Dagne Dover co-founder Deepa Gandhi shares why having easy and free returns is good for business at the web-only handbag retailer.

Online-only handbag retailer Dagne Dover is turning returns into an opportunity to drive loyalty.

Dagne Dover offers free shipping and free returns for its products. It also works with FedEx and Narvar Inc. to offer a package pickup and return service for consumers at more than 8,000 Walgreens locations and some Nordstrom stores. Other retailers including Urban Outfitters Inc., Levi Strauss & Co., Timbuk2, Arezzo & Co. and Cole Haan also use these pickup points for returns. Dagne Dover is No. 1658 in the 2019 Digital Commerce 360 Next 1000.

Dagne Dover decided to offer this service to shoppers because it is an element of offering superior customer service, says Deepa Gandhi, co-founder and chief operating officer for Dagne Dover.

“Not everyone has easy access to a drop-off location,” Gandhi says. About 15% of customers that are returning an item will opt to do it at Walgreens, she says.

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Even though the process is for a return, having a smooth customer experience on this side of the purchase will help drive loyalty and increase customer lifetime value, she says. The retailer views the return process as a way to get feedback from shoppers and engage with them.

“We’re always looking for ways to have a two-day dialogue,” Gandhi says.

When a shopper returns a product, the retailer will ask for the reason why and adjust its products if it consistently receives that feedback, Gandhi says. For example, the retailer reduced the weight of one of its bags after hearing it was too heavy, and it made adjustments to a color on the product detail page that wasn’t accurately representing the product’s color, Gandhi says.

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Another example is that some shoppers said the exact size of its medium bag was not what they were expecting, and so it developed a size guide for its medium and large size bags, which has helped decrease returns of those products, she says.

For the purposes of the feedback loop, it does not include a return shipping label with the initial order. Plus, Dagne Dover’s carrier would charge the retailer to have a return label created for every order, she says. Not including a return label is common practice for retailers, as only seven, or 13.5% of retailers, did this in a Digital Commerce 360 test of 52 retailers’ fulfillment and return practices in 2019.

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Once an order is returned, Dagne Dover estimates that its team spends a few minutes inspecting the quality of each item before deciding to resell it or to put it with second- or third-quality merchandise. Second-quality merchandise means that Dagne Dover will sell it as a “lightly used” product through its website, and third-quality merchandise means the retailer will have to throw it out. In 2020, it is looking to find organizations where it can donate its inventory. The majority of its returned products are resold, Gandhi says.

The retailer has two distribution centers that it uses to fulfill orders, one on the West Coast and one on the East Coast, depending on where the customers are located. Because it only wants to train the staff in one facility to handle returns, all returns are sent to its West Coast facility, Gandhi says.

 

During the 2019 holiday season, it also made a few updates to its fulfillment program to entice more shoppers to buy, such as extending its return policy until the end of January for all purchases from Black Friday, an extension of the usual 30 days.

It also doubled its customer experience team going into the fourth quarter to make sure it had enough staff on hand to handle customer service calls.

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To read more strategies on turning online returns into an opportunity, download the free report Finding the ROI in online returns.

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