Return To Sender

29 November 2011 – Paul Galpin – MD of P2P Mailing

The e-commerce market is becoming increasingly competitive. Consumers have more choice than ever before, so one slip by retailers can result in customers defecting to a rival. Many factors influence a customer’s loyalty, but the returns process is particularly important. It has been proven that implementing a good returns process drives repeat orders and improves customer satisfaction. Research by Harris Interactive shows that 85% of customers say they will stop buying from a retailer if the returns process is a hassle and, conversely, 95% will return to the same catalogue or internet retailer if the process is convenient.

Despite this, some e-commerce businesses fail to even consider the returns process, with many leaving it to the customer to make their own arrangements to send items back. Some e-tailers (especially new ones) feel that because their business is small a returns process is unnecessary. Other companies put a solution in place but fail to give it the attention it deserves, meaning that customers are put off by inefficient and inconvenient processes. In fact, in order to encourage customers to make repeat purchases and promote growth, the principle of offering a returns service is important to e-commerce businesses of all sizes.

Getting it right

Undoubtedly, the returns process needs to be carefully thought out. So how do companies ensure that their function will meet customer expectations at the same time as being workable for the business?

There are three key considerations here. First, the system needs to be easy to implement. This involves being scaleable so that as the business grows the system can keep pace with increased traffic. Ideally, if the business is operating in different countries, the system will be rolled out under a single platform. This will not only create consistency for customers but will also reduce implementation costs.

Secondly, whether dealing with international or domestic mailing, it is important that the process is cost effective – whether the service is offered free of charge or at a cost. There can be import and duty considerations for customers located outside the EU, so it’s important that the system is set up correctly in the first place to ensure that the company is complying with regulations and that these costs are considered from the outset.

Lastly, it’s important to step back and view the process from a customer perspective, to ensure that it’s easy to use and reliable. Systems should be tested and tested again before being rolled out to the market.

Cross-border returns

As many companies seek to expand outside the UK, the subject of how to manage returns across borders is becoming more prevalent. Considerations that companies already make for their UK customers are more complicated when applied to customers abroad. Here are some key areas to look at when implementing a cross border returns process:

How easy it is for the customer to return items, for example, where will the drop points be?
How will the costs involved in returning the parcels to the UK be managed?
How long will the process take – how long will the customer have to wait for a refund or replacement item?
How can items in the system be tracked?
How can the rate of returns by market be monitored?
How can stock re-integration be managed?
How easy it is to implement the system?
Is the system scalable and can it grow with your business?
Are there considerations surrounding re-importing items back to the UK from non-EU destinations?

Using a third party

There are lot of considerations here which is why many forward-thinking businesses are partnering with an expert third party to plan and/or administrate the returns solution.

For example, the third-party provider should have a good handle on any tax and duty considerations for customers outside of the EU, and can advise on meeting these specific requirements.

The best providers will tailor the solution to the business, customising it to deal with national and regional differences where necessary. It should also be possible to integrate with existing IT systems and logistics providers to ensure minimal disruption and cost. Ideally, the returns process should be integrated into the website on a white label basis, so that as far as the customer is concerned, everything looks and feels the same.

By outsourcing the returns solution (and potentially the main distribution as well), companies can concentrate on simply producing a good website and online shopping experience for their customers. For small retailers especially, this may be an attractive option.

E-tailers that ignore the returns process do so at their peril. As competition hots up, the returns process is likely to become increasingly important as customers seek the best supplier. There are many considerations to take into account when developing a returns strategy. These not only include current requirements, but also how the business might grow, and whether the returns process can sustain that growth. This may include consideration of overseas expansion and how the company will manage cross-border returns and the ensuing complications.

Ultimately, the returns process needs to be tailor-made and carefully planned from the outset, to ensure that it works for the business and for the customer. Expert providers can help to ensure a smooth and efficient operation.

Source Hellmail

http://www.hellmail.co.uk/postalnews/templates/postal_industry_news.asp?articleid=3215&zoneid=3