Online return policies pose a unique challenge for retailers, asking them to balance bottom line cost efficiency with customer satisfaction, and it is without a doubt set to become the next big battleground within the ecommerce market.
While the growth of online shopping shows no sign of letting up, neither does the rate at which online purchases are returned.
For every online purchase delivered, about 15-20% are sent back; rising to around 50% for the fashion industry. In 2012, returned products cost global ecommerce retailers in excess of £120bn in cash and lost profits. This doesn‘t take into consideration loss that has come about from poor customer experience. Give a customer in this competitive market a poor experience once, and you could lose them forever.
Consumers today need and want convenience, seamless service and good customer care. They find themselves under increasing time constraints and no longer want to – or are able to – plan their day around receiving and returning online purchases. Increasingly time-poor consumers are part of the reason why online shopping itself continues to grow.
The goal for retailers must be to minimise the perceived inconvenience and ultimate cost associated with returns by offering numerous and flexible reverse logistics solutions.
With in-store, convenience store, postal returns and automated parcel lockers available as returns solutions, customers and retailers have a wide range of options at their disposal, which should ultimately help support long term growth in ecommerce as a whole.
Online retailers need to offer a simple and cost-effective return process and take into consideration the cost of lost business as a result of poor customer experience. They should also use the online returns process as an opportunity to capture data and create valuable customer insight that will help them to understand customers‘ returns needs in more depth.
The rise of social media, which is used by consumers – when interacting with brands – mainly as a communication channel to publicly air grievances about poor delivery and returns experiences, means that a retailer‘s reputation is made public for all to see. For this reason, it‘s even more important that the best online return solutions are in place to protect it.
The retail and delivery industries need to keep evolving to ensure they give the best possible customer experience at the lowest possible cost. Who will win the battle? My money is on the retailers who seek out new solutions and embrace and adapt them early on.
Jonathan Smith, Chairman of InPost UK