Returns – that word can strike fear into even the most hardened retailer, especially as Christmas is firmly on the horizon. Balancing a customer-friendly returns policy with the additional cost that it entails, is no mean feat.
And that’s particularly true when it comes to online shopping. According to the 2017 UPS ‘Pulse of the Online Shopper’ (POS) research, 64% of customers check the returns policy before they purchase an item. Even more – 75% – declared free returns to be an important factor when choosing where to buy an item.
So to remain competitive, a liberal (and above all, free) policy is paramount. But that can really cut into your bottom line. Depending on the size of your business, it might mean employing staff to do nothing else other than process returns and repackage them, or repurpose them.
Of course, there’s absolutely nothing wrong in investing in customer satisfaction. In fact, it’s imperative. Retailers offering free returns have been shown to benefit from a huge tenfold increase in Net Promoter Score, compared to those that don’t.1 But moreover, the impact on customer loyalty cannot be underestimated.
A quick and easy return process for the customer can exceed expectations and turn a negative customer contact into a positive. In recent research by Narvar, a staggering 96% of respondents said that a positive returns experience would encourage them to choose that retailer again.
We won’t go on. It’s clear that you as an online seller need to offer pain-free returns for your customers.
But how do you make it (relatively) pain-free for your business? That’s the tricky part. If you’re rushed off your feet trying to generate new sales and fulfil existing orders, it’s easy to deprioritise that pile of returns that aren’t going to make you any money (at least, not in the short-term).
The day-to-day processing of returns can quickly become overwhelming. None more than so than in the fashion sector where large numbers of returns are part and parcel of the business.
Even with the emergence of technology such as Metail’s MeModel ® (allowing customers the chance to see clothes on a digital version of themselves), ‘try before you buy’ has become the gold standard for online clothes shopping. ASOS, TopShop, H&M all offer this service and now Amazon has jumped on the bandwagon.
And where Amazon lead, most will follow. Because they simply have to in order to remain relevant.
However, it’s not only fashion where this trend of ‘bracketing’ – purchasing multiple versions of similar items – is becoming commonplace. Other sectors such as homewares and luxury goods are following suit. Meaning that all business owners need to have a clear plan in mind of how to deal with the ever-increasing demand that returns will place on them.
So back to the all-important question. How can you keep up with Amazon and deal with returns in an efficient but customer-friendly way? And, if you want to take advantage of the sales potential that Amazon Prime offers, how do you keep on top of their stringent returns policy?
There are 2 choices:
- Keep the process in-house and devise a plan to scale it
- Outsource returns to your order fulfilment company
The first works if you have sufficient cash flow. You’ll have to invest in technology and people. The overheads associated with in-house returns remain constant, even if your returns come in peaks and troughs (for example, following sales). However, there could be periods in the year when your staffing and infrastructure are not being used to full capacity.
To overcome this, outsourcing is a good option. It enables you to scale returns operations quickly, as and when you need them. Furthermore, an order fulfilment company such as Virtual Logistics may operate on a pay-as-you-go model. So you only pay for the resources that you use.
In addition, handing over returns to your fulfilment provider helps to streamline the whole process. The quicker the return is processed, the quicker it is back in your inventory ready for resale. If the customer returns an item to you, you then have to repackage it and ship it out to the fulfilment provider. This adds an extra step that delays the time available for reselling it.
Moreover, the goods may not even be in a fit state for resale at full price. Do you risk damaging your brand by reselling them as seconds?
As well as offering fast and efficient returns to keep your customers happy, Virtual Logistics have a handy solution for maintaining brand integrity. Our order fulfilment clients are able to sell their returned goods as seconds via our own high-performing eBay store. There need not ever be a mention of your brand, so this not only protects it, but also enables you to claw back some of that lost revenue.
But that’s not all. Virtual Logistics have Amazon Seller Fulfilled Prime status so we are well versed in dealing with Amazon returns in a timely and efficient manner.
So that’s one headache off your list. Less pain, more gain.
1Tern Consultancy study commissioned by Rebound.