Embedding Returns within the Ecommerce Offer

With a challenging 12 months ahead predicted to bring higher prices, retailers need to make radical changes to reduce costs and safeguard consumer loyalty and spending. Andrew Tavener explores the opportunity to add returns collections to existing delivery schedules and the implications for cost control, reduced empty miles and customer experience…

 

Spotlight on Costs

The high level of ecommerce returns remains one of the biggest concerns for any retailer. Given the gloomy forecast for the UK economy during 2025, few retailers can profitably accommodate even the average ecommerce rate of return which hovers around 17%. With rates for expensive products hitting 50% and seasonal goods trending around 30%, the implications of any spike in returns is potentially devastating.

Some retailers have attempted to reduce the behaviour of serial returners. Many now charge for returns; others have banned customers who repeatedly returned clothing that appeared to have been worn. But the returns policy also plays a key part in overall customer perception and buying intention. Seventy-six percent of consumers consider free returns a key factor in deciding where to shop, and 67% say a negative return experience would discourage them from shopping with a retailer again.

Retailers may be willing to lose those customers ordering the same item in multiple sizes and colourways – they are clearly planning to return most items and the resultant processing costs and shipping fees will make the order unprofitable.  Add in the unsellable merchandise and impact on ESG policies of goods ending up in landfill, and it is imperative for retailers to get tough with serial returners.

 

Positive Experience

Improving the returns experience for the rest of the customers is, however, viewed as a key goal during 2025. A positive returns experience is vital, especially for high value items. Customers will not risk buying an expensive piece of clothing or jewellery without the ability to return because the unboxing experience may not match up to expectations.

And to be frank, a significant percentage of returns are due to products arriving either broken or late – missing an important anniversary, for example – which means an easy returns model is essential if retailers are to avoid customer loss.

Rather than penalising customers making returns, retailers have the chance to improve customer engagement and retention by offering an added value returns experience. At home pick up services, for example, transform the ease with which customers can return items – and improve their confidence in the process.

 

Pick Up at Home

Since retailers already use extensive delivery fleets in operations, it is not a massive leap to allow the same drivers to pick up returns while on route. The scheduling process works the same way – a customer can book a pick up for return in just as they choose a delivery time when making a purchase. Critically, route optimisation ensures customers are only offered times that map into existing planned routes to ensure the service is cost effective.

Some retailers will offer this as an added value service to top or subscribed customers. Others can leverage pick up services provided by third party carriers. Either way, adding pick up to delivery can reduce the number of empty miles, further helping organisations hit environmental targets and decarbonise fleet operations.

 

Breaking Down Silos

The biggest barrier to achieving this change is the current internal structure of retail operations. Today, the siloed nature of business means the impact of high levels of returns is rarely felt by the sales team. The marketing department is oblivious when a successful campaign leads to great sales but product disappointment leads to a spike in returns. It is only the customer service and logistics teams that have true visibility of the level and costs associated with returns.

That has to change. If the retailer is to truly understand its performance on a customer-by-customer level the entire process has to be joined up. Creating end to end accountability is a vital step. It will enable retailers to understand profitability by customer, by order and enable companies to understand the value of returns to different customer personas. This insight can then support the creation of an end-to-end proposition that reflects a customer’s true value – such as free home pick up for elite customers.

 

Conclusion

There is no doubt that retailers have to get serious about serial returners. Disincentives at the checkout – such as higher delivery prices for customers with more than three of the same item of clothing in their basket, for example – can help to change behaviour. Retailers can also use carbon calculators to demonstrate to customers the environmental impact of returns, helping to educate and improve awareness.

The overall goal must be to create an optimal returns experience that boosts confidence in and loyalty to the retailer. By integrating returns into an optimised delivery model, retailers can improve the customer experience while also minimising empty miles and cost.

https://routinguk.descartes.com/