Are you losing money and customers through inefficient retail returns handling?
With a dramatic increase in retail returns, the spotlight is now firmly on the efficiency of ecommerce returns process.
With a growing number of shoppers shunning traditional stores in favour of buying online, bedrooms have become the new changing rooms and retail returns are at an all time high. Up to a third of all online purchases are returned, with research showing that 19% of UK adults buy items with the intention of returning them, and 25% of consumers return items three or more times. This change is putting a huge strain on online retailers and the spotlight is now firmly on the efficiency of ecommerce returns process.
Shopping is a physical experience, and one that online stores just cannot match. Before making the decision to buy, customers want to feel fabrics, see how a piece fits, decide if the colour suits them and whether it’s well made or not. No matter how many photos or videos of an item a retailer showcases, it will never be a substitute for seeing that piece in person and being able to try it on. This is the reason why a hassle free customer returns service is an integral part of any online fashion business, but it’s a system which needs to be carefully managed to avoid unnecessary expense for retailers.
The convenience of the returns service for items bought online
Without the ability to try pieces on before purchasing, many customers will order multiple sizes and colours of the same item to try on before deciding which, if any, to keep. They may also order a number of similar items, with the intention of only keeping their favourite one. The luxury of being able to make this decision from the comfort of their own home can mean that shoppers over order, or order impulse items that they then realise they don’t want or need.
Minimum order values can also be a reason for customers over ordering. With an easy customer returns process, shoppers are increasingly likely to order items which they don’t want in order to meet the minimum amount and qualify for free shipping.
All of these retail returns cut into profits, both in terms of wasted product and in the time and effort required to get these items ready for sale again. Retailers need to pay close attention to the spending habits of their customers and begin to develop a better understanding of their needs and expectations. By looking into the core reasons why customers return items, businesses can take steps to help counter them and ultimately reduce the number of returns they receive.
Where money is lost in an inefficient customer returns process
Every item that is returned needs to be thoroughly checked for signs of wear before being reintroduced back into the inventory, as many of these pieces may not arrive back in a saleable condition. There may be obvious signs of wear, makeup and deodorant stains, rips and snags, popped stitching or even pieces that simply just come back smelling stale or of perfume.
Small stains can be removed and items can be freshened up, but around 5% of returns end up being discarded. Even items which arrive back in good condition will still need to be repackaged ready for sale. For retailers with an inefficient returns handling system, these pieces may already be out of season or have gone on sale by the time they have been processed. This reduces their value to retailers even further. For some items this could mean it is then more cost-effective to simply dispose of them, rather than take on the cost of getting them back into circulation.
Many retailers do not have an efficient enough process in place to effectively deal with a large volume of ecommerce returns, and disposal of these items is often highly inefficient. This is not only a waste of time and stock, but a missed opportunity to maximise value and get the most out of each product.
As a retailer, does your current customer returns process:
- get goods back into circulation before seasonal changes?
- dispose of damaged or unsellable items in a cost-effective way?
- automate the process where possible to reduce time and labour?
- effectively manage large numbers of ecommerce returns in an economical way?
How poor ecommerce returns management can impact customer satisfaction
An inefficient ecommerce returns service can also have a negative effect on customer experience. Shoppers have come to expect hassle free retail returns handling when buying online, they want returns to be processed quickly and to see their refunds back in their account as soon as possible.
66% of customers will check a store’s return policy before buying online and 81% say they will only complete the purchase if the store offers free returns. Those who have had a frustrating or costly experience returning unwanted items are likely to think twice before placing another order in the future.
Retailers are now faced with the challenge of finding a way to expertly balance customer experience with an efficient and low cost returns handling system. Speed and efficiency are the key to this problem. Taking steps to speed up the process of returns not only creates happier customers, but also savings too. Items which are processed quickly retain their value and can be promptly restocked and resold, minimising waste and maximising profit.
Find out how we work closely with retailers to provide an effective customer returns service or call for a free health check of your returns handling on 01455 200 700.