use data to identify return trends
Ever been into a clothing store and noticed that there seems to be a lot of one particular garment left on the rack? This is a clear sign that consumers are not gravitating towards that style.
In a brick and mortar setting, this is a much easier issue to identify and manage. Staff can see this trend with their own eyes, and make an effort to ask customers who tried on that garment why they didn't buy it.
For online merchants, this is more challenging. It's only when a particular product is seeing consistently high return rates that they can pinpoint a potential bracketing problem.
The upside of returns is that the returns process itself offers a great opportunity for retailers to gather data on why bracketing is taking place and develop strategies to combat it. For example, asking about the reason for the return and giving your customer space to add additional comments is invaluable to understanding areas of friction in the shopping experience that are driving bracketing.
4. Make exchanges more straightforward
Despite hating returns, many retailers don't have a system for customers to keep returned items or make easy exchanges for other sizes or colors. The only alternative is to buy an item, find out it's not suitable, return it, and then make a new order from scratch.
This time-consuming scenario only incentivizes consumers to bracket purchases in a bid to make their shopping journey more efficient – and can you blame them?
Consider subscribing to a returns management system like Loop which encourages customers to exchange rather than return goods. Its intelligent exchange-first system makes it seamless for customers to swap colors and sizes, making it hassle-free for customers to get the right item without needing to bracket purchases.
For some retailers, it requires a change in mindset to stop viewing returns as an inconvenience that hurts your store. But when managed well, returns can be one of the best ways to foster brand loyalty in e-commerce.
Instead of penalizing customers who partake in bracketing, the best way to combat bracketing in e-commerce is to refine the shopping and returns experience - until bracketing is no longer necessary for customers to find the perfect item.
How? By improving your product descriptions and pages to help customers make informed purchasing decisions, investing in try-on technology, understanding pain points in the customer journey, and choosing returns management systems that streamline exchanges. By making bracketing a less convenient option than buying products the conventional way, e-commerce brands can make bracketing a thing of the past.