Reverse Logistics
Here are some key metrics to support the return optimization
business case:
* 85% of customers say they will stop buying from a retailer if
the returns process is a hassle (Harris Interactive)
* 95% of customers say that they will likely shop with a catalog
or internet retailer again if the returns process is convenient
(Harris Interactive)
* 40% of shoppers don't buy online due to returns difficulty
(Jupiter Research)
* Customers who have their complaint resolved quickly have a
re-purchase intention rate of 82% (McKinsey)
The increased importance of online returns
Returns are an inevitable fact of online retail. As the depth of
online product categories became apparent in the last three
years, the importance of online return policies became painfully
obvious. Provide a bad returns experience and you undoubtedly
reduce the chance of a customer coming back for a repeat
purchase.
For example, sectors such as high-end apparel, consumer returns
reach levels as high as 20% and an efficient returns process is
critical to overall success. Quicker inventory cycles and
fluctuating retail prices make it important to not only process
the return effectively for the consumer, but also get it in the
warehouse quickly for re-sale.
Reverse Logistics solve fundamental business problems
Retailers are now being proactive and turning these operational
challenges into competitive advantages and incremental revenue
streams. By investing in solutions that integrate key platform
components and data, online retailers are able to offer
self-service return capabilities to consumers.
A typical reverse logistics solution allows the consumer to more
easily initiate the return by incorporating a pre-paid postage
label within the box. This label can be integrated within the
packing slip or it can be a separate stand-alone piece. Because
the label generation is initiated by the warehouse management
system, the label is able to capture key customer information
for tracking purposes, both for CSR's and the end consumer.
The label provides one primary source of value to the customer -
convenience. No post office trip is needed and retailers improve
overall customer satisfaction while facilitating the product
return to the distribution center.
When consumers initiate returns through this process, retailers
typically charge them a "handling fee". This fee is typically
20% higher than the postage charge that was provided by the
reverse logistics service provider. This dollar spread, between
what is charged to the customer and what has been billed to the
retailer for postage, generates direct and measurable profits
for retailers.
Improving communication with online consumers
A reverse logistics solution can drastically improve customer
communication during the return process. Newgistics is a great
example of a reverse logistics provider that has
customer-centric communication processes embedded in their
overall solution.
After a return package is picked up from a consumer location, it
is sent to a Newgistics hub for sorting and re-locating. During
this process, there are strategic scanning mechanisms used to
facilitate triggered and branded communication emails.
A consumer receives "retailer branded" email notifications when
certain milestones are achieved in the return process, such as:
* Return receipt o (Ex. We have received your return and you
should get a credit in the following days).
* Return Completion o (Ex. Your return has been processed)
Quick receipt of these emails enhances the confidence level of
customers, reduces inbound customer service calls, and provides
another value-added feature to boost the eCommerce relationship.
Your company is taking a great risk if it does not provide a
great post-purchase site experience. Feel free to contact
Trinity to learn more about this type of initiative and how we
can help in discovery, scope, and implementation efforts.