Consumers recognize the value of easy product returns and retailers could turn that into a marketing advantage, Janet Mitchell, senior vice president of marketing for Newgistics Inc., tells Internet Retailer.
Along with R.R. Donneley and USF Processing, Newgistics has rolled out a returns product that it calls the Smart Label, which includes facilitating the return for the customer, informing the customer once the return has been received, then alerting the retailer that the product is coming back to the retailer’s warehouse and consolidating returns to create quantities that the retailer can deal with efficiently. First users of Smart Label are The Spiegel Group Inc.’s Eddie Bauer, Newport News and Spiegel catalog operations, J. Crew Group Inc. and Princess House Inc.
One of Newgistics’ retailer clients conducted a postcard survey of customers who had returned products using the Smart Label. 83% said they were very satisfied with the convenience of Smart Label, 96% said they were very satisfied with the ease of completing the return and 93% said they were very satisfied with the amount of time it took to complete the return. "Part of the value of the Smart Label is to build consumers’ confidence in that web site," Mitchell says.
Retailers who use the Smart Label program include return labels with customers’ orders. The label contains not only the address for returns but also information about the products in a bar code. The customer returning a product affixes the label to the package and drops it in a U.S. Postal Service mailbox. The packages are delivered to one of seven regional bulk mail centers, where R.R. Donnelley picks up the packages as part of its regular runs to the mail centers and delivers them to a sorting facility where workers scan the labels. Based on the scan data, Newgistics reports to the retailer that the item is coming back and at the same time generates an e-mail to the customer informing the customer that the return has arrived and has been processed.
Informing the customer of the return status is a key part of the process, Mitchell says, as 25% of customers who are returning products call the retailer to see if the return arrived and 11% call more than once.
The retailer pays the cost of the return, then charges the customer for the return postage. Retailers are free to set their fees to customers at whatever level they wish. One Smart Label customer charges $5.95 for all returns; another charges by weight with a range of $6 to $8.50; the third charges $4.95 for one item and $7.50 for two items, Mitchell reports. Thus the Smart Label is another source of revenue for the retailer. In the postcard survey, 87% of customers said they were satisfied with the value of the Smart Label, Mitchell says. "Consumers value convenience more than anything and they’re very willing to pay for it," she says.
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