Zulily just got a whole lot more forgiving for some of its customers.
In its latest experiment, the Seattle-based retailer is allowing some of its U.S. customers a chance to return certain items, reversing the company’s long-standing policy of not allowing any returns, except under the most extreme circumstances.
According to The Wall Street Journal, in mid-May, Zulily reached out to some of its customers via email, saying that they would accept returns on certain items, including some apparel brands and home goods like linens. Customers, who participated in the trial, would be able to receive store credit minus shipping costs.
A Zulily spokeswoman confirmed the changes, emphasizing that it is a limited-time test of randomly selected participants.
“As part of our focus on continuously improving the customer experience, we regularly evaluate various programs and offers, a Zulily spokeswoman said, in a statement. “In May we offered a limited-time returns promotion to a small group of randomly selected members. Our overall returns policy has not changed.”
Allowing returns is the latest experiment by the retailer to see if it can growth to previous levels. Keeping expenses low has always been high on the company’s priority list because of its flash-sales business model. Everyday, it lists hundreds of new items on its website for sale, and because it sells the items first, and then buys them from vendors later, it can offer deeps discounts by keeping inventory costs low.
When Zulily first launched, the flash-sales model was extremely popular across various sites, but now it seems the novelty of the experience has started to wear off as consumers expect standard e-commerce amenities, such as returns and fast shipping.
In addition to testing a return policy, Zulily has also tinkered with other aspects of its business.
For instance, it’s been reducing the number of items it is selling every day to “100 events,” to make the site easier to browse; it is also shifting its marketing strategy to a longer-term approach, which advertises the service and not necessarily an individual sale. Finally, one of the major sticking points has been shipping times. The company has started to store some inventory in its warehouses, so products can land on a customer’s doorstep much faster.
Some of these changes may begin to erode the basic premise of the flash sales model, but if it can continue to keep costs low while offering more services, customers will in all likelihood respond positively.
But keeping expenses down will be the key. For instance, a recent study found that consumers return a staggering $642.6 billion in goods annually around the globe. To put that into context, that is the the combined sales of Wal-Mart Stores, Target, Best Buy, Gap and Macy’s together, reports MarketWatch, which quotes a study from market research firm IHL.
Today, the company’s stock remained basically flat, slipping 26 cents, or 1.8 percent, to $14.05 a share.