Online shopping hasn’t just revolutionised the way customers buy; it’s also revolutionised the returns process. During 2022’s peak season, retailers anticipated around 17.9% of orders to be returned, amounting to billions of pounds in lost sales. In fact, over Black Friday 2022 and beyond, we saw a portion of brands adjust their returns policies to diminish the losses to their businesses. Among those to drop free returns were brands such as Zara, Abercrombie & Fitch and fast-fashion retailer Boohoo. Their status will inevitably encourage more e-commerce businesses to follow suit.
Even though big name brands are starting to seek alternatives to the free return model, the fact remains that e-commerce returns are here to stay as a valuable part of the customer service process. The question for e-commerce businesses is this: how can online returns be a) managed, and b) mitigated? The answer must satisfy both retailers’ sales targets and customers’ desire for a positive shopping experience.
In this blog, we’ll take a look at how to balance both, and highlight the opportunities that careful analysis of consumer trends can bring.
The Cost of Online Returns
It’s estimated that returns cost the UK fashion industry £7 billion in 2022. That’s a high price to pay for customer satisfaction; a price accrued from the trend of free returns, conveniently long return windows and lenient criteria on the desired quality of returned goods.
The modern e-commerce customer will often order with the intention of sending part of the order back – a practice referred to as ‘bracketing’. For them, it’s convenient to order an item in multiple sizes and send the unused ones back, and many e-commerce businesses allow for this with their returns policies.
As suboptimal as this buying habit may be for online retailers’ bottom lines, the reality is that returns are vital for the e-commerce industry. They’re an extension of the flexibility that online shopping offers as a whole. According to research conducted by Modern Retail, around half of online shoppers said they abandoned their cart before checkout due to the lack of a convenient returns process. So, for e-commerce businesses, it’s a matter of finding the right way to tackle them.
How to Tackle Customer Returns Efficiently
Returns might be unavoidable – especially during the peak season, when customer service in e-commerce becomes even more important – but a reverse logistics strategy will help you manage them more effectively, ensuring associated losses are mitigated.
The old adage, ‘prevention is the best cure’, rings true when it comes to e-commerce returns. However, preventing them from happening altogether isn’t always possible. This is where reverse logistics comes in handy.
Below are ILG’s top tips for navigating e-commerce returns during peak season and beyond.
Change Your Returns Policy During Busy Shopping Periods
One of our key tips for maximising success during the peak season is to temporarily adjust your returns process to align with the demands of the shopping season. Having a defined strategy here is vital for success – you want to help your profit margins without making a purchase undesirable for the end user.
Free returns are a key offender here for businesses, despite being appealing to customers. During busier periods, you may want to amend your free returns policy to mitigate any potential losses here. The reality is that with more purchases come more returns, so preparing for this on a policy level can be a crucial first step.
Ensure Your Returns Framework Can Handle the Demand
For e-commerce businesses, a returns strategy is not often the first item on the agenda. However, it’s a valuable opportunity. Returns are more than a logistical task; they’re a key component of every online retail brand’s customer service. To turn customers into loyal followers, their experience with a brand’s returns process must be every bit as convenient as the act of buying in the first place.
To achieve this, a comprehensive returns framework and strategy are essential. Reverse logistics are as important as initial fulfilment; they’re a continuation of the brand experience and an opportunity to show your dedication to customers at every touchpoint.
Giving customers a straightforward, transparent and reliable returns process can distinguish your brand from your competitors. It sounds counterintuitive – after all, in an ideal world, you want customers to keep and enjoy their purchases from you. But showing them that you’re there for them, even if they change their mind about their purchase, encourages loyalty and makes your business the first name on their minds when they’re ready to buy again.
Lean on Customer Data to Optimise Your Return Rate
E-commerce giants like ASOS and Amazon lead the way when it comes to handling reverse logistics. One of the key ways they’re set up for success – even when customers send goods back – is the way they collect data on customer returns.
Asking the customer to provide a reason for the return can give retailers – and, by extension, their fulfilment partner – valuable insights into customer behaviour. The simple act of asking a customer to select a reason for their return can help to identify any actionable pain points. For example, there’s a big difference between a customer returning an item because they ordered the wrong size, and returning it because it was damaged during fulfilment. Analysing such data behind the returns can help businesses improve their products and service, and enable their fulfilment partner to operate more efficiently.
Furthermore, collecting and acting on the insights from returns data can serve to reduce the volume of returns in the long run. Many 3PL providers often use their custom technological infrastructure to provide this capacity to clients, resulting in a better-integrated customer experience throughout the fulfilment process. In a world in which returns are more accessible than ever for the end user, this is vital for e-commerce businesses.
Partner with a 3PL with Reverse Logistics Expertise
Getting started with a trustworthy returns strategy can be as simple as choosing a reliable fulfilment partner. A 3PL that excels at every stage of the fulfilment process, from picking and packing to managing returns, can be the difference between successful customer service and a missed opportunity.
At ILG, we specialise in complete fulfilment for fashion, beauty and wellbeing brands. Our adaptive approach to fulfilment strategy is bespoke to each of our clients so your customers have what they need, when they need it.
If you’re interested in learning more, we’d love to hear from you. Contact us today to get started.