While returns represent a major challenge for retailers, particularly because of the very high costs they represent, they are part of the shopping experience. Professionals must therefore adopt an effective strategy to integrate them into the customer experience, to increase customer loyalty.
Returns represent a major challenge for many retailers. A recent study conducted by Blue Wonder, entitled “E-Commerce Returns 2024: European Retail Survey” shows that 63 % of them consider them as a major problem, because of the high processing, sorting and replenishment costsas well as return rates constantly increasing. These returns play a crucial role in the many challenges facing retailers today.
There’s no denying that returns are an integral part of the shopping experience. Rather than simply viewing them as a problem to solve, it’s essential to recognize that they represent a unique opportunity to build customer trust and loyalty, and ultimately drive growth. The key is implementing an effective returns strategy that aligns with the company’s broader goals. A returns strategy is much more than just a policy posted on a website, although that is crucial. An effective strategy has three essential elements: a philosophy, a leader, and a process..
Beyond the challenge, a chance to improve customer experience and profitability
The returns philosophy is the foundation of your strategy. It should incorporate various factors such asclient experiencecosts and data to guide your approach. For example, if your brand promises exemplary customer service, you should simplify the returns process and accept higher costs in the short term to deliver an exceptional experience. In the long term, this will increase customer loyalty and lifetime value, since 92 % customers will buy again if your returns work well.
If your brand is focused on improving its products, it is crucial to collect and use returns data to optimize your processes. Returns provide valuable insights into your products, supply chain, and customer experience. For example, a return due to a sizing issue highlights a need for improvement in your product informationwhile a damaged item indicates a need to review your packaging methods.
Ultimately, it comes down to what type of returns experience you want to deliver and how much you’re willing to invest in it. Knowing the strategic purpose of your returns will help you create a tailored policy and execute an optimized process.
Keys to a successful returns strategy: philosophy, leadership and optimized processes
It’s unlikely that a strategy will work without a lead. To truly deliver a returns strategy, there’s a need for ownership and accountability. One person may be responsible for the returns process, but it can also be a team that takes collaborative responsibility. Without this ultimate ownership of the entire returns journey, from initial refund request to restocking, the business will struggle to avoid focusing on resolving one-off issues in a piecemeal manner, leading to a disjointed approach to returns. It is not uncommon for e-commerce returns to be treated differently from in-store returnsor that returned items are systematically sent back to the overseas distribution center rather than to stores in the country.
These approaches may work at a basic level, but they are inefficient and costly when you consider the entire returns journey. By centralizing returns responsibility across all relevant functions (e-commerce, retail, operations, supply chain, logistics, sustainability, etc.), you can more easily identify bottlenecks in the process, recognize opportunities to reduce costs, and implement improvements needed for a frictionless returns process. You can also analyze feedback data and share it across teams in order to implement broader business strategies.
The returns manager can be internal or an external expert capable of managing challenges and implementing appropriate solutions.
Data, collaboration and adaptation: the levers for efficient returns management
The returns process should integrate your philosophy and leverage technology to ensure efficient end-to-end management. It’s crucial to use data—both customer and product—to identify returns patterns, collaborate with teams to improve product descriptions and processes, implement effective returns policies, and optimize inventory management. Returns strategies require continuous data analysis, problem identification, opportunity detection, and adaptation constante. Regular supervision by the returns manager, with the right people empowered to make decisions, is essential. For example, if a product with high return rates is promoted by the marketing department, it should be removed from the campaign. The purchasing team should check for possible manufacturing defectsand the logistics team must anticipate return arrivalsRegular meetings help keep your strategy on track and allow you to adjust if results aren’t as expected.
Source: www.ecommercemag.fr
