With a finite capability to meet the demands of today’s “I want it now” consumers, retailers need to consider what matters most - is it speed, convenience or free delivery?
If you run an omnichannel operation, you may find returns to be the necessary evil that you’d rather not consider as part of the customer journey. Not only are returns an integral part of that journey, they’re also an opportunity to provide a brilliant omnichannel experience.
This article explains some of the strategies to mitigate the volume of online retail returns, cope with the costs, and to make the returns experience smoother for the retailer and the shopper.
A forgotten piece of the customer journey
Focusing on the customer’s journey towards purchase and delivery is often the centrepiece of omnichannel strategy. After all, there is much to be gained from omnichannel strategy implemented into the purchase and delivery aspects of a customer’s journey.
An often-neglected extension of a seamless and integrated omnichannel experience is customer returns. Implemented and managed well, a returns strategy can have an enormous and underestimated impact on enhancing customer satisfaction, creating opportunities for repeat purchases, customer loyalty and fantastic brand exposure on social media and other platforms.
Friction and fissures
Returns creates friction in the customer’s journey. To optimise customer satisfaction this friction needs to be removed, or, at the very least kept to a minimum. To create a unified brand experience returns must be incorporated into the customer’s journey, creating a holistic omnichannel experience covering purchase, delivery and returns.
Retailers should consider complementing the purchase and delivery aspects of the customer journey by empowering customers with the ability to return products free of charge, simply and conveniently.
According to research from UPS, 66% of online shoppers want to be able to return items free, 58% want a hassle-free return policy and 47% want an easy-to-print returns label. The implementation of hassle free returns can therefore become a unique selling point, offering retailers advantage over their competitors who are not offering such services.
Returns are an expensive part of any businesses operation. The management and facilitation of the returns process is a significant overhead for retailers, with 30% of retailers choosing to charge for delivery to offset the costs of returns, with 20 per cent of retailers increasing the price of items to cover the cost of returns.
According to Iain Prince, supply chain director at KPMG ‘it can cost double the amount for a product to be returned into the supply chain as it does to deliver it’. With returns creating such a huge drain on resources, the necessity for analysing returns and implementing an efficient returns process that benefits both company and customer is clear.
But remember: They’re not going away.
Returns are here to stay
With shoppers returning more products than ever, retailers are having to focus on managing returns as a key factor to success. Royal Mail reports that its returns volumes have grown by 24% in the past year.
The increase in returns is in part due to the increase in retailers offering a free, no hassle returns policy. Consider says the Raconteur that ‘two-thirds of customers buying women’s clothes in the past six months have returned at least one garment. Some are taking advantage of free returns to order multiple versions of the same item to see which fits better’.
In addition to this, customers are receiving free shipping on their initial order by ordering multiple quantities with the intention of returning items. A study for Barclaycard shows six in ten retailers had suffered from this rate of return and three in ten say returns hit profits.
But it’s not all bad news: There are some tried and tested solutions to relieve the pressure of returns.
Solutions to consider
Some retailers have adopted a business model that charges customers an annual delivery charge, in return for unlimited delivery. For example, Next Unlimited charges customers £20 a year for unlimited standard next-day home delivery, ASOS Premier Delivery charges customers £9.95 a year for unlimited next-day delivery and Amazon Prime charges £79 a year for unlimited next-day and in some cases same-day delivery on an unlimited number of items.
Such an approach encourages multiple purchases at the risk of multiplying returns, a model that is only sustainable with an optimised and controlled end-to end supply chain.
The rapid rise of online retail as the preferred point of contact is also to be held accountable for the growth in returns. Without being able to touch, feel and try a product before purchase, customers buying online often receive products that aren’t as expected or don’t fit. In store shoppers can simply pick up an item, try it on, smell it, feel the material and know exactly what it is they are getting before purchase.
Online encourages a culture of shoppers who are not 100% sure of what they’re buying, but still buying items as there is the facility to return the item. This is perfectly acceptable practice providing that retailers have adequate systems and processes in place to facilitate returns management.
If adequate systems and processes are not in place it will lead to friction in the customers journey, leading to no repeat purchases, no customer loyalty and poor brand exposure on social media and other platforms.
Retailers can also be pro-active with returns in an attempt to minimise returns traffic, through practises such an analysis and adjustment of their online stock listing. By taking simple steps such as including detailed product descriptions and sizing advice, retailers can help customers to buy the right product without the need for returns.
For example, consider the likes of Superdry, Sweaty Beatty and Zara who list their products with detailed product information, size guides, videos and plenty of pictures instead of just basic information.
Undeniably, there will always be returns because of faulty products or due to mispicks, yet by helping customers to know exactly what it is that they are purchasing through detailed copy, product videos and photos for example, returns can be reduced helping to achieve great brand unification.
An analysis of why products are being returned is a learning curve, which should be implemented. Retailers can understand why products are being returned and address the common problems. For example, if customers continually return a particular product, perhaps the product listing needs to be adjusted or the quality of the product needs to be addressed by working with a supplier to improve the product.
How to make returns a successful part of the omnichannel experience
Consider a 4-step process to implementing excellence in online retail returns:
Start by giving customers the power to self-service returns as much as possible online. Not only does this have the cost and time saving benefit of reducing call handling and the administration required when the goods are received back into the supply chain. This also gives customers the power to do business on their terms and in their time.For example, let the customer log into an online account to start their returns process. They can select the product they want to return and select the item/s to return to start the process.
Issue customers with an RMA (Return Materials Authorisation) label as part of the delivery process or make this available for download online. Then if the product needs to be returned, the customer has the return address, and a readymade label helping to create a hassle free returns process for the customer. This also helps the business keep track of the RMA when the product is received back into the supply-chain.
Next, reverse the delivery logistics. Just as customers can collect their parcel with a great degree of flexibility, let the customer drop off the returned product at a place convenient to them. For example, a locker, a shop or a pick-up point such as their place of work.
Make sure returns are free. If competitors offer this and your company does not, it will affect whom the customer shops with.
Finally, through true visibility of the supply chain, online retail businesses can optimise returns. Returns are an opportunity to create a gateway to omnichannel excellence that cannot be overlooked.
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