Online shopping has grown dramatically, with more of us choosing to shop from home and have our purchases delivered to the door. Ecommerce solutions have been a life-saver for the many retailers who had to shut the doors on their brick and mortar retail stores. It looks set to be a long-term trend for shoppers, who love the convenience and don’t seem to be planning to leave their screens any time soon.

The growth in ecommerce solutions also leads to an increase in returns –  and retailers’ returns processes are now a key element in creating a positive customer experience and protecting revenue.

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Online growth = returns growth

Online shopping has always had a higher rate of returns than brick and mortar – according to industry analysts Retail Dive, whilst store returns sit at 9%, online returns are more than double this rate at around 20%.

Not surprisingly, the retail segment most impacted is fashion, but returns hit every online retailer to some extent. The reasons most commonly cited are that goods have been damaged in transit, or that they don’t match the description on the website.  Up to one third of shoppers over-order –  purchasing multiple items, with the intent of sending some back.

A retailer’s returns policy has a significant impact on the customer experience and is a big factor in a whether that customer buys again. It’s no exaggeration to say that returns can make or break customer loyalty, so not offering returns, or having a complex process, is simply not a viable option.

According to the  Pulse of the Online Shopper survey carried out by UPS,  68% of shoppers view returns policies before placing a sales order. Metapack’s Guide to Returns found that 50% of shoppers had abandoned a purchase due to a lack of choice of returns channels, and 56% of consumers had been deterred from shopping due to a retailer’s returns policies.

When customers know it will be easy to return goods, they are more likely to purchase. If they have a good customer experience with returns, 92% will buy again, but a bad customer experience when returning goods means many won’t buy from that retail store again. Younger shoppers are more demanding, with 60% of 18-25s saying a bad returns customer experience would lose their business, reducing to 30% in the 65+ age bracket.

Retailers have to accept that the need for a customer-friendly, smooth, fast and seamless returns process is essential to the retention and lifetime value of the customer.

What do shoppers want from a ‘good’ returns policy?

Firstly, shoppers want a choice of how to return – via post office and back to the store tend to be the most popular, but opinions do differ by country, so retailers need policies that are flexible enough to adapt to the local market.  Customers concerned about the environmental impact of returns favour the option to return to a central return point. Others are willing to pay for a premium service, such as a booked time-slot for courier pick up.

All want returns to be easy (for example, a returns label sent with the goods), some want a choice between cash refund, exchange or gift card, and no-one wants to wait – the vast majority expect to have their money back within 30 days.

Considerations for a smooth returns process

When planning a returns policy, online/offline integration is the key. Returns cannot be seen as a separate process, but must be a part of retailers’ ecommerce solutions and overall customer experience. Considerations when choosing retail software for ecommerce solutions that manage returns include:

  • Single stock pool and inventory visibility,so that returns can readily be made available for resale.
  • Flexibility to return goods online or in store, regardless of whether the purchase was digital, in the brick and mortar store or via a hybrid channel such as BOPIS/Click and Collect, or Curbside Pickup.
  • Cross selling and upselling – customers who return to store will often spend more.

  • Loyalty program integration – to manage points for purchased and returned goods.

  • Insights into the performance of your returns policy, with smart analysis and reporting.

With online shopping now the new normal, retailers who want to attract and retain online shoppers must see their returns policy as an essential part of their customer experience offering.

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