Getting gifts for the holidays = a big W. Having gifts that don’t work = a big L. But thankfully, we have “returns” when we rack up those losses.

As we’ve been reporting this month, the holiday season is here. And the volume of e-commerce means an increase in returns, which is, naturally, a big sticking point for retailers. They don’t want consumers to have a difficult experience returning gifts, as that makes them less likely to shop there in the future.

Holiday sales are predicted to jump 7% to 9%, to $1.3 trillion from November to January, per Deloitte. Last year, American shoppers returned approximately $428 billion in merchandise, which accounted for 10.6% of total 2020 retail sales, according to NRF. Fortunately for retailers (and consumers), there’s a cottage industry popping up to help stores navigate the headache of returns.

Like Happy Returns, for example, a company that offers in-person returns for online purchases, which allows shoppers to bypass mailing items in (which, by the way, can come with some heavy shipping and carrier fees).

Customer satisfaction: E-commerce generates return rates that are three to four times higher than brick and mortar due to carrier costs and volume, which in turn increases costs for consumers and retailers, David Sobie, VP of the return logistics company Happy Returns, told Retail Brew. The company provides software for merchant websites, like Everlane and Steve Madden, which are connected to a drop-off network used to get return items back to the retailer.

Happy Returns makes it so retailers can reduce the headache that comes with returning items. The PayPal–owned company recently reached a new partnership with Staples to expand its return network to 1,000 additional locations.

Online shoppers at Happy Returns’ merchant partners can return items purchased online to any Staples store. Once an item for return is brought into a Happy Returns location—now up to 3,800, with their Staples partnership—a shopper can immediately receive a refund.

• According to a report by Uberall, a software solutions firm, 66% of US shoppers said they’re more likely to purchase an item online when it can be returned to a local store.

“If you’ve been following retail and know what’s happening with carriers increasing prices, that’s getting more and more expensive. Compounding the headache is the fact that shoppers expect returns to be free right now,” Sobie said.

Click here to read more about how major retailers are handling returns this holiday season.—KM

Fast fashion gets a bad rep for its environmental repercussions and cheap labor, but that’s never hampered consumer demand. Now e-comm gigantor Alibaba has created its own fast-fashion platform, AllyLikes, to cash in on the ever-growing market.

First revealed by Chinese tech blog, Tech Planet, the e-commerce platform is reportedly in its nascent stages and set to compete against Chinese shopping site Shein. (Alibaba did not respond to a request for comment for this story.)

What’s the tea? The AllyLikes website lists everything from apparel to accessories at ultra-cheap prices, with sunglasses starting at $4.99 and dresses priced as low as $8.99.

• It currently ships across the US, Canada, France, and Italy, with free shipping to the US for orders over $49.
• AllyLikes sets up an attractive value proposition with low prices and already has 100+ new styles to choose from.
• But giants like Shein, which reported about 5 million app downloads from the Apple store and 9 million from Google Play, are setting up a tough competition.

What’s next: Erin Schmidt, senior analyst at Coresight Research, expects Alibaba to pull out all the stops, leveraging influencers, live streaming, and its “deep data expertise” to ensure success.

• “Alibaba is not just an online company but a vast ecosystem, driven by data,” she said. “It has a vast network of sellers, logistics networks, and manufacturers it can leverage which will make it a powerful competitor in fast fashion.”
• But with the growing debate around sustainability in fashion, Michael Olaye VP, managing director of experience community at R/GA, a digital agency, also anticipates some backlash.

“I foresee significant consumer pushback coming in the not-too-distant future against this sort of business model, not dissimilar to what the auto industry and aviation face today,” Olaye said. “Until then, this is a big profits strategy for Alibaba and a huge threat to established players.”—JS

Sometimes, you just need to feel ~special~. Enter: online specialty stores, like Telfar’s pre-order shop and CoachOutlet.com, designed to be curated digital shopping platforms.

For big sales events (*cough*, Christmas), from VIP promos to pre-orders and product drops, having a separate e-comm experience boasts a few benefits. There’s that feeling of exclusivity, for one. But it also gives brands an accurate estimate of product demand, while also directly engaging with consumers.

Game time: E-commerce solutions company Scalefast initially built specialty store solutions to handle digital and physical inventory for the video game industry, SVP of marketing Dan Wallace-Brewster told Retail Brew.

During high volume sales periods, like a new Final Fantasy release, “hundreds of thousands” of transactions are made globally within a short timeframe. Online specialty stores can corral that traffic and demand.

• Luxury companies have caught onto the trend, embracing more “bespoke, customer intense experiences,” Wallace-Brewster added.
• Gathering customer information and “points of intelligence” through these specialty stores can reduce excess product, adjust quantity, make design alterations, and allow for more flexible return rules that may not be possible under normal distribution.

Scalefast has recently worked with brands like Salvatore Ferragamo to create flash-sale sites for their employees. The company also helped build the L’Oréal Friends & Family store and powered Maison Margiela’s “Friends & Family” perfume sale just last week.

+1: Wallace-Brewster mentioned the utility of “re-commerce” specialty stores (a fancy way of saying resale), given supply-chain shortages and shipping delays. URBN, for example, rolled out its new Nuuly Thrift secondhand marketplace back in August. There’s also Patagonia’s Worn Wear resale site.

+2: Another way consumers can avoid supply issues? Digital presents. “That previously took the format of an e-gift card, but now we’re seeing the role of the virtual product in the metaverse,” Wallace-Brewster told us. “It’s going to get a foothold this year and gain a lot of steam for holiday 2022.”—JG

Making moves: Kim Kardhashian West’s shapewear brand, Skims, is already valued at over $1 billion. But a new collaboration with Fendi opens up bigger possibilities. (The WSJ)

Just about enough: As holidays approach, Americans are maybe just buying too much stuff, worsening the supply-chain crisis. (The Atlantic)

Buyer’s market: Inside Buy Nothing, a network of social media groups where users can give away anything from leftover pickle juice to birthday supplies. (The NYT)

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Last Wednesday, the M&A world was shocked to hear that Paypal was possibly in discussions to acquire Pinterest. Paypal said late Sunday that it is not pursuing the acquisition “at this time,” but to some, the deal would’ve made complete sense.

Michael Morris, a Guggenheim Securities analyst told Yahoo, “We see technology companies increasingly competing to service consumers across entertainment, information and commerce functions.”

Some of Paypal’s recent acquisitions include Japanese buy now, pay later service Paidy and return logistics firm Happy Returns (which we covered earlier in this NL).

Our question: Would it make sense for a company like Paypal to acquire Pinterest? Cast your vote here.

Check up: Last week we asked if healthcare is a viable business strategy for traditional retailers. A majority (58.3%) believe so, while 16.7% don’t think so. A quarter of respondents aren’t too sure.

If you blink, the holiday shopping season might sneak up on you, but that’s why we’re here. This month Retail Brew has covered everything from Neiman Marcus’s gift-guide strategy to trucker shortages and Black Friday prep.

Catch up on the insights and stories here.

Catch up on the Retail Brew stories you may have missed.

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• The next must-have job for retailers: TikTok experts