Trends & Features

Retailers braced for the next pandemic – Returns!

Spurred on by the global pandemic and subsequent lockdown, eCommerce sales rocketed to a ten-year high back in May, and with much of the country still in lockdown over peak season, online sales are set to soar again. This means only one thing heading into the new year – Returns.

Retailers are currently battling rising returns rates of over 50%. Considering returns cost retailers £60bn per year, it is no surprise returns can have a very damaging effect on the bottom line. As we approach 2021 not only are returns expected to rise, but online competition is growing too. Retailers need to find efficiencies in their returns process not only to protect their margins, but to encourage customers to shop with them and clinch the sale too.

Why has the returns process often been neglected?

Returns are a huge operational challenge, yet they are often a neglected part of the eCommerce process. Whilst a lot of emphasis is placed on the delivery experience, returns have remained an afterthought. In some cases, a complex returns process has even been used as a way of discouraging customers from returning items in the first place. This is a strategy that retailers can no longer adopt however, as a bad returns service has the potential to drive customers away. Research conducted by UPS has found that up to 79% of consumers check the returns policy before committing to a final purchase, and as many as 1 in 2 abandon a cart if they deem the returns service to be unfriendly.

Global Freight Solutions

What is the main challenge with returns?

Lack of visibility is often the biggest challenge with returns. Shipping hundreds of orders with no idea of how many might produce a return, where they might be coming from or why they are being returned means that retailers can quickly find themselves battling a barrage of returned parcels with little or no information surrounding them. The result? Stock gets tied up and causes big delays. This is not only costly for the retailer, but a poor experience for the customer risks them not coming back.

What do consumers want in a returns process?

It should come as no surprise that today’s customer deems making a return a natural part of online shopping. A good returns’ service safeguards them should there be any breakages or damages in transit. It also reassures them over ordering items they have been unable to see or touch. As a result, 32% of consumers now deliberately over-order items with the intention of returning some. These so-called ‘serial shoppers’ are commonplace in fashion as ordering multiple sizes means they can guarantee they get the right fit.

All this means that customers are looking for simplicity when it comes to returns. They look not only for convenient options to return their item, (i.e., Courier, drop off point, post office), but a convenient way to request their return. Retailers should therefore be offering a secure and simple platform for customers to request their return through, before going on to provide updates on when the return has been logged, when it has it been received and, the million dollar consumer question – ‘when can I expect a refund or exchange?’

Facing the challenges of international returns

International returns are an even bigger challenge for retailers and particularly so for SME’s who often don’t have warehouses worldwide or access to the most competitive carrier rates.
Add into the mix the complexities of tax and duty payments and cross border returns become even more burdensome.

Duty payments are accounted for on the outbound leg but not on the return, and incorrect documentation at customs risks landing the retailer with a hefty fine. Consumers are savvy when it comes to duty payments too, and 68% of customers check whether any duties are to be paid. Transparency over how you handle duty payments will really help to inspire confidence in your customers at the point of purchase.

Cost-effective and customer winning: the perfect Returns combination

As online sales continue to soar, it should be expected returns will follow suit. One does not operate without the other. This means that returns need to be treated as an equal player to deliveries and managed with maximum efficiency.

Keeping the costs down and the sales up is a big challenge for any sized retailer, but especially so for SME’s who often lack the tools and resources to compete against bigger retailers. This is why GFS are launching GFS Global Returns Pro. This single solution integrates 200+ multi-carrier services with a global technology platform for one monthly fee – helping to ensure consumers receive an excellent service no matter where they are in the world. A hassle-free customer portal means consumers can request returns in seconds, and integrated tax and duty documentation provides peace of mind that there will be no unexpected costs for either party.

92% of customers who have a good returns experience go on to make another purchase.* Mastering the returns process may seem like a daunting task but manage them effectively and not only will you reach more customers, you will be encouraging more loyal ones too.

*IMRG returns review

Bobbie Ttooulis is executive director of Global Freight Solutions, a UK-based multi-carrier shipping and e-commerce delivery company.

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