Brands Look to Return Pickup to Stay Competitive in E-Commerce Space
In an era when food, groceries, barns and ultimately anything is delivered on-demand to consumers' doorsteps, why are we just starting to see return pickup offered? Even major retailers like Amazon.com and Walmart have only started offering return pickup recently.
It seems like a simple offering, but with weight and size restrictions, varying distances from homes to warehouses, and the logistics behind scheduling pickups, it poses a major challenge for most brands.
The truth is, offering pickup has many added benefits for not just the customer but for retailers as well.
What We Can Learn From Amazon and Walmart
As mentioned earlier, both Amazon and Walmart have started offering pickup for returns. Amazon partners with trusted shipping partner UPS. Consumers can select pickup starting at $11.99 (during the time of publishing) with no label required. Customers are only required to place the item back in the box, seal it and schedule the pickup.
Similarly, Walmart has two options for return pickups. The retailer partners with FedEx to offer free home pickup for large item returns. The company has also rolled out a new service, InHome, with main features of pickup returns and grocery delivery for a $19.95 monthly cost. This service leverages Walmart’s sprawling store network, sending retail associates to pick up returns.
Amazon and Walmart expanding their at-home offerings is a reflection of broader trends going on in the market. The pandemic fueled a new level of demand for at-home delivery, particularly for food. Less than two decades ago food delivery was typically limited to just pizza and Chinese. Now, according to data from McKinsey, food delivery has more than tripled since 2017, and has a global market worth of more than $150 billion.
The demand for at-home services is showing continued growth throughout all retail and consumer industries. If retailers don’t keep up with these major competitors, they'll face losing valuable sales.
The Benefits of Offering Return Pickup
Large retailers like Amazon and Walmart have already realized the benefits of offering pickup for returns. Some of these include:
- Seal the deal. Online shopping can make customers uncertain, and choosing colors, styles and sizing online can feel like a risk. Approximately 70 percent of online shopping carts are abandoned. Offering easy returns can save the sale for questioning consumers and help them feel more secure with making online purchases knowing that the returns process is hassle-free.
- Resell items quickly. On average, consumers take 27 days to return an item (on a 30-day return policy). Furthermore, retailers are faced with an additional two weeks to three weeks processing time. Due to these delays, returned items on a discount schedule may only have one chance to sell at full price. Based on average processing times, it's estimated that retailers can lose 20 percent of the expected sale value of returned inventory due to long return processing times.
- Improve customer retention. Over 90 percent of customers make repeat purchases based on a company's return policy alone. Retailers that want to improve customer retention should implement and market appealing and flexible return policies which, along with pickup, will encourage repeat purchases.
How Retailers Can Implement Return Pickup
Offering comprehensive return pickup policies may not be doable for all retailers, but small steps can go a long way. Retailers should research their competitors' policies to ensure they have a similar or ideally more consumer-friendly return offering.
It can also be beneficial to look into a reverse logistics partner that can handle the return pickup process. It can be hard to know where to start and how to negotiate the best terms with shipping providers. There are many reverse logistics companies that specialize in finding the most efficient way to process returns, have existing partnerships with top shipping companies, and can integrate into existing e-commerce platforms.
Overall, brands need to implement a consumer-centric returns pickup policy if they want to stay competitive against retailers like Amazon and Walmart, as well as to turn customers into brand advocates. Up-front costs might seem intimidating, but in the long run it can lead to more sales, maximized resale value on returned inventory, and repeat customers.
Ben Freedman is the CEO of Boomerang, a platform transforming returns from an inconvenience to an asset for e-commerce brands.
Ben Freedman is the CEO of Boomerang, a platform transforming returns from an inconvenience to an asset for e-commerce brands. Previous to Boomerang, Ben worked for several years in UPS’s Corporate Strategy Group, was then Jet’s fourth supply chain employee and then managed a $650 million supply chain for Walmart.