Returns management
RETURNS MANAGEMENT:
REORGANIZING LOGISTICS
FOR EVERYWHERE SHOPPERS
The e-commerce world is a constantly changing world, supply chain and logistics operators must take into account new elements on the stage to keep up with the times. Today the rise of Everywhere Shoppers, digital and technological users who take advantage of multichannel to buy more, at any time, has prompted operators to reorganize their processes by harnessing the power of data and adopting innovative models of fulfilment.
By digitizing the customer experience, streamlining the returns management, and embracing out of home delivery methods like parcel shops and lockers, logistics operators can navigate the challenges posed by returns while meeting the evolving expectations of customers.
RETURNS MANAGEMENT:
A CHALLENGE FOR RETAILERS
It is undeniable that online shopping is now part of our everyday life. Together with the purchases, however, we have learned to know well the back of this shiny medal, which brings new opportunities to merchants around the country and, to customers, the chance to get what they want even when the object of desire comes from far away.
TO ENSURE THEY RECEIVE THE DESIRED PRODUCT, SHOPPERS OFTEN RESORT TO TACTICS LIKE BUYING MULTIPLE SIZES OR COLOURS AND RETURNING WHAT
THEY DON'T WANT - A PRACTICE KNOWN
AS "BRACKETING."
One of the biggest challenges for retailers in the era of online shopping is managing returns effectively. With customers unable to physically touch and try products before purchasing, returns have become a common occurrence.
Many merchants have built their reliability on the possibility of having "returns always free within 30 days". Operations like this have perhaps been brilliant and fundamental to clear customs the purchase of clothes and shoes, rubbing out the anxieties of doubtful buyers. But today, that online shopping has become a habit, thanks to the lockdown that has increased consumption on the internet by 52% compared to 2019, the free return seems to be turning into a double-edged weapon.
The scale of returns is staggering. Taking the US market as an example, approximately $212 billion worth
of online purchases being returned in 2022 alone.
For every $1 billion in sales, retailers experience an average of $165 million in returns, as reported by the National Retail Federation(1). These returns create a significant headache for retailers who must incur the costs associated with retrieving and processing the items.
In 2019, Italy was amongst the least matured e-commerce market(2) but recent studies show that it has gained 5 points in 2022, placing the country in the lead, and even closer to the market leader,
the United Kingdom(3).
As e-commerce develops, so do returns. In 2017, the rate of returns in Italy was 13%(4) whereas in 2022 it rose to 39%(5) at the same level of France and 10 points behind the UK.
Therefore, the impact of the P&L becomes more and more visible – making it a true pain points for retailers.
Reverse logistic has become increasingly
expensive due to rising shipping and labour costs.
It has been estimated that companies spend around 66% of a product's price to process a return.
In addition, a return can cost a company $10 to $20, excluding freight expenses.
As costs continue to remain high in 2023,
it is likely that retailers will pass these costs back
to the customers.
In this ever-evolving landscape of e-commerce, logistics operators and supply chains are undergoing a significant reorganisation to cater to the needs of everywhere shoppers.
Central to this transformation is the enhancement of data-driven strategies and the creation of new models of fulfilment.
We will delve into how logistics operators are leveraging data and adopting innovative strategies to serve
Everywhere Shoppers digitizing the customer experience while focusing on the benefits of out of home delivery methods like parcel shops and lockers.
There is a galaxy still relatively unexplored in the logistic universe: he Returns one. Today 15% of purchases go back, on average, but there are fields whith a 30 or 40% rate. Merchant's reputation and budget can be put at risk by this. Optimizing the return process is the real challenge from the e-commerce world, and responding with the right logistics strategy can make a difference in the future.
Leonardo Berlingieri
_ Head of Commercial Italy
ENHANCING AND DIGITIZING THE CUSTOMER
EXPERIENCE IN RETURNS MANAGEMENT
According to a recent study, 67% of consumers consult a merchant’s return policy before making a purchase and 58% want to make a return easily, with all the useful instructions and without wasting time sending email to request information.(6)
Indeed, returning an item means:
- Asking for returns
- Filling a form (either paper-based or on-line) to detail the reason for return
- Repacking the item(s)
- Printing the label
- Dropping it(them)
- Waiting for a refund - that can take up to 14 days according to E-commerce European laws.
Looking at the Western European market, “inkjet printer market experienced in the first half of 2022
a double-digit decrease of 10% compared to the first half of 2021 and The fourth-largest Italian market
(11% share) went down 14%” (7)
This is why, to address the challenges posed by returns and meet the expectations of Everywhere Shoppers, logistics operators are focusing on digitizing the customer experience.
