It is becoming more common for consumers to shop online. This, of course, also leads to people acting goods they have not seen in advance in reality. The first meeting of purchased goods is thus held at home. This development requires online shops to adapt to the customer's new and increasingly higher requirements. For example, it will be more important to focus on an efficient delivery process. But, does it keep offering the customer quick delivery? Of course, when consumers act online, goods do not correspond to their expectations. What then does the consumer do? The item is returned to you in return.
In this article, I focus on the return management of online shops, and the following issues:
- Return creates potential economic problems for online shops
- Why should you offer free returns?
- How to handle return in the best way?
Customer power creates challenges
A problem area in e-commerce is the customer's power, especially when it comes to the right of withdrawal. The consumer has a long withdrawal right on purchase. The right of withdrawal gives 14 days automatic cancellation. In addition, many who run online stores know that return security is important for the customer, and so many offer open purchases over a month, and some even longer.
Long withdrawal rights make it difficult to sell the item again
This may become problematic when customers become less loyal as well as more informed and cream. Especially the clothing industry is experiencing problems here, as the right of withdrawal for seasonal products is usually longer than the season itself. When the threshold for making purchases via the Internet becomes lower, and the customer, for example, tries clothes at home after having received them, the return volume is also likely to increase. For example, Zalando has a return on the whole 50%So let's say that this is the same thing as that. This can create challenges related to how to store goods you cannot sell until the same season of the following year.
Return – who should pay?
What happens when the customer wants to deliver the goods back? Paragraph 15 of the Act of Undo of Undo states that return costs are initially to be borne by the consumer. According to Consumer Protection Authority this applies as long as the return costs are declared in advance of the purchase.
Offering free return is a competitive advantage
Nevertheless, return is often associated with high costs for the dealer. Many online shops offer free shipping to the consumer when they are supplied with a good they have purchased, at least over a certain purchase price. Although you, as a dealer, are not initially obliged to bear the return costs, this is also a competitive area. There are growing numbers of players fighting for customers, and many of the large online shops offer the customer free of charge. For price-conscious consumers who can choose between a set of online shops offering similar products, free shipping and return will be a competitive advantage.
60% check the online store return conditions
Modern consumers are conscious of the return process of online shops, and expect it to be effective, free of charge and to get back the money they paid for the goods quickly. According to Bring checks 60% of consumers return conditions to the online store they shop off.
Returns can be costly for you
If you choose to offer customers both free shipping and return, you are at worst liable to pay double shipping costs. Have you thought that you might actually experience that the cost of return may lead to the sale ending with financial losses? For example, you might want a customer to trade five goods by you online, and you offer free returns, where customers return four of the goods. Then it is not certain the price paid by the customer for this one product that was retained actually covers the costs you yourself received from return. This may also be a problem that can increase with increasing number of sales and offer days. The extent of such well-known days and periods is increasing. Examples are black Friday, cyber Monday, Valentines day and January sales, as well as random sales periods.
Bring has made a customer survey, which gives an image of today's customers' demands at the same time. Here they find that return should be seen as an opportunity to make the customer happy, rather than to consider it an expense, and that an additional service that may become more important in the future is to pick up return on the door of the customer. This may give an indication of the challenges and assessments that retailers will have to face.
How to handle return in an economically sustainable way
This Article from E-commerce.no takes care of how online logistics would be in 2017. Here they preached, among other things, more effective return management. A simple return process was pulled out as a success factor. They wrote that 2017 would be the year when online shops would get their eyes on return-related costs, with a focus on the handling costs of the warehouse. But, how should you in future really approximate the return process in practice?
Invest in good relations with your customers
Loyal customers are the most profitable. When it comes to customers today, it might be smart to think more long-term. Today’s consumers are characterised by their becoming increasingly loyal and more creamy. On the other hand, too many alternatives can be provided as consumers, and trading by new actors is always associated with some uncertainty. Invest in making the customer happy throughout the purchase process with you, as long as it provides positive rash on the bottom line. Making the delivery and return process simple and free of charge for the customer helps to attract new customers while creating a lasting customer relationship.
Do not throw returned goods
If you have a online store with goods it is difficult to sell on if the seal is broken, you do not necessarily have to throw those who come in return. There are other solutions.
Sell the goods via online store
Sell them at a reduced price, for example! Many consumers are price conscious, and they are willing to trade even though some others have tested the item first. One option is to sell the returned goods at a reduced price at their own online store. For example, you create a separate section for returned goods, so that the customer can search through them separately from completely new goods.
Sell the goods in the physical store
Another option is to sell returned goods in a physical store, if you have this in addition to a online store. If you have the opportunity, you can use an omnichannel strategy by giving the customer the opportunity to return goods directly to the store. This avoids the costs of returning to the warehouse.
Sell the goods for outlet shops
Some big chains drive their own outlet shops where returned goods are sold. If you don't have a physical store yourself and you don't have the ability to drive your own outlet, you can often sell goods to these or to self-intentional outlet actors.
Return logistics affects costs
When you are running a online store, you should seriously ensure that the handling of goods from the customer back to the online store is effective. If you ignore the importance of this, you will probably become some costly experiences richer (while becoming narrower). Those who run small online stores that experience a lot of returns are very vulnerable to the costs associated with the return process.
What you want is for goods to spend as little time as possible on a warehouse, and hopefully they won't get back there again. Although some reduction in return can be achieved by, for example, having good product descriptions prior to purchase, it is unfortunately a wish to avoid it altogether.
It is essential to identify all costs associated with the handling of return and to identify where costs can be reduced if small margins are used. Some practical tips that can make the return process simpler and more cost-effective are:
- Automating what is automated can.
- Make sure you have good things transport contracts with positive return where possible.
- Sending out deliveries including finished return labels, making the return process easier for both parties. This can save you to have to handle logistics after the customer has decided to return the goods.
- Make sure that the delivery package can also be used for return.
Conclusion
Return management is a problem that quickly creates problems for online stores that do not have a deliberate relationship with it. On the other hand, it can contribute to competitive advantage and loyal customers if they do so correctly. In other words, you who run online shop don't necessarily have to fear return just because it is often linked to expenses. There are ways to reduce both return and costs without reducing costs to an increasingly demanding customer. Make sure you have a strategic approach to the return management and look for solutions to save costs. In particular, optimize logistics around this!