The first day back to work after the Christmas and New Year break is when most people have something unwanted to send back. But returns are a year-round problem for the retail sector – multichannel retailing adds complexity, and occasionally confusion, into the mix for some retailers, and that equals cost.
If you can’t turn returns round quickly enough stock becomes old stock and margin becomes lost margin. Added to which, if you handle returns badly you can seriously damage a customer relationship, and that can be very costly over the long term. Slick, customer-friendly returns processes can be thought of as high-cost exercises, but there’s much more to it than that. The commoditisation of the front-end of retail (product and price are broadly similar, for example) means customers are increasingly evaluating retailers on operational execution – delivery and returns being chief among them.
This is the new front line, or one of them at least. Get it right here and you can repair a damaged customer relationship just as easily as you might otherwise have lost it for good.
Headquartered in Boras, not far from Gothenburg on the west coast of Sweden, Centiro specialises in designing logistics management software with people in mind. It’s CEO and chief architect, Niklas Hedin says he’s not convinced retailers are still making enough effort where returns are concerned, and that they are still where they were 12 months ago in terms of preparedness and ability to cope.
“There are two groups of retailer. Those with a smooth returns process (from the customer’s point of view) and those who do not,” he says.
Returns are a part of the buying decision for a customer, Hedin says. Which is why retailers who aren’t regarding them as such are setting themselves up to struggle.
“Ideally you wouldn’t get any returns. But you will. So the process needs to be smooth, otherwise it can be a major cause of abandoned baskets.”
Of course, a less-than-ideal returns experience isn’t just bad news for the shopper who wants to send something back. Vicky Brock, CEO of Clear Returns, cautions that there are different types of returning shopper persona, and that if you get it wrong with some of them at the returns stage, they’ll never come back.
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