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Creating customer loyalty through return logistics

Whether shopping in-store, online or on a mobile device, returns are an inevitable issue for retailers.

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For e-commerce, return rates are significantly higher when compared to brick and mortar purchases, ranging from 15 per cent to as high as 30 per cent[1]. As such, online retailers need to take a proactive approach to returns in order to reduce hindrances to the shoppers’ experience and simultaneously create customer loyalty.

Returns can be both complicated and costly for an online retailer. A poor returns system can make for a negative customer experience and reduce the likelihood for repeat engagement. On the flip side, 95 per cent of online shoppers said they would shop again with a retailer if they provide a satisfactory returns process[2]. That’s why it is so important for online retailers to put time and effort into their returns process and reverse logistics. Customers have come to expect a solid returns system that offers them flexibility and convenience. This means that having a seamless returns system is no longer an option; it is a strategic business decision.

With the Christmas shopping season truly upon us, peak ‘return season’ is starting to build up, as holiday shoppers return potential gift ideas and continues through to January as people return unwanted gifts from the festive season.

A painless returns process will create a positive experience where shoppers feel supported and valued. Here are our tips for creating customer loyalty by enhancing reverse logistics:

Have a well-thought out returns system

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Proactively develop and plan out your returns system, from terms and conditions to the delivery options. Shoppers quickly realise if reverse logistics are not a key component of an online retailer’s business. For starters, customers need to be informed of how to go about their return. Share clear instructions for how shoppers can return products and communicate this at various stages of the buying journey. Consider your maximum returns period, whether a receipt is required, packaging policies and aim to keep this as simple as possible. With their busy lives, consumers will rely on an easy and straightforward process for organising returns. During this holiday season, consider even extending your returns policy to ease a surge in returns. The next step occurs during the actual delivery.

Ensure customers have all the required returns information when they receive their order, this will facilitate a return by the customer, if necessary. This eliminates any extra steps, keeps your customers informed and provides a cost-effective return solution. To make this process even easier in the event this information is lost or damaged, retailers should be able to create an on-demand return label using an email link.

Returns are only going to play a bigger part in the online shopping experience as e-commerce continues to grow. For instance, as an online retailer, partnering with brick and mortar shops to accept returns from online shopping is a service to consider. This may grow in popularity over time locally, as more online marketplaces have a presence in Australia.

Keep a watchful eye on returns

Once a return package has been initiated, there are a number of benefits that monitoring returns packages can provide. Retailers should track returns to ensure they will be received securely and in a timely manner. For customers, a long returns process can be a hindrance as it extends the amount of time for a refund to be issued. More than 70 per cent of online shoppers expect a refund credit within five days of returning products[3]. Offering a seamless returns process ensures customers will receive their refund or reissued products quickly, which will keep customers happy.

Monitoring returns is also beneficial for the information and data visibility it provides. This data can be used to measure the effectiveness and efficiency of your returns process, and help identify changes to enhance your reverse logistics chain. In fact, returns information can be used not only to ensure customer satisfaction, but also to identify problematic goods that should be removed from inventory or shoppers who return goods at a higher rate from others and your company can take the appropriate steps to address any customer concerns. After all, returns are part of the business strategy and can inform decision-making as your business direction changes over time.

Choose reliability to deliver on returns

Developing a returns strategy is not as simple as it sounds. There are a number of factors to consider, such as analysing the current infrastructure, implementing new processes, meeting any regulatory guidelines, recording accurate data and operating the overall system. The returns process can become a hindrance or an opportunity, but this depends on your approach, and who you partner with to ensure a seamless returns system. The right provider will give you more time to focus on your core business and achieve scalable growth. Take the Christmas season to re-examine your returns policy, and drive better customer engagement through improved return logistics.

Kim Garner is the Managing Director of International Operations at FedEx Express Australia and New Zealand.

[1] Mirrored messaging, FedEx-approved messaging, FedEx-Economist interview briefing & messages, Sept 2017

[2] https://marketingland.com/e-commerce-report-95-online-shoppers-say-positive-return-experience-drives-loyalty-216820

[3] https://www.digitalcommerce360.com/2016/10/12/slow-returns-processing-will-keep-customers-away/