Embracing the Opportunity in Returns

Embracing the Opportunity in Returns

With the explosive growth of online shopping in recent years, largely fueled by the pandemic, returns are on the rise and have become a logistics headache for retailers, carriers, and consumers. The long-term impacts of this increased demand, and the resulting strain on retailers and supply chains, will largely depend on how retailers respond.

Looking ahead, the winners will be those who rethink every aspect of their returns logistics process, making it more seamless for consumers, carriers, and themselves. Here are a few key trends that are reshaping the reverse logistics space.

Loyalty programs. In an effort to claw back losses and deter returns from happening in the first place, some retailers, like H&M and Zara, have begun charging customers for online returns. But rather than punishing all customers for the actions of abusive returners, a more strategic tactic is to take a loyalty approach with returns.

Free Perks for Customers

Retailers could consider segmenting returns into tiers where better customers—based on how much they spend annually and how often they return—get perks that could include free shipping or more lenient returns policies.

DSW, Best Buy, and Saks are among the retailers beginning to take these steps. This is a better strategy to retain lifetime customers.

Doorstep pickups for returns. There has been much innovation in retail delivery convenience over the years, but there has been a huge gap on the other end with returns. Now, innovative retailers are providing customers with the option to have returns picked up from their doorstep.

A Smart Strategy

Considering that the returns process is a critical part of the purchase decision for consumers and their ongoing relationship with the brand, this is a smart strategy. In fact, 86% of respondents to a Pollen Returns survey say they feel more comfortable shopping with a retailer who offered complimentary front door pickup for every return. And 61% say that having to print a label, then bring returns back to a logistics provider, such as UPS or FedEx, is the most inconvenient aspect of the returns experience.

Technology partners are critical. Transforming the return problem into a solution that recaptures customers and dollars requires technology partners that provide retailers with the ability to make data-driven decisions to improve efficiencies. The good news for retailers is that such data-driven solutions are emerging, providing insight into each individual customer’s shopping habits to help curb excess and fraudulent returns.

Returns Impact Loyalty

Retailers should let go of any notion that we will eliminate returns altogether. Even with best efforts, returns have only continued to increase over the years.

Rather, we need to embrace the opportunity in returns. Returns are a part of shopping culture and play a major role in consumer purchasing decisions. How retailers handle returns is a reflection of the shopping experience itself and has a large impact on a customer’s loyalty to a brand.

Research from Invesp shows that 92% of consumers who have a positive return experience revisit brands for another purchase.

As we forge ahead into a post-pandemic world, the winners in the retail sector will be those who place the customer first and make data driven decisions that adapt their reverse supply chains to their strategic advantage.