As consumers readied themselves for a season’s worth of holiday parties and gift giving last year, stores bustled with shoppers and holiday cheer. Online merchants enjoyed an extra helping of holiday spending, with online sales up 15% between Nov. 1 and Dec. 26, 2011.
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And while increased sales are always a good thing, oftentimes a peak sales season is followed by a peak returns season. This was the case last year, when U.S. consumers were expected to return $46.28 billion in holiday merchandise, and returns of online holiday gifts were expected to hit a record high.
While most pre-holiday planning involves striking the perfect balance among inventory, increased traffic in-store and online, and competitive promotions, a few easy steps in advance of the holiday madness can help ensure post-holiday preparedness as well.
Evaluate your returns process from both within and outside the organization
Returns of mobile and online purchases present new reverse logistics complexities for retailers. Merchants should review existing returns policies and evaluate which channels are open to customers returning items not purchased in-store for convenience and operational efficiency. Can online and mobile shoppers return products in-store? Do mobile and online orders come with a pre-paid, USPS-based return label?
Not only do pre-paid return labels reduce customer frustrations with the return process and improve satisfaction, but a retailer can also choose to deduct the return shipping cost from the refund, or charge a small premium for the use of the service, resulting in an additional opportunity for incremental income.
At the same time, return-related call center costs can be reduced 15 % to 25%through the use of an integrated pre-paid label with clearly stated instructions.
Examine the customer experience to identify possible pain points
A thorough review of web, mobile and in-store paths to purchase all the way through the potential returns process can expose areas where customers are more likely to experience confusion, frustration or delays.
One common area of customer frustration is subpar website performance during peak shopping times, so merchants should measure and improve site performance ahead of the holidays to increase conversion rates online.
Another source of consumer anxiety is order shipments; however, the wait between purchase and delivery can present key opportunities to improve the experience and build customer loyalty.
Each shipping event is an opportunity for merchants to reach customers in new ways with personalized, branded messages based on specific actions. Branded alerts notify customers when a return has been received and when the refund is issued, transforming an anxious wait into a positive brand experience and alleviating the customers’ concerns to improve the chances of a repeat purchase.
The returns process can also create a marketing opportunity. If a consumer makes a return, the merchant can send a coupon with a returned parcel email to drive future purchase activity.
Keeping customers in the loop doesn’t only benefit consumers—it provides door-to-door tracking visibility. The data races back to the retailer ahead of the return package, alerting the retailer to potential issues with quality, sizing, or any other number of problems, in time for buyers and planners to make sale-saving adjustments and negotiate vendor concessions. Great visibility also helps to improve labor planning, inventory management and asset-recovery rates.
Process refunds and store credits as quickly as possible
Another common area of frustration and anxiety for customers is the wait to receive a full or partial refund or store credit once the merchandise has been returned.
Retailers should measure the current wait time to receive a credit and review the processes in place that could delay this transaction, though a quicker and less expensive fix is to communicate often and clearly with the customer.
This holiday season, remember that returns are not just boxes and unwanted merchandise; they could be next holiday season’s customers.
Jane Bergos is vice president of marketing at Newgistics.