Shein’s Forever 21 Returns Deal Spotlights Key Omnichannel Strategy

The recent news that Shein and Forever 21 are linking up to cross-sell underscores the importance of returns as part of the commerce continuum.

As PYMNTS reported Thursday (Aug. 24), Shein is gearing up to sell Forever 21 clothing and accessories on the Shein site, a move that broaden Shein’s presence across channels.

And, according to initial details, Shein might conceivably operate within the brick-and-mortar Forever 21 locations.

The deal itself involves Shein acquiring about one third of Sparc Group, which operates Forever 21, and Sparc Group taking a minority stake in Shein.

Returns in a In-Store Setting

The partnership also could allow customers to return items bought from Shein at Forever 21 locations, of which more than 400 locations exist in the U.S.

Given the digital footprint already established by Shein, offering up returns in a brick-and-mortar setting also broadens reach and customer engagement. By returning items in an in-store setting, we note, the potential is there to incentivize consumers to make additional purchases while they are in the midst of returning what they didn’t want – boosting the top line fortunes of both Shein and Forever 21.

The concept of easing returns in a move to solidify customer loyalty is not new.

Among some examples noted by PYMNTS is PayPal-owned Happy Returns, which launched a new returns-based revenue stream for Shopify merchants. Happy Returns, as noted on their site, offers box-free, label-free returns.

And in an interview with PYMNTS’ Karen Webster, David Sobie, vice president of Happy Returns, said that customers generally prefer to return items in-person. When retailers use Happy Returns, they end up saving money on return fees because the service aggregates items when making the return, saving as much as 40%.

Elsewhere, Amazon has been crafting an ecosystem, of sorts, for returns — charging fees depending on where the items are returned, and not charging fees at the locations it prefers for that activity to be completed.

As reported this past spring, Amazon customers are now being charged for returns to UPS Stores. The fee applies when a customer returns a product to a UPS Store when they could have returned it to a Whole Foods, Kohl’s or Amazon Fresh location that is within the same geographic distance.

The importance of the returns part of the commerce journey — arguably a point of contact where dissatisfaction is a threat to any future purchases from that merchant — is illuminated by recent data.

As noted in the “2023 Global Digital Shopping Index,” a collaboration between PYMNTS and Cybersource, 96% of all consumers in the U.S. review returns policies before they make a purchase with a retailer, and 66% of consumers are aware of, or have used, returns by mail or in-store.

The heightened awareness and consideration of returns policies offer merchants a chance to stoke consumer satisfaction — Shein’s recent tie up with Forever 21 serves only as one of the most recent reminders.