BY LEVERAGING DATA AND TECHNOLOGY, THEY AIM TO STREAMLINE
THE RETURNS PROCESS AND PROVIDE A SEAMLESS END-TO-END
SHOPPING JOURNEY.
First of all, 18 months after the UK and the successful launch of their label-less returns solution, we introduced the offer in Italy. Generating a QR-Code to be scanned at a locker or in a PUDO offer a hassle-free experience for returners.
More over, in our UK report two years ago, one of the key aways was to make returns self-service(8). As a result, implementing self-service returns portals can be another element of the digitizing customer experience. These portals empower customers to initiate returns, generate returns labels, and schedule pickups or drop-offs at their convenience.
BY SIMPLIFYING THE RETURNS MANAGEMENT, LOGISTICS OPERATORS NOT ONLY IMPROVE CUSTOMER SATISFACTION BUT ALSO REDUCE THE STRAIN ON THEIR RESOURCES AND ENHANCE OPERATIONAL EFFICIENCY.
Finally, real-time tracking information plays a crucial role in delivering a transparent and reliable experience to customers. By leveraging data analytics and digital technologies, logistics operators provide customers with accurate updates on their orders, allowing them to stay informed throughout the delivery process.
This proactive communication ensures that customers are aware of any delays or issues, thereby minimizing customer care enquiries for retailers and anxiety for consumers, enhancing trust in the brand.
“Simplify everything” is InPost’s motto and this is why we are proud to announce the launch of our returns portal (https://resi.inpost.it/en).
The return experience - print the label, prepare the package, reorganize the day to be at home for the courier, just to return something that has disregarded the purchases expectations - is experienced as a very unpleasant event by most customers.
Simplifying the experience, giving the customer a key role in the return process can radically change the entire online shopping experience, transforming the return process from problem to loyalty tool.Viviana Coppo
_ Head of Marketing Italy
UNLOCKING THE BENEFITS OF OUT OF HOME DELIVERY METHODS FOR RETURNS MANAGEMENT
As we can see, the main point is to propose the Everywhere Shoppers wider choices that align with their needs and preferences. To make it short: to propose a truly customer-centric approach.
With the rise of C2C marketplaces which answer the willingness to shop in an inflationary environment, to limit costs of shipping while being more sustainable, out of home delivery methods, such as parcel shops and lockers, have become their preferred methods to send or to collect items.
Why? Because parcel shops and lockers provide convenient and secure locations for customers
to collect their packages. By leveraging a network of strategically placed locations, logistics operators ensure that customers have easy access to their deliveries at a time that suits them best.
This flexibility reduces the risk of missed deliveries and enhances customer satisfaction.
UNDOUBTEDLY, OUT OF HOME DELIVERY IS NOW EMBEDDED IN CONSUMERS’ LIVES.
IN FACT, 70% OF THE EUROPEAN E-SHOPPERS ARE EITHER A C2C SELLER,
BUYER OR BOTH (9).
First of all, 18 months after the UK and the successful launch of their label-less returns solution, we introduced the offer in Italy. Generating a QR-Code to be scanned at a locker or in a PUDO offer a hassle-free experience for returners.
For logistics operators, out of home delivery methods optimize the last-mile delivery process. Consolidating multiple deliveries to a single location reduces costs and increases operational efficiency. By using data analytics to optimize route planning and resource allocation, operators can ensure timely deliveries while minimizing transportation-related expenses.
As a result, these alternative delivery options offer numerous benefits for customers, retailers and operators. But not only, the entire society can benefit from it.
In fact, by making returns management easier, it increases the chances of returning items quicker. For example, with one of our technological partners in the UK, up to 50% can time be reduced to get goods back on shelves. Getting items back quicker means also getting the refund earlier than the legal 14 days, and allowing shoppers to re-gain their purchasing power faster.
Finally, accelerated and digitised returns process has a double benefit for merchants:
- Optimised stock management
- Minimised number of items that are returned out of season and that could be either
incinerated or thrown in the landfill, unsustainable in the long run.
Our goal is to create an urban experience more focused on people and environment's well-being: OOH deliveries are more than a new logistics management's tool, they are a further step towards the emergence of Smart Cities! Thanks to the technological innovation InPost is able to optimize the management of deliveries and returns, to respond to the environmental, structural and human problems that the growth of the e-commerce system poses us every day.
Nicola D'Elia
_ Managing Director Southern Europe