Returns processes and the costs associated with them have been plaguing retailers ever since the dawn of eCommerce. With the knowledge that 92 percent of consumers will buy something again if returns are easy, brands are trying to balance the cost implications of returns on their operations with customer retention, but what if there was a way to solve this?
Refreshing outdated warehouse technology that is slowing retailers down is the way to allow brands to create a seamless fulfillment and returns operation. As eCommerce takes on an even bigger role in retail, many businesses have focussed their efforts on building the best online experience for their customers but have not thought about how the growth of online shopping would impact their delivery and returns procedures.
Ecommerce activity skyrocketed in 2020, with the UK seeing a 46 percent increase in online sales. The response from retailers was lackluster, with many just extending their returns policies to accommodate the unease of the pandemic. This in turn impacted the amount of time it took to process returns and send refunds, causing disgruntled customers and decreasing customer loyalty. Instead, retailers should look to innovative and scalable technologies like return management solutions powered by Artificial Intelligence (AI)- driven robots to combat the large volumes of returns efficiently.
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The operational challenge
One of the biggest challenges for retailers when considering returns is the operational battle. 41 percent of customers deliberately order more than they need and have intentions of making a return, which is bound to badly affect retailers’ profit margins and slow operations down. Brands need to put systems in place to make sure that they are recouping as much value as they can, whilst ensuring that returned products are ready to be re-sold as quickly as possible.
Automated systems and fulfillment software solutions are the answer. Using automation in returns processes can allow items to be moved from the returns pile back into inventory faster, ready for other customers to purchase that item. As more retailers move away from paper return slips to online methods, using systems like inbound sortation allow retailers to manage the whole process from a screen, instead of using the slips.
Not only is this better for the environment, but retailers can also understand the reasons why items were returned faster and sort them accordingly as one barrier has been removed, to ensure that damaged or faulty items are not re-sold. Both of these factors are also vital to maintaining consumer satisfaction, as many customers are looking to brands who champion sustainability, as well the attention to detail of ensuring faulty items are not sold on to other customers.
Improving the customer experience
These automated systems can also help to sort returns immediately after being received by the retailer, which can allow them to manage consumer expectations and improve the customer experience. This is vital since 89 percent of shoppers will be less likely to shop if they have a negative return experience. Ensuring that a detailed and reliable returns policy is in place is key to retaining customer loyalty and repeat purchases. Customers want to understand how long they have to make a decision on the items, and how long it will be until the money is back into their account. With automated systems able to speed the return process on the retailer’s end, retailers can capitalize on this and build consumer confidence in their brand by offering return windows that are comfortable to customers.
Understanding customer expectations in regards to returns can also help to comprehend operational priorities, and where to put the most investment in order to see the biggest return. Most customers expect next-day delivery to be an option at a minimum, sometimes even same-day delivery, so speed is critical. This is mirrored in returns expectations. Automated solutions can allow retailers to react at speed and handle high levels of returns during peak seasons, ensuring that every customers’ return is handled efficiently.
Using fulfillment technologies like returns management software can enable retailers to be flexible as needed to respond to changes in shopping habits and peaks and troughs inactivity. Being able to scale and flex to customer demands will be key to optimizing retailers’ multi-channel strategy, as different channels will peak at different times, innovative fulfillment technology enables retailers to manage this effectively.
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Partnerships are key
Retailers cannot go it alone, though. To effectively manage returns operations, retailers must partner with a trusted fulfillment technology company to get the biggest return on investment. Technology partners can analyze the weak points in operations and make improvements to ensure the returns process runs smoothly and to ensure that retailers are able to cope with the fluctuating demand across every channel.
Technology companies can allow retailers to get on top of their returns operations by: enabling fast inbound sortation giving retailers the ability to sort high volumes of returned goods; quick put away of returned items, items go back to inventory faster allowing improved turnaround of goods; optimized storage, using specially designed storage and allowing SKU mixing; and prioritized picking for returned items. All of this creates an efficient and manageable solution for businesses, no matter their size.
The time is now
Running a complex operation such as that of returns can take a toll on retailers and their budgets. By partnering with a technology company, retailers can improve efficiencies whilst remain cost-effective. Given that these operations can cost up 48 percent of a growing enterprise’s total revenue, balancing cost with productivity needs to be a priority for the rising number of small businesses.
With the rise of eCommerce not going away any time soon, returns can no longer be put to one side to think about at a later date. Customer loyalty is fickle, and customers will move to competitors if returns processes and policies are not good enough. Utilizing fulfillment technologies, such as those powered by AI-driven robots, can allow retailers to gain an edge over their competitors, retain customers and win new ones, and increase conversion rates.
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Akash Gupta, CTO, GreyOrange