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E-commerce: how returns-handling can be a new opportunity

Nordin Sahil |

Research shows that online shoppers return their orders more than 3 times as often as when the same goods were bought offline. Still, the impact of returns-handling is underestimated, especially in this time of e-commerce. While returns-handling can be a complex process, it does bring new opportunities. How can you make sure you yield these to your advantage?

The challenge of omni-channel returns

Wholesale partners are increasingly facing omni-channel sales and returns. Not so long ago companies had to work hard to create a matching online environment. Now, the implications are that customers expect to be able to buy online, and return in an offline shop, or to be able to return goods at another location than they were bought. This requires the flexibility of individual shops to accept returns of items they have not sold themselves. So when combining different channels in your sales strategy, handling returns becomes considerably more demanding.

Customers have clear expectations about a returns process and they expect the same service levels during the first purchase just as well in follow up processes. An easy process is very important when it comes to a shopping experience, whether in a B2C or B2B. While there is a lot of effort in an easy sales process, the returns process lags behind. In the same way as you can buy a product at multiple locations, people expect to be able to return them in multiple locations as well. But did you know that even adding a return-label to a delivery is not a standard procedure at many retailers. While in the same time customers value this highly when asked about their requirements. Process speed also plays a key role in the evaluation of the shopping experience.

In the end, the complexity and demands of an omni-channel returns process bring the risk of an increase in costs. By having insight and control, these costs can be kept under control. When visibility in a return-status is limited, both direct costs (refunds are too high, process restarted, complaints handling) as well as indirect costs (brand value decreases) can have financial implications.

From challenge to opportunity

However, a well designed returns process is much more than just limiting the costs of unwanted sales. Leading companies in e-commerce have the capabilities to handle returns in such a way that it can also lead to new opportunities. The second hand market for instance, is increasing, and offers a lot of opportunities for redeeming the costs of a product that is returned and cannot be (re)sold as new.

Think about IBM, a giant in the professional computer market. They quickly saw the possibilities of reselling articles. Many contracts for IBM articles spread over multiple years and at some point it became more and more expensive to get the parts required for maintenance. The solution? Have their products returned and sell them as refurbished articles on the second hand market.

But besides the second hand market as an alternative place to sell goods, a decent returns process also provides plenty of opportunities for cross- and/or up-selling. The moment a customer appears in a physical store, or even at your website to bring back a previously ordered good, he/she can be persuaded to purchase replacement or additional products. Their experience during their returns process is key to determine the success of this renewed sales moment. Customers will monitor this process closely to determine whether they will grant you replacement or a new order. The layout of a (web)shop, and effective use of merchandising during the return process are also important attributes to success.

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Prevent collisions through traffic management

By now it should now be clear that the flow of goods will move more and more in two directions, especially with the development of online channels. The fashion industry has completely transformed, with even people ordering multiple sizes by default only to return all but the one that fits. The logistics flows in both directions are stretching a supply chain capabilities. It is therefore of the highest importance to get your returns flow under control, to make the flow of goods visible and traceable, and to make both in and outbound processes as smooth and convenient as possible.

“Get your returns process under control!”

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