Know how the ‘try and buy’ tactic by smaller e-tailers is hurting Amazon, Flipkart and Snapdeal

Niche online retailers or e-tailers are taking on giants like Amazon, Flipkart, Snapdeal through their ‘try and buy’ schemes. As per industry experts, e-tailers—like Lenskart, BlueStone, Caratlane, etc—who give customers a lucrative option of trying at home before buying, are hurting country’s largest online market places as the scheme has been able to push through higher value purchases, earn customer loyalty and satisfaction.

On an average, 10-12% of products sold online are returned by customers for varied reasons and as per industry estimates every return costs an additional Rs 70 for eCommerce firms, excluding shipping costs. However, though home trials also cost the same ranging to Rs 70-100 per visit, but they have their eyes trained on potential long-term benefits.

As per Economic Times, this gives them an advantage over eCommerce giants such as Flipkart and Amazon in the specific category they operate, because offering home trials would complicate the inventory-light business models of these electronic marketplaces.

Lenskart, an eye-wear online retailer, has been offering home trials in 42 cities for the past five months. Under the scheme, customers have to choose five frames which the delivery people bring it to their homes.

As per data provided by the financial daily, this practice has translated to over 8% of the company's 150,000 monthly shipments.

"Home trials work for specialised categories where people want to be sure they make a right decision," co-founder and chief executive of Lenskart Peyush Bansal told ET, adding "We have seen that about 60-70% of the user send up placing an order. The conversion rates are higher and results in half of regular return rates of 7% for items ordered online."

The scheme is doing wonders for Ratan Tata founded BlueStone as the company claims the returns have plummeted to zero. The company offers online buyers to try replicas of jewellery pieces at their homes before buying them.

"Since it's a high-value category with the average price of an item sold on our site around Rs 20,000 per piece, a 'home try on' more than covers the cost of bringing the samples to a customer's doorstep," CEO Gaurav Singh Kushwaha told ET. He added that this has boost their transactions.

Meanwhile, Bengaluru-based online furniture retailer Urban Ladder recently allowed customers to choose colours and fabrics for sofas, charging Rs 299 for the service. Tiger Global-backed Caratlane sends jewellery consultants for home trials on request.

However, lingerie e-tailer Zivame stopped the ‘try at home’ scheme after a three-month period and replaced it with ‘fit assessment’ and call centre, without charging the consumer.

Assistant professor of marketing at the Indian Institute of Management, Bengaluru, Seema Gupta informed that try and buy policies would work for companies that deal in high-value and high-margin products to lock in the customer. “The cost of exchange can be recovered from the high margins in these products. Inventory players have better quality control and hence try and buy is likely to be more successful in them than a marketplace,” she added.

Globally, in a bid to bridge the experiential shopping gap, ‘try and buy’ schemes have long been deployed since eCommerce began. New York-based online eyeglasses retailer Warby Parker, estimated to be valued at $1 billion, lets people choose five eye-frames to be shipped over for a five-day home trial, all free of cost. While in India, industry experts forecast a speedy phase-out of retail stores in several categories like electronics and books, where the touch and feel is not that important.

"Over time, outlets will only be needed to test the look and feel. For products where touch and feel is less important today such as smartphones, tablets and other electronics, the opportunity to phase out large offline locations quickly will be even greater,” said Aamir Jariwala, member at industry body Ecommerce Coalition of India and founder of Karma Recycling, an online seller of refurbished electronic products.

(Image: Reuters)