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BizReport : Ecommerce archives : January 02, 2018

Keep shoppers, the planet, and your profits happy by allowing in-store returns

The returns process a key consideration among consumers when considering a purchase and, as postal services enter their busiest week of the year, retailers need to consider the benefits of enabling shoppers to return their gifts in-store.

by Helen Leggatt

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro's report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

The waste resulting from returns is considerable. Only half of returned items make it back onto the shelves - real or virtual - with the remainder contributing to an incredible 5 billion pounds worth of landfill waste (about the same amount of trash produced by 5 million Americans). The returns process itself consumes 1.6 billion gallons of diesel (UPS plans converting diesel delivery trucks to electric) and produces 15 million metric tons of CO2, let alone causing logistical headaches for retailers.

Of course, retailers can cut down on expense and environmental damage by motivating shoppers to return their online purchases in-store. This can cut the cost of returns to distribution centers, enable items to be put back on shelves faster, and the process appeals to 61% of shoppers.

It stands to reason, then, that those retailers who get the returns process right are attracting customers. In fact, research earlier this year from European payments provider Klarna 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, retail, returns process

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