As leading logistics consultants, the team at Bis Henderson Consulting, routinely find our online retailer clients keen to improve the management and cost of customer returns – indeed just lately there has been lots of industry chatter regarding the future of returns and the pressures placed on retailers.
According to the results of a recent survey conducted by Barclaycard, around 60% of retailers in the UK claim to be negatively affected by consumers increasingly returning unwanted items, while 31% found that the management of returns had a detrimental effect on profit margins.
"Serial returners" causing headaches for retailers
An accompanying poll of consumers, meanwhile, found that 58% were influenced in their online purchase decisions by a retailer’s returns policy, while 47% would not order an item if they had to pay to return it.
The problem is compounded by a relatively small number of “serial returners”, with 30% of consumers guilty of deliberately over-buying and then returning unwanted items. According to previous studies, about one in three online purchases is returned.
Several measures proposed for reducing online returns
However, the research also revealed several ways in which retailers may be able to minimise online returns.
The standardisation of clothes sizes and making virtual dressing rooms available to customers may help to reduce returns on clothing sites, with nearly half of shoppers claiming that standardised apparel and shoe sizes would prevent them from needing to order multiple items.
It has also been suggested that customers may be less likely to make wrong purchases if they are given access to an online ‘live chat’ function enabling them to ask questions about a retailer’s products.
Better online photography was another proposed measure for slashing high returns figures, not least given the discovery by a recent Royal Mail-commissioned poll that 12% of customers had returned an online purchase due to the item’s appearance differing from that in the online images.
Greater accuracy in product descriptions may also help, with 20% of those surveyed in the above research having returned an item because it was of worse-than-expected quality.
What lessons can your organisation learn from these figures?
If there is one lesson above all for retailers to learn from such findings, it has to be the importance of giving the consumer the best possible customer experience while also minimising the scope for returns in the first place.
It is crucial to bear in mind that even with all the above measures implemented, your online business will still have returns to manage, and that such returned products will need to be quickly processed and put back into stock thereby available to purchase again.
Should certain items be consistently returned, or some lines end up in a terminal stock situation you may choose to consider recycling them, making use of the best disposition routes and maximising yield. If an item does have to become refuse, sending it to the tip should be very much the last resort, in light of the many other, more environmentally friendly recycling options generally available.
Feel free to contact Bis Henderson Consulting for more guidance from our supply chain and logistics consultants on how you can effectively navigate an ever-changing industry.