Returns: Prepare, Profit, and Preempt
Expecting to ship 1.3 million returns, UPS has dubbed today “National Returns Day.” This week UPS alone will return 5.8 million parcels, up 16% from last year.
The truth is, peak season for retailers does not end with holiday gift purchases and giving. Digital platforms, customer care, and logistics operations all struggle to accommodate this reverse flow that costs US retailers over $250 billion.
This serves as an opportunity to plan and stay one step ahead (and Arise can help).
Prepare: Just like buying, returning happens on consumer terms. Anytime, any device, to/from any channel, and (increasingly) for any reason. And just like dealing with the purchase wave during peak shopping, retailers and e-commerce merchants face uncertainty when handing returns. “Plan and pray” is not the answer. Building in flexibility and tapping a range of internal and external resources is. Each returner has questions to be answered, needs to address, and choices about which channel to use. These are moments made for empathy and influence – only if there’s someone to answer the phone, respond to the chat, or take the package in a store.
Profit: Returns can be part of the next transaction – immediately, if the return involves an exchange or additional “attachment” when executed in-store (digital think tank L2 estimates that in-store returns generate an 18% attach rate); or over the long term, if the experience causes the returner to view it as a positive rather than negative brand interaction (think of Costco’s “zero hassles” returns in-warehouse, or Zappos' insanely generous policies). But this transaction continuation requires retailers to get consumers into the right channel, and to engage them with personnel who understand their needs.
Preempt: Returns are unavoidable, but not unmanageable. The top investment brands and retailers can make in reducing returns is to stop them at the source – make it easier to access substantive service during the initial purchase, across all channels. Of the 9 top reasons for product returns cited by ChargeBacks911, many can be ameliorated through better care and communication: #1, bought wrong item (functional misfit); #2, product no longer needed; #4, customer wasn’t familiar with the product (tried something new); #5 incorrect gift purchase (perfect exchange/attach opportunity); #7, product damaged upon arrival (another exchange/attach opportunity).
The time for retailers to act? Now.
A successful – and profitable – 2018 return season starts in Q1 2017. As platforms, care vendors, and logistics operations undergo assessment and after-action review, opportunities open up to introduce change for the better. Preparation unfolds across Q1, Q2, and Q3 as capabilities are developed, piloted, and start to ramp – and as some retailers and brands get into the first waves of peak season with July 4 and back-to-school. Peak arrives in earnest in Q3 and last the entirety of Q4, with more flexible CX and care practices ramped and ready to flex, and service personnel primed to make sure each purchase avoids return-triggers. And the chance for real profit realization hits in Q1 2018, as the hard work accomplished during peak means fewer returns and deeper customer relationships even when returns happen.
About the Author
Tadd Wilson, (Vice President, Business Development – Retail & eCommerce), brings deep retail and eCommerce expertise and a passion for helping brands reshape customer experience. Tadd joined Arise because, in his words, he “loves brand engagement across web, stores, mobile, and voice – but hates the trade-offs most brands face between quality, flexibility, and cost.”
Prior to joining Arise, Tadd directed business consulting for Toshiba Global Commerce Solutions, and served as partner for the world’s largest store-based retailer.
For more thoughts on eCommerce and the retail customer experience, follow Tadd on Twitter @SmarterRetail.