Beginning in October, Winn-Dixie supermarkets in 14 states, mostly in the Southeast, will accept returns of items purchased from select online and offline retailers.
The $14 billion supermarket chain has inked an agreement with The Return Store Inc., a 7-month-old company in Fair Lawn, NJ, to coordinate the shipment of returns back to retailers. The Return Store will sign contracts with interested merchants.
“We hope that it will be an extra service to present customers and perhaps attract some people to shop with us that may not have done so previously,” said Mickey Clerc, director of public relations at Winn-Dixie Stores Inc., Jacksonville, FL.
Consumers won't need to pack, wrap or label the returned merchandise. Only the product's shelf packaging and the packing slip are required. Winn-Dixie customer-service personnel at the courtesy desk will accept the returns. The consumer will receive a receipt and credit on his credit card within minutes, according to the company.
Winn-Dixie will receive a fee from the Return Store based on the volume of transactions. Plans call for an estimated 400 to 600 Return Stores in Winn-Dixie's network of 1,100 supermarkets by the end of 2001.
“We hope not to store [the returns] very long,” Clerc said. “We do not have complete details on all of it at this point in time.”
Buddy Hayden, chairman/CEO of the Return Store, said, “Our plan is, every two or three days, we'll pick them up. They're consolidated by the freight company and then sent … back to wherever the retailer has told us to, in most cases to reverse-logistics companies.”
The reverse-logistics firms have warehouses where the returned products are sorted and, according to the retailer's instructions, sent for auction, restocking or destruction.
Retailers will compensate the Return Store for the returned products. The Return Store also is paid the shipping cost from the customer or retailer, depending on who is responsible for bearing the cost of the return.
These items are then bulk-shipped by the freight consolidator hired by the Return Store.
The Return Store's revenue margin is the difference between the shipping charges collected from the returned products and the fee paid to the freight consolidator.
“We're not in the freight space,” Hayden said. “We're providing the customer-service link on behalf of the retailer to the customer.”
The Return Store will have to sign up as many online and offline marketers as possible to ensure success. The company's Web site plays a key role in informing consumers about the return policies for all merchants partnering with the Return Store. Entering the ZIP code will yield a map and driving directions to the three closest Winn-Dixie stores.
“We'll have deals with all types of merchants, big- and small-brand companies, online, catalog and stores,” Hayden said. “We currently have tentative agreements with more than a dozen merchants.”
The Return Store also will partner with as many retailers as possible for convenient return location centers. Supermarkets are a key focus, Hayden said, primarily because of heavy consumer traffic, free parking and longer hours of operation. Plus, they are well lit, have large shopping carts and don't compete with the Return Stores' merchant brands.
The Return Store will publicize its presence through mentions on the back of product packaging slips. The slip will include the Return Store's name, Web address, telephone number and a request to visit the site for locations of the nearest Return Store.
“Down the road, we hope to do consumer advertising if our brand gets the feel of the Good Housekeeping Seal of Approval,” the Return Store's Hayden said.
For Winn-Dixie, the alliance with the Return Store is a ginger step toward e-commerce. Its earlier direct marketing experience did not pan out. The supermarket chain used to home-deliver products, but it found consumer response poor and discontinued that offering. Nor does it sell online at www.winn-dixie.com.
Although Winn-Dixie expects the deal to drive foot traffic to its supermarket aisles, the grocer reserves judgment on the outcome.
“We don't know exactly what to expect; we don't have any history to judge this on,” Clerc said. “It's a new venture. … We hope that we'll have some business. Hopefully, it'll send people to our stores.”
