Companies need to heed to the intensified pressure to make product return policies as quick and easy as possible for customers.

Why online purchase returns should be an easy part of the customer journey

Blog by Nathalie Schooling

If you’re anything like me, you’ve likely landed up keeping unwanted items you’ve purchased online out of sheer resignation to the uphill battle of returning it. Why do they make it so hard!?

But as e-commerce grows in popularity and competition increases among online retailers, companies need to heed to the intensified pressure to make product return policies as quick and easy as possible for customers.

With global research showing that returns by online shoppers are rising year-on-year by around 40%, a slick and effective ‘reverse logistics’ capability is just as important as competitive product pricing and fast delivery.  Current figures show that compared to the cost of goods sold, returns from customers account for an average of 7-10% of sales revenue.

As online shopping matures in South Africa, the expectations of consumers increase too. They demand convenience from every aspect of their online shopping experience, including easily returning the goods they don’t want. So, e-tailers wishing to remain competitive need to take this part of the customer journey seriously.

No’ takesies–backsies’  

Companies should be focusing their energy on effective returns management

Unfortunately, some local e-commerce platforms regard returns – part of a process known as ‘reverse logistics’, in which goods go back along the supply chain to the original supplier and then onwards from there – as a costly and unwanted burden.

Consequently, customers are sometimes charged for returns, or the process has been made unwieldy and complicated to deter shoppers, which can lead to major frustration.

But buying online often means returns are sometimes inevitable.  Research cited by courier company DHL, for example, indicates that half of all clothing items bought online are returned.

This isn’t unreasonable, given that online shoppers can’t try them on in a changing room before they buy. But if the process of sending back the clothes they don’t want isn’t hassle-free, they either won’t shop online again, or they won’t shop with that e-commerce platform.

So effective returns management shouldn’t be a chore or a cost centre for the business; it must be seen as a critical part of a customer acquisition and retention strategy. It must be a core customer experience competency that will ultimately grow the company. Consider that, according to a survey by Deloitte & Arvato,  a well-managed reverse logistics process has the potential to reclaim up to 32% of original product value.

Minding the ‘gap’

So, how can a business implement reverse logistics cost effectively and in the best interests of their customers? Technology such as automation, AI and machine learning should be harnessed.

To truly streamline the returns process, businesses need to be gathering ongoing customer insights to find out where the customer concerns are, as well as understanding bottlenecks in the logistics process, and technology is a great enabler for this. In fact, we are seeing an upward trend in companies using machine learning to increase visibility and predict supply chain disruptions.

We are also noticing the benefit of  advanced technologies in breaking down silos and communication barriers across the supply chain ( and for those who read this blog regularly, you know how I feel about silos!)

Closing communication gaps in this process , I believe is the ultimate source of effective returns management, and where businesses should be focussing their energy. The most important communication gap to close is with the customer. They are the ones you need to be empathising with throughout the ‘ often frustrating’ returns journey.