January 27, 2021

Blog/ Returns: What's the problem?

Harriet Hird

Returns: what’s the problem?

From huge financial burdens, to hard-working delivery staff and dirty fumes, the trend in retail is to hide the true cost of delivery from consumers. But if that’s true for outbound deliveries, it’s doubly so for product returns and reverse logistics. We like our orders to arrive quickly, at, ideally, no extra cost. We want to be able to try products out, and if they don’t fit, or they’re not quite what we thought they’d be, we like to be able to return them quickly and easily. Again, at no extra cost. That’s the equation for a happy online customer, right?



But that’s not quite the whole picture. While great efforts are made to make things super simple and easy for shoppers (and it’s true, research shows that a smooth returns experience makes for a very powerful customer loyalty tool), there is a flurry of business activity arising to make those wishes come true. And the impact of returns on the triple bottom line is something that retailers and their customers are being forced to start considering seriously.

By 2023, UK returns are set to cost £5.6 billion, so it’s no surprise that 45% of UK brands are considering putting limits on customers that return items too often. Other retailers are effectively opting out altogether – Amazon and Walmart recently made the shock move to let customers keep items they seek to return- because, ‘hey, it was just a low-value nick-nack you ordered and, gah, returns… they cost a lot to organise’. Something like that. This is a worrying precedent in terms of consumerism and the value of resources, but should be considered alongside the equally depressing reality that up to 25% returns end up in landfill! That is usually because restocking checks and processes are costly and time-consuming, and cancel out the potential margin from resale.

With UK online retail growing by 46% as a whole (and in some sectors by over 70%) last year, it seems likely that the way we shop will never return to a pre-pandemic ‘normal’. With that in mind, it’s important to consider the specific challenges and opportunities that returns pose for retailers and their logistics partners. There are capacity issues in peak periods like Christmas, stretched profit margins, new, huge warehousing needs, additional vehicle journeys, more congestion, carbon emissions and worsening air quality and, increasingly, there are untapped consumer values which are being ignored. How can retailers and logistics companies address all these competing demands?

So is there a different approach?

The most common reason for UK returns (70%) is size and fit; in the absence of being able to try clothes on in a physical store, many shoppers, up to 60% in fact, are ‘bracketing’- buying one size up and one size down- knowing they can safely return the sizes that don’t fit at no cost. Returns experts ReBound and sizing experts My Size ID are working with their customers to identify ways that the online shopping experience can help improve the accuracy of sizing. There’s also mounting evidence that that longer return policies can surprisingly lead to lower incidents of returns.

Beyond these practical methods of nudging shoppers towards needing fewer returns, there’s also an additional opportunity to be had from the emergence of shoppers who want the things they buy to have a positive impact on the planet. Although it’s certainly true that there’s a bit of a perception gap between what consumers say they care about and how much they’re prepared to put that into action, the power of the green pound is growing by the day- with 73% millennials willing to pay more for a sustainable goods. This group of shoppers are likely to research the sustainable credentials of what they buy, are more likely to purchase from brands who perform and communicate well on sustainability and are likely to boycott brands that don’t have their ethical ducks in order.

So, there’s an opportunity to help consumers understand more about the impact of their returns, to not only nudge them towards better, more sustainable behaviour but when we’re talking about genuine, unavoidable returns, there’s an opportunity for reverse logistics to have a better impact for the planet and, perhaps more tangibly, to the city or town where they live.

Picture this…

Instead of the scenario presented right at the start of this post: here, we have a shopper who has been reading some pretty upsetting things about the quality of the air they’re breathing in their city and they’re starting to see how the stuff they do as a consumer can have an impact. More vans coming to their door = more fumes and congestion. They’ve recently found out one of their favourite brands is making ambitious plans to help tackle the climate emergency by focusing on net zero. Yes! Good news. They’re feeling concerned about the conditions of the workers who farm the cotton in their clothes, and they want to make sure the people who have made their clothes are being treated and paid fairly. And all of these thoughts and cares are reasonably close to the front of their mind.

When they get to the checkout, they know that what’s in their basket has been sourced fairly, they feel they can rely on the sizing guides provided so they only buy what they need, in the knowledge that in all likelihood it will fit. And when their order arrives it comes delivered on… a bike? A slightly… unusual looking bike… with a big ‘cargo’ box fitted at the front… and a friendly courier who arrives at a time slot they have chosen. Perhaps they ordered some trousers from a different brand last month and they’ve been able to book for that same courier to collect their return items all during the same visit. They feel pretty satisfied; they feel like they’ve made a good purchasing decision; and they feel like they’re contributing to a better city and a better world.

We’re getting pretty close to that reality. Talk to Zedify today about how we make it happen for you.

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