Online returns are on the rise, thanks to skyrocketing eCommerce sales, one-click subscriptions, and “try before you buy” purchasing behaviors. Although there are more options to return items now than in the past, it’s imperative for retailers to get the returns experience right, or risk churning customers.
Yet, the returns experience still leaves 7 out of 10 (70.4%) consumers dissatisfied. This is especially true for Millennials, whom in particular were 1.5X more likely to say that they were not satisfied with how the returns process works today.
Increased Options for Consumers to Return Online Goods Boosts Loyalty… and Sales
Increasingly, retailers must face the pressure of choosing between sustainable, profitable supply chains or providing the seamless customer experience that their customers demand. According to Statista, returned online deliveries will cost $550 billion by 2020. The average retailer spends 8.1% of total sales on reverse logistics which includes taking back customer returns, damaged, or otherwise unwanted goods.
The stakes for consumer loyalty are even higher with online returns, as it is the last opportunity for retailers to impress their customers. According to our recent consumer survey, Last Mile Delivery: What Consumers Expect and How To #SaveRetail, 98% of shoppers say that they will hinge their loyalty on the shipping experience, while almost ⅔ (65%) of shoppers are not likely to make another purchase from a retailer if they have a poor returns experience.
Additionally, if retailers make returns easy, they can capture more sales. According to a survey by Happy Returns, 28% of shoppers said they shop less online than they would otherwise, so they don’t have to deal with the hassle of returns.
The Perfect eCommerce Return Experience For Consumers
It’s 2019 — we’re in an age where consumers expect their retailers to take responsibility of the product and delivery experience from cart to door. It’s no surprise, then, that customers increasingly seek convenience above all else when it comes to completing an online return.
Retailers are working on making their eCommerce returns a free and hassle-free process. When we surveyed 1,500 shoppers in 2018, we found that the expectation for free online returns is growing, but it’s not yet a universal luxury for all consumers — only 56.4% received free shipping in their last product return.
In the reverse logistics process, the root of customer anxiety around returns lies in two phrases: “Where is my order?” (WISMO) and “When am I going to get my money back?” (Or — “Where is my return,” also known as WISMR). Ultimately, retailers who can provide the answers to these questions while finding efficiencies in customer service costs will create happier customer journeys and improve customer lifetime value.
Many shoppers, especially women, still do not trust the process enough to feel comfortable with online returns and would rather head back to the store to make a return. 3 out of 10 (29.6%) shoppers in our survey preferred to drop their return off at the retailer’s physical location— women, in particular, were 25.6% more likely to opt for this than men. While this is ideal for the retailer, as it drives more foot traffic and creates the opportunity for an exchange versus a refund, it still puts responsibility on the shopper to take action.
- Confusion around tracking and refund timing (26.6%)
- Needing to go somewhere to ship the item (24.9%)
- Not having the packaging included (15.6%)
- Dealing with customer service (14.1%)
In an ideal world, the process around parcel returns — for the shopper — is one where he or she can pack the item up in the box or bag it came in, slap on a pre-printed return label provided by the retailer, put it in the mailbox, and notify their retailer so the carrier can take the item away, and so they can track when they’re going to get their money back. Shoppers are expecting all costs of this experience to come off the backs of their retailers, who are trying to create profitable transactions.
New Online Return Options Create Flexibility For Consumers and Help Retailers Profit
While retailers understand that better customer experiences (CX) are the key to competing with behemoths like Amazon, they still need to create profitable transactions to maintain a healthy business. Instead of providing the ideal experience for consumers, they are finding a middle ground with their customers by adding more flexible options.
- Printable Return Labels
Shoppers enjoy free eCommerce returns, however, according to a survey by Happy Returns, 44% of shoppers under 30 become aggravated with this option. Even if a retailer does provide free returns through printable return labels, over ⅓ (36%) of shoppers do not have access to a printer at home. This option eliminates the role of customer service in the interaction, but these shoppers have to rely on a printer at work, the library, or elsewhere to generate the label before they stop at their local post office or UPS to drop off the item.
- Free Labels Included in Returnable Parcels
Retailers such as Mott & Bow and The Black Tux have “return-friendly” packaging, and include a return label inside. At the click of a button, any shopper can easily go online and notify their retailer that they are making a return, put their item back in the provided bag, seal it, and place the new label over the old one.
While this thoughtful experience lightens the burden of responsibility from the consumer on the front end by eliminating the need to interact with customer service, the shopper still has to drop the parcel off at their local carrier, and await their refund.
- Returns Bars
Happy Returns has over 350 Returns Bars around the country, allowing customers to stop in, return their item, and have their refund initiated immediately. These Return Bars are located in high density locations across the country such as malls and bookstores. According to a survey by Happy Returns, 56% of shoppers say they are much more likely to shop with a retailer online if that retailer allowed free returns with an immediate refund and didn’t require a return label to be printed.
Happy Returns customers include Rothy’s, Everlane, and Revolve. These companies can now better compete with Amazon, which allows customers to make returns at any Kohl’s location.
These Return Bars help to ease the burden of responsibility off of the consumer due to:
- No cost for the product return, other than the time needed to go to a local store, which 30% of shoppers don’t mind doing anyway.
- An immediate product refund: Consumers no longer have to ask, “Where is my money?” and “What’s happening with my return?”
- No packaging required: The consumer no longer carries the burden of finding a box and packing materials for the return.
- No printing label required: The shopper doesn’t have to worry about access to a printer.
This option also removes the retailer cost to provide packing and returns slips in every box, and not pay to process individual online returns.
- Delivery Appointment Scheduling
Who says that only parcel items are subject to returns? In 2018, online furniture sales represented $50.32 billion, according to eMarketer. Ordering and returning large items such as couches and even mattresses are becoming the new norms. The key for retailers to make this white-glove returns experience as smooth as possible is to control the process, while giving consumers the flexibility they crave.
Delivery appointment scheduling software gives consumers the flexibility to schedule, or change, their appointment windows, reducing the cost and frustration associated with missed appointments. Instead of dealing with a carrier calling them the day of the delivery, customers can interact with the tracking page and receive alerts when their carrier is coming to pick up the item. [Learn more about delivery appointment scheduling here.]
The Four Keys to Seamless Return Experiences
Reverse logistics and shipping are expensive for retailers to process, and there’s a lot at stake! In our survey, we found that there were four takeaways to remember when creating a seamless experience, while keeping retail profits in mind.
- Money matters: Optimize for cost in reverse decisioning, creating profitable transactions that your customers can enjoy.
- Make it convenient: Allow easy access to returns, create automated approval when possible, and provide options for pickup or drop off of the item
- Communicate: Provide visibility, an estimated processing date, and notifications throughout the return process
- Be proactive: Monitor shipments and ensure exceptions, such as delays, that occur on the way back do not impact the customer, and do not add extra fees to the shipment
It’s crucial to provide a reverse logistics experience that keeps customers coming back, and extends your lifetime value.