Order management and returns-processing technologies can help e-retailers offer the convenience consumers want and the cost benefits e-retailers require.
Online retailers know that returns are a part of doing business. And returns are crucial to a merchant’s long-term success because how the returns process works can mean the difference between happy customers who will return to shop again and dissatisfied customers who will not.
“A convenient returns process provides a competitive advantage for retailers because it enhances brand loyalty and gives consumers a reason to make future purchases,” says Patrick Allard, director of business development for Newgistics Inc., a provider of fully integrated omnichannel commerce solutions offering order management, order fulfillment, parcel delivery and returns management.
A top-flight returns process adheres to the four C’s: convenience, clarity, communication and consistency, Allard says. “Retailers should make it convenient for customers to print out a prepaid shipping label, develop a clear returns policy that is easy to find on the web site, properly set customers’ expectations for how long it will take, communicate with customers about the status of the return throughout the process, and deliver a consistent returns experience across all channels,” Allard says.
Retailers can smooth the transaction by detailing how the returns process works in a dedicated—and easily found—space on an e-commerce site, he says. That returns-focused area should enable a shopper to fill out a return form that automatically links his original order to his returns request. The merchant can then assign a tracking number to the item being returned and provide it to the customer so he can follow the status of the return.
Aiming for convenience, the customer should also be able to print a prepaid shipping label and have the option to schedule a pickup from the retailer’s preferred delivery carrier or drop off the item at a nearby location.
Such self-service features not only please customers, they help the retailer reduce its inbound customer service call volume. Reducing inbound calls from customers with questions about the return process can mean representatives have more time to spend with shoppers that need attention.
“The ability for a customer to track the progress of a return through a returns portal eliminates a lot of customers calling to ask where their refund is,” says Jonathan Matchett, operations director for wnDirect, a provider of international logistics solutions. “The efficiency that a returns portal brings to the returns process is why more retailers are moving to them.”
Retailers can build and manage their own returns process, or outsource it to a vendor. Matchett says using a vendor-operated returns portal, such as that offered by wnDirect, spares e-retailers the cost of building their own. A retailer can brand an outsourced returns space so it looks to customers like it is run by the merchant.
Returning across channels
Enabling customers to return an item bought online in a store adds another layer of complexity to the process because it requires retailers to integrate their online and in-store order management systems so in-store personnel can access online order data. Advanced order management solutions can do this and will allow returns to be processed at the store. That lets the consumer begin browsing for another purchase immediately, while she’s still in the store.
Equally important is having a network-wide order management solution that shows retailers where inventory is located no matter where it is in their supply chain. For example, an item bought online and returned to a store can be used to fill an online order for the same item and be shipped directly from the store to the consumer. Alternatively, the item can be placed into stock at the store, liquidated through a secondary channel or sent to a fulfillment center.
Sophisticated order management technology can also give store associates full visibility into inventory across the network and inform them how to most efficiently manage a return. Newgistics’ end-to-end e-commerce solution provides this level of visibility by leveraging Manhattan Enterprise Order Management.
“The integration of customer sales data across all channels is key to facilitating omnichannel returns,” says Allard, noting Newgistics provides such integration capabilities as part of its omnichannel commerce solution. “It also allows all channels to stay up-to-date on inventory levels by being able to see whether the returned item has been restocked in-store or at the warehouse.”
Make returns a sales opportunity
Whenever a customer initiates a return, retailers have a direct opportunity to reengage the customer to make another sale. For example, a sales clerk can help an online shopper returning an item in a store by helping her find the right item. “There’s a 30% chance that a customer returning an item in-store will make another purchase if she is reengaged,” Allard says.
E-retailers can entice consumers making a return by mail to make another purchase by leveraging messaging on returns notifications. The e-mails or text messages that notify consumers that an item has been picked up by the carrier, received by the retailer, refunded or replaced can include promotional messaging. Newgistics Shipment Manager triggers e-mail or text messages to customers when the bar code on the return shipping label is scanned at each stage of the returns process.
“The opportunities to reengage the customer through transit event messaging, known as Transit Triggers generates new sales, and can strengthen customer relations through consistent communication,” Allard says.
While e-retailers typically set 30- to 90-day return policies, web retailers must be careful about just how accommodating they will be, or they run the risk of having their returns policy abused by some customers. “Retailers want a returns policy that is fair to the customer, but not overly generous to prevent consumers from abusing it,” Matchett says.
For example, German apparel retailer Zalando changed its marketing slogan from “Scream for joy or return it” to just “Scream for joy” after many customers who purchased apparel wore the clothing and then returned it, in some cases with personal items left in the pockets. The trend became known as Zalando parties, according to Matchett. Changing its slogan altered consumers’ attitudes about the retailer’s returns policy, without changing the policy itself, he adds.
Many consumers need to be reminded of the retailer’s returns policy in order to be dissuaded from flagrantly abusing it. For that reason it’s a good idea for an online retailer to make its returns policy visible at checkout, in FAQs and on the returns portal. E-retailers may also want to consider not making it too easy to return a purchase. “Requiring the customer to contact the retailer to initiate a return requires the customer to think about why he is returning the item,” Matchett says. “Including a prepaid shipping label with an order can also make it too easy for a customer to return an item on a whim.”
Matchett further recommends retailers clearly state in their returns policies that all returned items will be inspected for damage and undue wear and tear. He says it is important that consumers understand that a retailer may reject the return if the item has been used.
While it’s important for merchants to have a flexible and customer-friendly returns policy, they need to find a balance between making returns convenient for customers and making sure their bottom lines are not negatively impacted by customers attempting to abuse their returns policies. For example, a consumer may attempt to return an item sold on clearance as non-returnable or after the returns window has closed. Newgistics Shipment Manager allows retailers to set business rules, such as a 30-day return window and to link those rules to individual SKU data.
Once a return has been processed and the refund issued, retailers need a plan for how to resell the returned item. Top-selling items are typically restocked to fill new orders. Items that are not restocked can be resold in clearance or flash sales, through outlet centers and eBay resellers, Matchett says.
With more online shoppers checking a retailer’s returns policy before they click the Buy button, retailers that develop clear, convenient returns policies and processes are not only more apt to convert browsers into buyers, they will be in a position to make a lasting impression that can lead to repeat business.
“Making consumers feel confident that a return will be handled with the same care and speed as an outbound order, and that they can track its progress every step of the way, holds tremendous value to the customer,” Matchett says.
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