One of the downfalls that has come with the growth in e-commerce sales is the corresponding increase in product returns, particularly in certain categories such as apparel and footwear. It makes sense. Without the ability to touch, feel and try on a product before making a purchase like in-store shoppers have, one would expect return rates to increase. Online customers are returning products at a growing rate — and costing retailers billions in the process. Further complicating matters is that free shipping and free returns have become commonplace for online retailers.
So what can retailers do to minimize the impact of product returns on their businesses? For many of the retailers evaluated in Total Retail's 2019 Top 100 Omnichannel Retailers report, giving customers the flexibility to return products across channels (e.g., items purchased online can be returned in-store) has been a primary solution to their returns challenges. Ninety-three percent of the 100 retailers evaluated offer cross-channel returns in at least some form — 56 percent did have exceptions to their cross-channel returns programs, such as limiting the number of stores that accept online returns or not making all products eligible for return across channels. This compares to just 78 percent of retailers that offered cross-channel returns in Total Retail's 2018 evaluation of the top 100 omnichannel retailers. Each of the top-six ranked retailers in this year's report offer cross-channel returns in some form.
By offering cross-channel returns, retailers realize several benefits: customer satisfaction, reduced processing costs, and, in many cases, increased in-store traffic, which can yield incremental purchases. Regarding that last piece, consider Kohl's partnership with Amazon.com to accept the online retailer's returns in its stores. A pilot test proved successful at generating increased foot traffic for Kohl's, which ended up making purchases while in-store. Kohl's recently announced that it will rolling out the program to all of its stores starting this July.
Tips for an Effective Cross-Channel Returns Service
Considering the benefits associated with offering cross-channel returns, retailers that haven't yet rolled out such a program should consider doing so immediately. Here are some tips to help them do that:
- Create a return policy that sets appropriate expectations around returns and exchanges and mitigate risks like return fraud.
- Promote the fact that customers can return products across channels. For example, include this info on your website, including the checkout page, as well as product promos for email, social media and other marketing channels.
- Train all staff members how to process returns, so the process is quick and customers don’t have to search for the one customer service desk.
- Have a synced inventory management system that can update inventory levels across channels in real time. Likewise, you'll need to have a single view of the customer's purchase history, enabling you to reconcile an online purchase in-store and visa versa.
- Test your company's ability to execute cross-channel returns by rolling out the program to a limited number of stores on a trial basis. Once the kinks have been worked out and you're able to offer your customer a seamless returns experience, roll out the service to all store locations.
To learn more about how top omnichannel retailers are using cross-channel returns to reduce costs and drive sales, download Total Retail's 2019 Top 100 Omnichannel Retailers Report today!
Related story: Total Retail's 2019 Top 100 Omnichannel Retailers