Daily Insights

A Rock and a Hard Place

By: Cassidy.McGrain@gartner.com | Aug 16, 2019

In 2018, specialty retail was under assault. This year, it’s taking up arms.

Brands have improved fulfillment speed dramatically: a fifth of brands in Gartner L2’s Digital IQ Index: Specialty Retail now offer free two-day shipping, and the number of brands offering next-day shipping has doubled. This year’s top two performers, beauty duo Sephora and Ulta, reserve the best fulfillment advantages for their highest-tier loyalty members. Only nine tracked brands in the category continue to lack any sort of free shipping for online purchases. Sponsoring shipping, however, doesn’t go both ways: while the majority of analyzed brands prioritized faster and cheaper shipping, brands are tightening up famously lenient return policies to combat continually rising costs.

Online returns behavior is increasing. Apparel, shoes and accessories brands can experience e-commerce return rates over 30%, with consumers primarily citing sizing and fit issues. No longer able to afford covering the cost of free returns,  adoption of this incentive dropped to 41%, down from 55% in 2018. Stores are a potential safe haven, with 16 of the 18 brands that removed free return shipping in 2019 offering free in-store returns for online purchases.