The Christmas rush can be challenging but also highly profitable for retailers. Many e-commerce businesses focus time and money on providing customers with efficient and flexible delivery options in order to capitalise on this heightened demand. But when it comes to the inevitable post-Christmas return of unwanted goods the same level of attention and efficiency is not always apparent. Here, Paul Galpin, Managing Director, P2P Mailing, outlines the importance of developing a customer-friendly returns platform if customer relationships are to be nurtured and extended beyond the festive period.
Christmas is the make-or-break period for many retailers. Analysts predict that nearly 13% of all retail sales will be online in December 2014, reaching £4.7 billion.[1] With the growing festive demand for online goods, added pressure is inevitably placed on maintaining high mailing and delivery standards. While ecommerce companies fine-tune their delivery and fulfilment strategy to handle volume upsurge, far less attention is given to the corresponding handling of returns. But, who hasn’t heard a friend or relative say: “I’ve kept the receipt, if you don’t like it I can send it back”? And yet, too often, sending the item back is a cause of frustration; indeed many ecommerce businesses are still leaving it to the customer to make their own arrangements to return products.
Getting the returns process right is crucial to customer satisfaction. Research by Harris Interactive shows that 85% of customers say they will stop buying from a retailer if the returns process is a hassle and, conversely, 95% will use the same catalogue or internet retailer again if the process is convenient.[2] The explosion of social media channels also provides a wider berth for consumers to broadcast any complaints should the returns process not meet their required expectations. By using social media to comment about poor returns, consumers are immediately broadcasting this message to followers/friends. This could isolate online retailers from a raft of potential customers they haven’t yet engaged with. To avoid these unwanted outcomes it is critical that a secure and efficient returns process is in place.
Effective planning across delivery, fulfilment and returns from the outset should mean that things run as smoothly as possible when the Christmas rush kicks in. It’s always important to step back and view the process from a customer perspective. Online shopping by its very nature requires a high level of trust between the consumer and the vendor. Money is often exchanged before the goods are received and shoppers don’t have the opportunity to try on or examine their purchases before the transaction is completed. A good returns process can go a long way to turning new customers into loyal customers. Nevertheless, vendors need to make their returns policy clear to customers from the outset and carefully ensure that they are compliant with the regulations, which differ across countries. Customers should be able to navigate the whole procedure simply and swiftly, and systems should be tested and tested again before being rolled out to the market.
Retailers also need to offer choice and flexibility when it comes to returns. Previously, offering a sole, standard returns service may have been feasible but now, other options such as trackable returns are required to ensure that the retailer appeals to a diverse audience. In a recent study, 53% of retailers surveyed offered a choice of methods for returning an unwanted item bought online.[3] These choices included return by post and returning to a retailer’s store.
By outsourcing the returns solution (and potentially the main distribution as well), companies can concentrate on simply producing a good website and online shopping experience for their customers. For small retailers especially, this may be an attractive option. There are key benefits to partnering with an expert third party to plan and/or administrate the returns solution. The best providers will have the expertise to tailor the solution to the business, customising it to deal with national and regional differences where necessary and advising on the most appropriate shipping and returns options for the volume of mail being processed. This third-party expertise is particularly useful for any businesses looking to sell to customers internationally. There can be import and duty considerations for customers located outside the EU, so it’s important that any system is set-up correctly to ensure that the e-commerce retailer is complying with regulations and that the process can continue to be cost-effective during peak traffic times.
The expert provider should also facilitate the integration of the returns process with existing IT systems and logistics providers to ensure minimal disruption and cost. Ideally, the returns process should be integrated into the website on a white label basis, so that as far as the customer is concerned, everything looks and feels the same.
When it comes to mailing and delivery services, seasonal peaks place huge demands on online retailers. Companies that ignore the returns process do so at their peril. As the competition for Christmas trade hots up, the returns process is likely to become an increasingly important differentiator as consumers seek the best supplier. There are many considerations to take into account. These not only include current requirements, but also how the business might grow, and whether the returns process has the flexibility to handle that growth. This may include consideration of overseas expansion and how the company will manage cross-border returns and the ensuing complications. Expert providers can help to develop a process that is flexible and efficient, tailored to the particular requirements of the business and equipped to deal with the challenges of the festive season and beyond.
Paul Galpin Managing Director P2P Mailing
[1]Mintel, “Mintel’s Christmas 2014 predictions: Online sales to surge”, 13/08/2014 http://www.mintel.com/press-centre/retail-press-centre/mintels-christmas-2014-predictions-online-sales-to-surge
[2]Harris Interactive, Showrooming Not Slowing Down, According to Recent Harris Poll, 04/06/2014, http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/ctl/ReadCustom%20Default/mid/1508/ArticleId/1202/Default.aspx
[3] eConsultancy, ‘Multichannel retailers need to work on their returns policies’, https://econsultancy.com/blog/64801-multichannel-retailers-need-to-work-on-their-returns-policies#i.ekghnpwzydm310 , 7 May 2014
