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Customer returns: How to optimise reverse logistics to drive online retail

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15th Jul 2015
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Retailers are often carefully attentive to the speed and accuracy of outbound delivery because of its obvious link to sales. But the same kind of focus on the returns process is often found lacking.

In a recent study by Internet Retailing, 43% of retailers admitted that they were not making it easier for customers to return products. Too frequently, retailers and their logistics partners brush the issue of returns under the carpet. They are often an afterthought; a hassle to process and costly to manage. And yet, returns are important to consumers.

According to an analysis of 20.8 million shoppers by consultancy Granify, a strong returns policy is the most important decision-making factor for online shoppers of clothing and apparel; even more important than price. In order to encourage customers to make repeat purchases and promote growth, the principle of offering a returns service is important to e-commerce businesses of all sizes.

An efficient and effortless returns system can be a way of distinguishing your brand in a crowded and competitive market. So which retailers are getting it right and how are they doing it?

Firstly, it’s important to step back and view the process from a customer perspective, to ensure that it’s straightforward to use and reliable. To achieve this, online retailers should have a returns policy that is easy to find on their homepage and product pages. For example, B&Q’s returns policy is at the top of the homepage and at the bottom of every product page.     

Once a customer has located the online returns policy, it is essential to present the returns information in a clear and concise fashion. Halfords is a great example of a retailer with an easy to read online returns policy, all the information is clearly laid out with headings and bullet point information. In contrast, a scattershot approach littered with jargon and legal obligations can simply deter customers from ordering something in the first place as they do not want the hassle of returning it if it is not right.

Whether dealing with international or domestic returns, it is important that the process is cost-effective. For example, there can be import and duty considerations for customers located outside the EU, so it’s important that the system is set up correctly to ensure that the company is complying with regulations and that these costs are considered from the outset.

When implementing a successful returns system, retailers need to adopt a reverse psychology mindset. By highlighting the strength of their returns process they risk opening the floodgates to more cross-border returns. But those that realise that this approach will actually boost sales, and are prepared for it, will reap the benefits. Even back in 2012, Craig Adkins of Zappos supported this idea when he revealed “our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers.”

The customer experience is cyclical, not a journey from one point to another and the way returns are handled makes a real difference to how customers feel about a brand. If the experience is positive, then trust is built between the consumer and the retailer, meaning the customer is more likely to stay loyal. Reverse logistics now has a pivotal role in the entire lifecycle of online retail and is increasingly being seen as an opportunity to drive cross-border sales rather than an obstacle to sort out later. The harsh reality is that many retailers’ sales could have already taken a big hit due to the returns process not being in check, without them even knowing about it.

Savvy brands are recognising that an efficient returns policy can serve as a powerful marketing tool. It’s now time for those that haven’t fully addressed their returns process to deliver.

Graham Best is CEO of ReBOUND.

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