‘Try-before-you-buy’ services tested by Jet, Amazon, Best Buy

by Kim Souza (ksouza@talkbusiness.net) 292 views 

Free shipping in two days is now considered the cost of entry in online retail, but the next service tested by multiple retailers are variations of “try-before-you-buy.” Jet.com is testing the service, and Best Buy and Amazon recently began tests.

Market watchers suggest the apprehension many consumers have about trying new products is that they won’t be satisfied with the quality or performance of items new to them.

“Thanks to technology, try-before-you-buy is the latest ‘table stakes’ for retailers,” said Carol Spieckerman, CEO of Spieckerman Retail.

Jet.com is working with BrandShare to promote monthly e-commerce packages through a subscription. The packages would be filled with product samples chosen from about 300,000 items from suppliers such as Unilever, General Mills, Procter & Gamble, Starbucks and Pfizer. Wal-Mart uses BrandShare in a similar program with subscriptions for beauty boxes, baby boxes and back-to-school offerings.

Jet is testing this monthly service and selections are curated based on interests of participants. The test is small and appears to be somewhat of an extension of what Wal-Mart has been doing with its small subscription business.

“Try-before-you-buy programs are gaining traction because retailers are figuring out how to execute them without losing their shirts (in some cases, literally),” Spieckerman said. “What started as a fringe movement has become a proliferating business model as technology and advanced data analytics enable retailers and brand marketers to intuitively identify and serve up relevant products to consumers. The back-end management of item and returns tracking is also much more efficient thanks to technology, removing much of the risk for retailers and, of course, shoppers.”

In recent weeks Amazon has pushed the envelope further with the launch of a pilot it’s calling Amazon Prime Wardrobe. The service allows Prime members to put three or more clothing or accessory items into a Prime Wardrobe box. When the products are received the shopper can try them on and return any unwanted items free of charge. Amazon is throwing in a 10% discount if the shopper keeps three or four items. That discount goes to 20% if five items are kept.

The items eligible for the Prime Wardrobe include more than 1 million items from women, kids, baby and men’s departments. Brands available include Calvin Klein, Levi’s, Adidas, Theory and Lacoste. Amazon said it’s not charging any additional fee for the service that is in beta testing. Analysts said Prime Wardrobe takes the hassle out of returns for clothing much like Zappos did for buying shoes.

Annibal Sodero, assistant professor of Supply Chain at the University of Arkansas, has said returns are one of the most expensive parts of online retail and companies like Amazon and Zappos, now owned by Amazon, are succeeding in building that expense into their business models. He said it’s much harder for retailers that have not done so to offer the same free return policy and could make it harder for other retailers to offer the same service.

Amazon continues to grow its market share of online apparel and this new Prime Wardrobe service could expand upon that. Last year comScore reported Amazon grew its online apparel market share to 17% with marked improvements each year since 2013.

Best Buy recently said it would offer try-before-you-buy rentals on its website for cameras, fitness trackers and audio equipment. Best Buy is working with the San Francisco-based startup Lumoid on the test venture.

Shoppers in the test areas will have the option to try-before-you-buy on the Best Buy website. Best Buy will send interested customers to Lumoid’s website to make the rental. Customers earn about 20% of the rental price back in Lumoid credits if they go on to buy the product.

The items used in the service are goods customers have returned to Best Buy and deemed as “open box” which carry a slightly lower retail price than brand new. Customers can purchase a brand new item or take the one they tested a lower price.

“Customers are not walking into physical stores for discovery,” said Aarthi Ramamurthy, CEO and founder of Lumoid. “They already know what they want and they just go in to get it.”

Consumer who want to test the Apple Watch for a one week can do so or $50 through the Lumoid partnership. Ramamurthy said one in three renters of wearable tech go on to purchase the items.