IMRG examines returns
The IMRG 2020 Returns Review, supported by Metapack Returns, examines the developing expectations of shoppers and increasing challenges for retailers to make Returns work.
It is motivated by the increasing importance of Returns Logistics to the eCommerce industry and intends to take an ongoing and comprehensive look at the issue of returns logistics and the challenge of how to make them operationally, commercially and environmentally sustainable.
Despite all that has been written, over the past ten years or so, returns remain the unwelcome poor relation of online logistics, with shoppers consistently rating their satisfaction with returns below their satisfaction with the initial delivery.
This picture is confirmed in Metpack’s The Global eCommerce Consumer Research Series 2020 which shows:
- Very satisfied – 11%
- Satisfied – 33%
- Somewhat satisfied – 25%
In addition, the UPS Pulse of the Online Shopper survey (2019), reports that only 61% of shoppers are generally satisfied with returns. The main reasons for dissatisfaction identified by this survey are:
- Delay in refund – 25% of respondents
- Paid returns – 24% of respondents
This satisfaction gap is because, although returns are now firmly part of the eCommerce process, it is only relatively recently that returns systems, processes and policies have begun to receive the same care and priority provided to the original dispatch of an online order.
Initially the general strategy was to discourage returns, often using the logistics process as a barrier but this view has evolved and now most retailers recognise that a good returns offer will encourage conversion and drive shopper loyalty and life-time value.
As such, achieving excellence in returns logistics provides strategic opportunity and a basis for competitive differentiation, meaning that returns are set to be a battlefield for innovation.
Recommendations
Returns are here to stay and impact the whole business so when setting up a returns offer it is important to look at this as an opportunity and to involve the whole business. This is not just a logistics and operations issue, so it is important that all other stakeholders are involved – Customer Experience, the Product Team, Marketing, Finance and IT.
Then consider the following:
1. Poor management of returns erodes your margins. Shoppers over purchase with the expectation of returning unwanted items. Retailers can get ahead of this by putting in place a robust returns management process.
2.Have a clear Returns Policy
- Promote it early, openly and in plain language on multiple pages
- Have a simple process, that is easy to execute
- Consider extending returns windows
- Be transparent – provide expected refund speed, status of return, tracking
- Assess the business case for paid or free
3.Use a Portal and move away from In-Box returns.
- Reduce unnecessary or uneconomic returns
- Get early warning to allow routing and resource management
- Understand signalled returns that never materialise
- Increase customer engagement
- Reduce shipping costs with managed consolidation and channel allocation
- Speed up refunds
- Anticipate customer behaviour
- Spot fraud
4.Establish multiple returns channels – customers expect to be able to shop through different channels and get the same high level of experience. Returns are part of this and deserve the same attention.
5.Monitor and Measure – not all customers and not all returns are the same.
6.Don’t be afraid of challenging serial returners.
7.Track returns progress and actively communicate.
8.Find specialist partners to enhance returns logistics capability and to provide higher value disposal channels, especially in cross-border markets.
