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BizReport : Ecommerce archives : March 28, 2017

UK retailers need to improve returns process

A new survey from European payments provider Klarna reveals that UK retailers need to improve their returns capabilities or risk losing customers.

by Helen Leggatt

Online returns are big business for today's UK retailer. Nearly 9 out of 10 (87%) online shoppers having returned items purchased online. In fact, on average, online shoppers estimate they returned 10% of their total online purchases in the last twelve months. With online spending in the UK reaching £133 billion (US$167 billion) in 2016, the UK online returns economy could be valued as high as £13 billion (US$16 billion).

However, a survey of 2,000 consumers across the UK conducted by Censuswide for Klarna in February this year, found that more than three-quarters (77%) believe retailers in the UK need to up their returns game. One in four said they had been put off returning an item because a retailer's returns process was too much hassle.

The returns process is a major part of the online shopping experience, and one that can make or break loyalty. In Klarna's survey, 83% of respondents said they would not go back to a retailer after a bad experience returning an item.


It stands to reason, then, than those retailers who get the returns process right are attracting customers. Two thirds of respondents cited easy returns as a prime factor when choosing a retailer and 28% would spend more if the returns process were easier. Free returns would prompt 67% of retailers to buy more over time.

In fact, Klarna's own data from shopper transactions shows that regular returners are more valuable - they make more frequent purchases with higher overall net purchase volume - even after the value of returned items is removed.

"In the past, returns were regarded by retailers as an unwelcome cost of doing business. But consumers today demand a seamless, frictionless customer journey - whether they're shopping, paying or returning," said Luke Griffiths, UK General Manager, Klarna.

"Returns are quickly emerging as a competitive differentiator for merchants, who must optimize their capabilities or risk being left behind. Retailers looking to reap the greatest rewards should consider combining smooth returns with an option to Pay after Delivery - giving shoppers a convenient way to 'try it, love it, then pay for it'."

Tags: ecommerce, research, returns

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