Av Trimble smartdelivery | Article | March 22, 2019

New customer demands for advanced returns

A growing trend is the preference for online shopping among British consumers. According to the 2018 B2C eCommerce Report, 16.4 percent of retail sales happen online while e-commerce has registered a 13.65 percent growth rate. By 2022, fifty million British consumers are expected to shop online.

Ever increasing consumer demands

With a Nielsen study showing 95 percent of shoppers in the U.K. buying products online, the sales turnover which is currently at 13,739 million GBP is all set to increase in the coming years. Cost advantages, tools that enable comparison of prices and features of products and level of choice are the major reasons why consumers are turning to e-commerce to buy products that they would previously have purchased in-store.

The study showed consumers are encouraged to shop online when the retailer offers:

  • money-back guarantee for product mismatch
  • same day delivery and replacement services for products not available
  • free delivery above a certain spend
  • a choice of delivery options
  • same day response to product or service queries
  • a hassle free returns experience

Clearly, customers’ expectations concerning both delivery and returns are becoming more and more demanding. The cost, the mode and the turnaround time for returns are the most important factors that influence buying decisions.

Close to 67 percent of online shoppers check the returns page before they make a purchase and 92 percent of shoppers are willing to buy a product again if the return process is easy.

While a majority expect free shipping for returns, 58 percent of consumers also prefer a “no questions asked” policy on returns and 47 percent of shoppers would not buy a product if the there is no “free returns” policy.

Challenges of returns

Although it is obvious that offering easy returns to consumers can help retailers drive sales, managing returns is not without challenges. While bigger retailers have the necessary resources to tackle returns while absorbing costs, this usually is not the case for smaller retailers.

Processing returns, according to a recent estimate, cost £60 billion annually for U.K. retailers. According to a Barclaycard survey, close to one-third of retailers said returns process management impacted their profit margins. The same survey also showed 30 percent of consumers over order because they know they can return the ones they do not need and 19% of shoppers order multiple versions of a product, so that they can later decide which version to keep.

More than a third of retailers have witnessed an increase in the number of serial returners in 2018 where customers regularly and deliberately buy multiple products only to return some of them.

The increasing demands on returns pose multiple challenges to businesses. While returns double the cost of logistics with free shipping and reverse-logistics, there is reduced or zero turnover and at times, negative customer feedback. If the returns process is not handled as per the customers’ expectations, they typically share their negative experience on various social networks while posting negative comments on the retailer’s website that further hampers the brand reputation.

Leveraging the right technology

Returns management being a critical function in all retail sectors, businesses need to derive an efficient solution that ensures a smooth returns experience for shoppers. An accelerated availability of products that are returned, rapid returns service, customer-centric approach, providing clear product descriptions are some strategies that can help manage the growing demand on returns.

One of the critical problems in serial returns is that most retailers currently do not have relevant technologies in place that enables them to identify or track serial return trends. Close to 59 percent of retailers stated in a survey that they were not able to identify serial returning customers. By harnessing the right technology, brands can gain valuable data insights while tracking shopping behaviors which will enable the development of streamlined returns policies and processes.

In the digital era, technology solutions may be the only way ahead to strengthen the supply chain and reverse logistics, track consumer behavior while making intelligent business decisions.