eCommerce has become a widespread buying option for most of us, especially from the effects from COVID which has forced many to further adapt to the option of buying online and being our only channel of purchasing from our favourite brands.
As everything around us becomes more digitalised, eCommerce has proven itself to be the way forward, but it comes with drawbacks. Firstly, and foremost, being able to touch the actual product, trying it on and having that ‘evaluation’ process instore. A lot of customers value this aspect which keeps our highstreets brick & motor stores valued by many.
Secondly, the everyday problems that always occur; item does not fit, item does not look as shown on the screen or described, and the item is faulty or damaged.
Retailers are responsible for picking up the initial front-end costs if any returns need to be made from the customer, as a common part to an online stores policy, this gives consumers the confidence to shop freely and hassle-free on their website or online channels.
But what about the costs involved in upholding this promise? Let’s take a look at the main 5 below.
Cost of a refund: Due to poor customer service or unhappy customers.
Shipping & Handling: When e-retailers offer free returns to entice customers to spend, this investment into the transportation cost is lost when products are sent back.
Logistics: One that is often overlooked by many but deems to have high expectations is the wait around delivery times. While same day, to express delivery options are always better than standard, make sure to upload that promise or customers will be quick to look for alternatives and refunds requests will be made.
Fraudulent Purchases: Another underlying issue that is becoming more of a headache for e-retailers is fraudulent and fake purchases. Either from stolen contact details or payment methods, in most cases, the merchant will have to accumulate the return costs from this.
Cost of Product Dispositions: One major consideration when items are returned is the inspection for resale, this tends to take up time and staff resources. Another point to consider is that retailers offering lengthy return periods face issues with products not being either liable for resale or not in fashion when it comes back, which results in the product being liquidated, which tends to be sold for less than its perceived value.
A Returns Strategy that is Future Proof
We found that 82% of customers won’t return to make another purchase if an online store has an overly complicated or difficult return process, furthermore, we found that 72% of consumers say that they will spend more with an e-retailer that DOES have a hassle-free return process.
This exhibits that having to return unwanted goods is already a bother for us consumers, but for retailers, there is more work and cost involved. Retailers must understand the increasing expectations and the competitive landscape among standing out which is all about the customer, the convenience and the initiative’s that tailor to the overall experience.
The above points show how easy it can be for e-retailers to amass more costs if a returns strategy isn’t up to date, and while we expect that most online stores have solutions in place already, with the growth of eCommerce, retailers must always be looking for more ways service this and implement more tools and practices to avoid the future mishaps that can cause underlying issues throughout.
What better time to highlight this then the festive season, proven to be the busiest period for retailers, shortly followed by a barrage of returns. Digital commerce states that returns have increased January year to year by 26%.
Customer Data Is Key
Putting data quality practices in place is key for retailers, although there are many surrounding use cases, future-proofing your return strategy is defiantly one that data quality tools can do.
We start with our first recommendation being an address autocomplete & lookup tool, this is vital for any retailer wanting to enhance their checkout process as it collects accurate address data at the point of entry. Whether its local or international customers, the address lookup tool will suggest a standardised, formatted and verified postal address to ensure timely deliveries are met anywhere in the world while making sure every address that enters your system is a verified address giving reassurance of the delivery reaching the customer.
Our second recommendation is the use of geocoding & location intelligence, this enhancement can add latitude and longitude coordinates to a shopper’s verified address to pinpoint exact distances from the nearest distribution centre or warehouse which tailors towards being able to offer same day or next day delivery option.
Much like eCommerce giants Amazon, being able to offer more convenience will give you that edge over your competition.
The third recommendation is achieving single customer view (SCV), having that one golden record that gives a full 360 view on a customer enables better segmentation to build profiles based on past purchases & buying habits, engagement though various channels, feedback and more. This can be important when evaluating those ‘high-risk customers’ which is a customer that is more likely to return a product.
Deduplicating your data will also clear up any clustered or partial bits of data that may be scattered throughout various departments. This is usually caused by the same person inputting different customer information when engaging with a company through different channels.
Having that initial single customer view throughout a whole organisation will also allow better efficiency between departments, ie; marketing & promotions being able to quickly offer a 20% voucher to a customer if the logistics team see that their order has been delayed.
Our last recommendation is knowing who your customer is (KYC), being able to verify the identity of any person behind a purchase from your online store will shield your business from fraudulent activity. An issue that is become more common as digitalisation grows upon us.
Using a trusted data partner that can access trusted reference data like electoral rolls, credit agencies and other watchlists will be useful if you are selling high valued products to a particular sector or particular audiences. The use of cross-validating a customer contact data such as proof of address to show that a person lives at that address provided along with email and phone to verify that those two elements are live, callable, contactable and not fake will protect the merchant from any potential fraudulent traps.
Also, we have found the enrichment tool of IP location being a useful barrier in protecting an e-retailer. Being able to see where your visitors are coming from and if a person who says that live in Manchester wanting to purchase high valued goods but showing an IP location in Poland can give clarity to this type of fraudulent activity.
Yield Minimal Returns
eCommerce continues to grow and is becoming ever more relied on year to year. This tends to bring most retailers to the primary realisation that customer demand will follow from this. Needing to tailor to the increasing expectation, a retailer’s return strategy will be a key asset in setting them apart from the competition. Applying data-driven practices will vastly work towards fine-tuning their future return process that will ultimately yield minimal returns and uphold those loyal customers and the repeat profit they bring.