Succeeding in the online retail space is a tricky business. To ring the register you need to:
- Have a solid marketing program that keeps your brand in front of the customer so you’re the destination they choose to browse.
- Have the goods a customer wants at the price they want to pay so you can convert them from browser to buyer.
- Get their purchase to them expertly – on time and unharmed by the package eating ecosystem that lurks in between your warehouse and their doorstep.
But wait, you’re not done yet! According to several online sources including the WSJ, ABC News and BusinessWeek up to 1/3 of all online purchases come back as returns and – as with all trends in the B2C space nowadays – customers have high expectations that must be successfully met to ensure they don’t defect. This round trip part of the buying experience needs to be embraced by your ecommerce fulfillment service provider to ensure customers stay satisfied, and with industry giants including Amazon and Apple investing heavily in their capabilities to excel in this area the bar is being for all providers.
After the peak Holiday sales frenzy has ended the next battle begins. Coping with an onslaught of customer returns in January is as certain as death and taxes, and no less despised a topic by fulfillment service providers and online retail professionals alike. From the report 2013 Consumer Trends in the Retail Industry published by The Retail Equation, an NRF member, we can see the scale of this issue is huge. At over $270 billion dollars industrywide if all of these transactions were income realized by one company it would be ranked #3 on the Inc. 500 list.
While industry experts report the overall industry returns rate is holding steady between 8 and 9% online retailers often have significantly higher return rates – particular soft-goods resellers like fashion or apparel brands. These returns result from a few significant trends unique to the online ecosystem:
- Renters – Some returns happen because a customer makes a purchase, enjoys the purchase, and then no longer has any need for the purchase. This practice results in goods that aren’t able to be resold and is a serious concern for both retailers and logistics companies.
- Fitting roomers – If a customer has size or color choices, be prepared for a segment of your clientele to exhibit the classic, “let me take four things to the dressing room so I can decide which one I want” technique. Substitute “their house” for “dressing room” and extend the timeline to about two weeks and you’ve met our next returns customer – the fitting-roomer.
- Browsers – hard as it may be to believe, some customers are making purchases just to try new items out. Traditional window-shoppers could spend an afternoon enjoying the experience of trying on the newest, latest and greatest and walk away fulfilled without buying anything. Rest assured there are online shoppers who still honor this tradition albeit in a new-fangled way.
Coping with the unique challenges of the online environment is easy, if you can incorporate a few key best practices into your reverse logistics repertoire.
- Make returns easy: Zappos’ zero hassle return program may be aspirational for some retailers, but within your limits, make sure you ease any concerns your customers might have about the stress of returns by publishing your return policy on your site, on pack slips and in correspondence. Make the policy clear, avoid jargon, and simple.
- Be timely: According to StellaService 73% of customers expect a return will be processed in 7 days or less. Remember the clock is ticking while the package is in transit, so shipping takes 5 days you only have 2 days to process the return. Amazon and Apple have responded to this need in innovative ways. Amazon often issues the credit for a purchase while it’s still in transit. Apple, on the other hand, is improving the customer experience by offering 2-day shipping to expedite the in-transit time so they can speed up the returns process for their customers.
- Over communicate: I haven’t met a customer who told me they wished their online retailer emailed them less information about their transactions. Just like sending mails to advise the order was received and then again to indicate that the order has been shipped, consider sending emails to customers at all of the milestones in the returns process including
- Return shipping label issued
- Return received
- Return accepted
- Credit processed (or an update if issuing the credit has been delayed for any reason with a new timeframe outlined)
- Request for feedback on their experience.
- Be lenient: As you’re processing returns be sure to consider the lifetime value of the customer and make strategic decisions about accepting damaged returns, returns received after your stated window, or generally anything that might be considered a fringe case. Rants in social channels, negative feedback on your site, and the defection of otherwise loyal customers can add up quickly. Keeping the big picture in mind may justify extending courtesy where it pays dividends.
- Think like a customer: If your business spans the online and offline marketplaces make sure your customers know they can leverage this to return or exchange products via the most convenient channel. This not only provides benefit to the customer, it may just help you by allowing you to offer store credit, an exchange, or to possibly sell something else to the customer during this transaction.
- Pre-sale support: Sometimes the best defense against returns is to make sure the customer makes the right purchase in the first place. Don’t underestimate the value of good content that clearly demonstrates the features and benefits, multiple images per product and/or short videos, product reviews from other customers giving real-world feedback about the item, and size and fit guides. If you can help the customer make an informed buying decision you can greatly reduce the risk that they’ll need to return the product.
- Optimize your operation: In order to deliver the most expedient refunds your warehousing team needs to be optimized to handle them efficiently. Capabilities like dedicated staff to manage returns, packaging that allows for items to be easily reconstituted for resale, and workflows that make a returns area of your fulfillment center a potential pick location so you can save the effort of restocking the items all help to make returns as painless for you as you’re trying to make them for the customer.
Keeping customers happy with every facet of their purchasing experience is no small chore, but the investment in a solid returns processing component can go a long way to ensure your deliver excellence to your customers and keep them coming back.