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Overcoming the Returns Challenge

E-commerce returns are one of the biggest logistics challenges facing retailers today. Retailers can lose up to a massive £60bn per year trying to overcome the… View Article


Overcoming the Returns Challenge

E-commerce returns are one of the biggest logistics challenges facing retailers today. Retailers can lose up to a massive £60bn per year trying to overcome the complexities of managing a reverse supply chain*. The main problem being that returns provide little visibility to the retailer. Being left in the dark over what’s being returned and why until it arrives can lead to wide gaps in the supply chain, leaving many playing ‘catch up’.

Right now, retailers are gearing up for a Christmas like no other. The on-going pandemic and threat of further lockdowns mean consumers are less likely to hit the shops than before, opting to do their shopping online instead. Any surge in deliveries mean a surge in returns – one does not operate without the other. 42% of shoppers returned something in the last year and some suggest up to a third of margins can be lost if the returns process is neglected*. Retailers must act now to ensure they have the right measures in place.

Returns options which will delight online shoppers

 Online shopping leaves customers with no way of physically seeing, touching or trying on items before they buy them, so it is no surprise returns are important to customers. As many as 78% check the returns policy before making a purchase*. As such, they want to know it will be as easy to return an item as it was to order it. This means retailers must provide a range of returns options which slot seamlessly into busy lives, such as courier collection or in-store drop off. Giving customers more control over how they return items means they can pick the one that works best for them, helping to reduce those much-dreaded abandoned baskets.

Having chosen their preferred way of returning the item, consumers then expect regular updates on their shipment, their number one concern being ‘When can I expect my refund?’. Having maximum visibility over all your shipments will be essential in providing your customers with the information they require and will leave you dealing with less queries. Better tracking will also help you anticipate potential hold ups or issues in your supply chain meaning you can source extra contingency in the areas you need it most, helping to avoid costly delays.

Cracking the international returns challenge

Duty and tax implications as well as varying consumer behaviours make cross-border returns a much harder nut to crack. Some international markets are particularly sensitive to returns. 77% of shoppers in Spain say an easier returns process would encourage them to shop with a retailer, in China this number increases to 85%*. Retailers must take the time to understand their international markets and tailor their returns accordingly.

The area where it is easiest to become unstuck is around duty payments and documentation. Not having the right documentation could risk a hefty fine. Putting the right measures in place to avoid this is essential, especially for retailers who might already be operating on tight margins.

Consumers want to avoid any nasty surprises too, so 68% of them now check if any duties are to be paid*. Retailers can help alleviate this anxiety for their customers by adopting a more transparent approach. Whether they choose to include the duty payment in the overall purchase price, or provide an estimate of what will be due on delivery – showing that you have considered their concerns as part of your returns process will go a long way in reassuring international customers.

A simple and cost-effective solution to help shed light on returns

For a successful process, returns need to be an integrated, fully branded part of the customer experience. Retailers need to provide a range of convenient returns options for their customers. They need to be flexible and agile enough to grow with demand, whilst still providing the same level of service to their customers no matter where they are in the world. Using complex returns logistics as a barrier to prevent returns is no longer an option. Instead, retailers need to find a cost-effective solution to provide the best consumer experience whilst minimising the operational impact to them.

For many retailers, the solution is to work with multiple carriers. Doing so means you can access the range of services that the consumer requires, and it also provides that extra safety net for you should any problems arise. Working with a multi-carrier and logistics expert would further reduce the operational pressures by managing pick-up times, contracts and carrier relationships on the retailer’s behalf under one cost. Partnering this with technology which allows better supply chain visibility will ensure that retailers can easily track their shipments and identify bottlenecks early enough to respond – finally shedding light on the returns process.

*IMRG returns review 2020

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