How to Streamline the Holiday Returns Process

Oct 26, 2011 12:31 AM  By

The 2010 holiday season was a huge success for online retailers. Web merchants saw double-digit increases in total site sales and average order value as consumers shook off the effects of the recession. Cyber Monday made history when consumer spending exceeded $1 billion for the first time in a single day, according to ComScore, illustrating how shoppers are conducting more transactions online.

Those increases have continued into 2011, according to data from the IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report, which suggests the upcoming holiday season could be another record-setting year for the e-commerce industry. With the holidays rapidly approaching, there is a spotlight on a topic many businesses would prefer to avoid – returns.

The returns process can have a tremendous impact on the overall customer experience in retail that can lead to repeat business when done properly. A Forrester Research study shows 80% of consumers are more loyal to retailers with a generous returns policy. Making it easier and less expensive for customers to return products allows companies to build loyalty and gain a key advantage over competitors.

Here are three quick tips that can be implemented now to help retailers create a streamlined and convenient returns process.

  • Create convenience – After the holidays, shoppers do not want to spend a lot of time and effort returning items. Providing pre-printed return labels on outgoing shipments and integrating Web-based returns into an online storefront allows customers to instantly access and print return labels.
  • Act fast – The faster orders are delivered into the hands of customers, the more satisfied they’ll be – the same is true for returns and exchanges. Partnering with a global third party logistics (3PL) provider ensures access to domestic and international air as well as ground freight and small package services through one carrier.
  • Keep customers in the know – Invest in visibility technologies that allow customers to easily track packages during the return leg. Customers want to know when their returns are delivered to the retailer and when they can expect repaired or replacement items.

After the holidays: Returns resolutions

After the holiday rush, retailers can establish longer-term returns solutions. A company’s return process should be efficient, cost-effective and convenient for customers.

Companies working with a 3PL or consultant can conduct a supply chain analysis to determine if their current distribution network is set up to efficiently serve their customer base now and in the future.

For example, many find that switching to a central distribution center model or leveraging a network of multiple distribution facilities allow them to turn around returns and exchanges faster – and more cost effectively.

Retailers should also consider establishing long-term partnerships with 3PLs that have a global network. Some 3PLs have existing infrastructure such as multi-client distribution facilities and field stocking locations that companies can leverage to expand their returns program to more customers in more markets without having to build new facilities.

Another advantage is flexibility: retailers can alter their returns inventory as needed without having to pay for distribution space they are not leveraging by using multi-client facilities.

Knowing where to focus when it comes to returns gives retailers an advantage in terms of improving the customer experience while keeping costs down and carving out a marketplace advantage. That’s gaining a real return on returns and retailers will discover a gift keeps on giving.

Ken Burkeen is marketing director of UPS‘s retail and consumer products division.