Analysis

Opinion: Returns – an essential differentiator on the ecommerce battleground

returns

Paul Durkin, director of home and efulfilment at Wincanton, talks about the best ways to handle the growing deluge of returns.

Online shopping is now an everyday activity for consumers. We’ve become used to being no more than a few clicks away from our favourite products, and advances in delivery options mean that consumers can receive their goods in a matter of hours in some cases.

But the arrival of a package is not always the end of the journey, with returns increasingly important. The average UK consumer spends £313 each year on clothes alone, returning £146 worth (47%) of that according to an Optoro report, so getting unwanted goods back to where they came from smoothly is vital in an increasingly competitive retail market.

A recent Barclaycard report revealed that 89% of shoppers check a brand’s returns policy before they make a purchase online, with 69% of UK consumers expecting them for free.

These stats show that returns make sense for the consumer, but retailers are left to absorb the majority of the expense. The cost of getting goods into the hands of another customer eats away at margins, while having stock off of the virtual shelf reduces the potential for sales.

So, a balance has to be struck. Retailers need to match consumers’ returns expectations, but also limit the financial impact on their own business. How can they do this?

One option is simply to reduce the number of returns people are making. Working out why customers are sending goods back can reduce the problem at source. Is a shirt being returned due to confusion over sizing? Is the colour of a vase markedly different to how it appears online? If items don’t match expectations, the risk of returns increases.

Returns can be unavoidable, but if the customer is encouraged to make the return at a physical store, the item can be quickly assessed and put back into stock. There’s a need to incentivise the customer to go out of their way to visit the location, but offers such as free in-store returns and the promise of an immediate refund can be tempting. Attracting a customer to the store may also encourage a subsequent purchase.

Physical returns are not always possible though. Many retailers are online only, while big, bulky goods cannot be easily transported to a shop. An online portal that allows consumers to select specific pick-up times is an option to overcome this. It’s more convenient for the consumer and increases visibility of stock for the retailer.

It’s important to be flexible around returns. Having the option to quickly consolidate, refurbish, locally redistribute, recycle, or even resell stock internationally can keep costs down. Investing in the right technology increases visibility of products that are off of the shelf, cutting down unnecessary movements and keeping items available to customers.

Returns are as important to the consumer as delivery options. Finding the right solution to ensure customers benefit from a good experience while minimising costs could be the differentiator your business needs.

Opinion: Why offering free returns is an ecommerce no-brainer

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