Solving the Post-Holiday Returns Problem
As the holiday season kicks off in full force, retailers are preparing for the influx of purchases that are sure to accompany the gift-giving season. While sales increase during holiday crunch time, processing an originating transaction doesn't mean the lifecycle of the sale is over. Regardless of why someone decides to take a gift back, returns are an inevitable part of the holiday season’s aftermath. Retailers should have a proactive solution in place to fight financial loss and added stress on employees.
According to the National Retail Federation's (NRF) 2017 Holiday Planning Playbook, nearly two-thirds of consumers returned at least one item last holiday season, which eats into the profits of retailers and increases their costs. Rather than waiting to deal with a hefty amount of returns when the holidays are over, retailers can lay the groundwork for a successful holiday season by preparing a solid omnichannel returns management strategy. Done well, it will lead to increased efficiency and profitability.
Maximizing the In-Store Experience
In the age of omnichannel, utilizing the physical store can give retailers a competitive advantage. It can even lead to shoppers buying additional items during their returns trip. More than 80 percent of consumers described the process of making a return as somewhat easy. Yet 64 percent of customers with a negative return experience said they would hesitate to shop at the retailer again, according to NRF 2017 data.
To fuel customer satisfaction and encourage purchase of additional products, retailers should focus on planning and training associates. This makes sure the process runs smoothly and leaves customers without reason to complain. Make sure associates know to offer alternatives like exchanges or store credit and cash reimbursements. This helps retailers and consumers alike take advantage of the retailer’s entire value proposition. It also prevents the loss of the sale by keeping transactions in-store.
Monitoring Returns With Real-Time Visibility
Retailers can further ease the pain of return overloads by keeping track of each return with complete visibility and control of these products. Monitoring returns in real time ultimately helps speed up the resale of merchandise returned in good resalable condition. This helps to minimize discounts and allows for accurate inventory visibility.
Accurately tracking individual items helps retailers make more informed choices when planning their next inventory order. It allows redistribution of goods to meet demand locally, and provides data to track trends for optimal sales tactics that can be used in the future. Additionally, keeping close watch helps inventory managers reduce fraud. They can spot chronic returners, for example. It also lets them find opportunities to improve by discovering products that are most often returned.
Customer-Friendly Omnichannel Returns Policy
Creating a customer-friendly omnichannel returns policy is important. Fortunately, a worldwide review of over 2,000 retailers finds that 77 percent of merchants understand this. Returns policies need to be easily understood by non-lawyers, and include a reasonable window to make those returns. Making it easy and safe for the consumer to return goods makes them more comfortable with buying the items in the first place. This is a clever tactic to encourage more purchases as shoppers head into the holiday season.
Consistent with consumer values of flexibility and convenience, favorable returns policies usually involve accepting in-store returns for online sales. Don’t forget about letting customers make returns without receipts, including free returns shipping, allowing mismatches and giving partial returns as options. When it comes to a time frame for returns, 30-day to 60-day returns are the most common. However, if you want to differentiate your offering, test out a 60-day to 90-day return window. Only 20 percent of retailers in the U.S., and 10 percent of retailers worldwide, offer a 60-day to 90-day allowance. Don’t forget that a clear returns policy, stating the terms and conditions of the sale up front, also helps facilitate a relationship that's based on trust.
Before the holiday shopping season takes off at full speed, reset your thinking about returns. Keep in mind that a positive returns experience results in customers who are more willing to come back. Returning customers mean new sales opportunities. With a new attitude and approach, expect a few more re-sales and remember to plan accordingly.
Nick McLean is CEO of OrderDynamics, an omnichannel order management system.
Related story: Retailers Have Work to Do in Omnichannel, Report Finds