The Returns Avalanche
£17billion worth of goods was bought online during the Christmas shopping period, from Black Friday to Boxing Day, and considering 15%-20% of goods bought online are normally returned, this amounts to £2.5billion worth of returns that need to be processed, transported and dealt with. This avalanche of returns caused a surge so great, Royal Mail dubbed Tuesday 2nd January as ‘Take-back Tuesday’, following the expectation that the number of returns brought in would double the daily December average.
These hefty figures show just how drastically the shopping behaviour within British households has changed in recent years. 90% of households now have access to the internet, compared to only 57% in 2006 and 86% in 2016; leading to the sharp increase in online shopping, where 77% of adults are now buying goods or services online, compared to only 53% in 2008.
Despite retailers being aware of this change in consumer behaviour, many still lack efficient and effective returns policies and processes, putting a huge strain on the supply chain. In today’s retail world, a customer’s returns experience is as important as their sales and delivery experience; customers expect flexibility, convenience, and transparency, and if retailers’ returns policies don’t match that, customer loyalty will suffer. Recent Royal Mail research indicates that over half of shoppers (60%) would be less likely to shop with a retailer again following a difficult returns experience, while 47% said they would be unlikely to shop with a retailer again if it charged for returns, and three in five shoppers said they would switch retailers if free returns weren’t provided.
Clearly a frictionless and quick returns process is vital if retailers want to retain customers; suitable and generous returns policies are the way forward, with an accompanying range of services and features to ease the process for consumers. Research indicates that features such as returns tracking capability, which 73% of customers said they would prefer to have access to, along with prepaid returns labels included in the original delivery, and re-sealable packaging are fundamental in meeting customer expectations.
For retailers to be able to provide an exemplary returns policy with tracking features and quick processing, they must first be able to leverage real time visibility of the supply chain, from warehouses to fleets. To build confidence and rapport, they need to be able to inform the shopper the moment the returned item has been received, a bonus for the retailer as well, as the sooner items can be logged as inventory again, the sooner they can be approved for sale. This is where a warehouse management system (WMS) steps in, as the key to unlocking the flexibility and agility needed to react swiftly to surges in returns, while reducing error margins and saving costs. With Descartes pixi* WMS, in-house logistics processes can be automated to streamline resource and oversee orders and returns for maximum efficiency. The pixi* WMS can provide faster returns handling by 49 per cent, giving the retailer a returns processing speed that will satisfy customers, and the ability to update inventory with no unnecessary delay.
Combined with scalable and advanced route planning and home delivery optimisation software, technology can help transform supply chain performance, and enable logistics professionals to maximise the utilisation and efficiency of existing resource, to speed up returns collection and transportation. A real time view of assets also allows for customers to be able to track their returns and feel confident in the retailer’s returns processing capabilities. The Descartes’ Route Planning solutions continually optimise demand and delivery (or in the case of returns, collections) capacity and resources to decrease costs, improve service, increase productivity and reduce the fleet’s environmental impact – all contributing to a streamlined handling of any returns.
The impact of a good versus a poor customer experience shows that return policies are no longer just part of a company’s back-room logistics strategy – they’re now a valuable lever for brand equity. It’s become the responsibility of the retailer to offer convenient and simple return options for customers, and the return burden is on their shoulders. Descartes’ advanced solutions can help retailers implement a holistic, end-to-end customer service experience incorporating flawless returns processing, that will leave retailers more likely to see repeat customers and increased revenue.