Returns fulfillment-related services have never been a bigger part of ecommerce and the associated logistics providers’ business considerations. Consumers are increasingly making their purchasing decisions based on the ease of any potential returns they may have from a given order. Apparel retailers specifically have seen over 20% of their orders being returned. Capturing as much possible value from returned items is key for maintaining profits and data from returned items can help retailers fine-tune product offerings to further improve their customer experience.
While there are a host of strategies that retailers and 3PL providers alike can implement to optimize their returns fulfillment, there is also a rising industry of returns consolidators who specialize in optimizing the returns process for all parties involved. Some of these companies are utilizing pioneering new models to maximize the recaptured value of returned items and to minimize the downsides of returns like wasted items and environmental impacts.
Learning from the innovations that others are bringing to returns is key in deciding which options are best for retailers and their customers, and in the industry as a whole continuing to adapt and provide the best service possible.
Happy Returns: Making customers’ lives easier while lessening environmental impacts
The traditional returns process can be daunting for customers. Holding onto all the labels and packaging in the event of a potential return is a hassle that takes up storage space. Printing return labels, properly repacking items, and making sure returned items go to the right place are all burdens on consumers that could cause them to give up and look to a different retailer next time.
Items that are returned take longer to get back to inventory shelves and retailers have to spend extra time confirming that returned items haven’t been damaged before they can refund customers or send a replacement item.
Happy Returns has found a new way to streamline this process to make it as seamless as possible and to maximize value capture from returned merchandise. The innovation starts with a network of “return bars” at brick-and-mortar locations where customers can bring unpackaged, unlabeled items for return with nothing more than a QR code provided directly by the retailer through a Happy Returns empowered portal. Customers get the added convenience of not having to worry about repacking items properly. They are also able to, within the returns process, opt for an exchange with the same item in a different size or color rather than waiting for a refund and initiating a new purchase. All of these lower the barrier for returns and secondary purchases, building loyalty to the brand and increasing the likelihood of more purchases.
Retailers also have access to customization options. They can offer incentives to opt for store credit over cash refunds. They can also set separate windows for returns vs. exchanges, further incentivizing them to spend more money with the original retailer.
The environmental benefits of this model go far beyond removing the requirement for printing labels and boxing return items. Collecting returns at centralized hubs means that multiple returns get grouped together, palletized, and shipped in bulk, drastically reducing transportation-related carbon emissions. Happy Returns also utilizes reusable totes instead of single-use cardboard boxes for their return shipments, saving 120 thousand pounds of carbon emissions per 1 million returns.
Customers increasingly look to spend their money with companies that demonstrate values that match their own. By optimizing the sustainability of returns fulfillment, Happy Returns allows them to show their customers that minimizing their carbon footprint is a key concern.
All of the consolidation and optimization also minimizes costs for the retailer. Paying for returns by traditional mail leads to retailers overpaying by 21% on average for returns when a majority of those returns are due to a simple size issue. Happy Returns accomplishes all of this by not only consolidating the physical returned items but also consolidating the entire return and reordering process into a single interaction.
Loop Returns Fulfillment: An exchange experience just like shopping
Loop Returns is all about making a return experience that maximizes the likelihood of the returned item being exchanged for another from the same retailer. As online orders continue to be the go-to for holiday season gift shopping, the likelihood of people receiving gifts or other items that might not be exactly what they are looking for grows. Loop Returns is designed to make those return customers more likely to exchange those not-quite-right purchases for something else rather than asking for a refund.
The process starts with the customer initiating the returns process. The entire process can be completed without the need for any retail/customer service staff. Their entire order is displayed with eligible return items highlighted.
Exchanges are incentivized at every turn. Customers are first encouraged to initiate an exchange before offering a refund, first showing the other available sizes and colors that can be immediately exchanged in an interface that is identical to the original shopping experience, with images, sizing guides, and inventory levels all readily viewable.
Throughout this process Loop is also constantly collecting data about the return. Not just cataloging when an item is exchanged for a size up or down, but also asking the customer more detailed questions about why they weren’t satisfied.
When customers do select the refund option, Loop provides retailers the option to offer further incentives like additional store credit or to opt for an exchange instead. The biggest push towards exchanges comes in the form of making the exchange process as identical to online shopping as possible. As they are completing the return initiation, they can view the entire catalog as if they were simply shopping, only they don’t have to spend any additional money. Shoppers check out just as if they were shopping, but while applying the value of their return to the new purchase. Upsell revenue is captured immediately if they select a more expensive item. If the new item is cheaper the remainder can then be passed on as a refund or store credit. This keeps revenue from the original sale in the hands of the retailer and gets the new item to the customer faster, only requiring further payment if the return item isn’t sent back within the required window.
Only after the process is completed, and the exchange item is already on the way, does the customer need to bring their item to one of many returns locations with a simple QR code to confirm the item is on its way back.
Tailored returns fulfillment is increasingly the norm across the industry. Optimizing this process is key to ensuring that customers remain customers and spend their money on something they do want. Maximizing the efficiency of the process retains value for the retailer while cutting down on environmental impacts. This process of innovation will only continue; retailers and logistics providers alike should look to those on the forefront to make sure they are offering their customers the best possible service.
While returns fulfillment is critical, the integration of efficient returns processing systems cannot be overlooked, as it ensures a seamless experience for both customers and retailers.
