By 2020 the e-commerce industry’s revenue is expected to reach £500bn. A wealth of opportunity awaits online sellers. Yet the rise of the ‘serial returner’ (individuals who buy goods but repeatedly return them after a few days and uses) presents a huge barrier for businesses hoping to succeed and grow over the coming years.
Besides creating a ‘phantom’ economy of £7bn of lost revenue, sellers are having to cater to the additional pressure of unexpected customer demand for free shipping and returns. This comes at a time of proposed tax for Internet retailers, a rising numbers of cyber-attacks on ecommerce websites, and increasing labour costs for delivery services. Then there’s the elephant in the room; Brexit.
There’s no doubt that this will put a huge weight on company supply-lines and labour accessibility, combined with fluctuating inflation in the past two years, have reduced the competitive advantage internet retailers once had.
Repeat return phenomenon
Returning goods is simpler, cheaper, and more accessible than ever before. Research from Barclaycard shows that 26% of retailers have experienced an increase in return rates over the past two years and a further 40% of fashion brands reported a rise in refunds. Arguably, online clothes shopping is driving the trend of serial returning. The research also highlights that on average, Brits spend £313 on online clothes shopping each year – but they end up sending £146 of it back.
Rising return rates puts a huge amount of pressure on the seller to facilitate a smooth customer queries and returns process, which can take away from actual selling. Amazon is taking a tougher line with repeat offenders who return too many orders or return items for reasons deemed unacceptable But for smaller ecommerce sellers, tough love is not an option. In most cases, when sellers have tried to limit returns through shipping charges and refund limits, this has resulted in lost business. Savvy customers are examining such restrictions before they make online purchases and are shopping elsewhere.
Returns are expensive for retailers; especially smaller business owners who cannot afford to foot the heavy bill of repeat returns nor lose custom. But not every return is out of the seller’s control. Description, picking and packaging errors as a reason for frequent returns can be eased by the ecommerce provider. Sellers must improve things like warehouse layout and processes, including quality control checks and streamlined workflows. For online sellers to be able to facilitate a web of returns, they need a dynamic, smart, and integrated solution to connect all marketplaces and channels.
Faster action, smarter evaluation
Response times can make or break an e-commerce business. Today’s consumers are more connected than ever before and expect lightning-fast responses to their queries and complaints. To combat the surging pressure, some sellers have centralised customer service, shipping, and other services into one manageable platform.This level of integration enables vendors to reduce unnecessary service costs.
Yet, sellers must be able to analyse and evaluate repeated customer returns and act rapidly to ensure that customers are not breaking company return policies, and that service-level agreements with different ecommerce channels are being kept to. Having clear visibility of customer information through a single lens lays a solid foundation for online sellers to connect all aspects of their business together and alleviate any blind spots along the supply chain, such as in fulfilment and inventory.
Well informed sellers are already capitalising on modern technologies. Combined, AI and ML can omit the heavy burden of repetitive tasks, automate intelligent responses and free up the seller’s time to focus on growing their sales. Predictive algorithms can scan the contents of customer support tickets to detect the prevailing sentiment in them and suggest the best response.
This can dramatically accelerate the speed in which customer inquiries are handled. Furthermore, this type of intelligence can predict the right response, while templates and autoresponders ensure they hit marketplace Service Level Agreements (SLAs). By creating a seamless customer experience, sellers can also encourage the customer to provide much-valued positive reviews, positioning them higher in marketplace rankings and increasing the likelihood of repeat and prospective business.
It is an inevitable truth that returns caused by customers overspending, changing minds, or making redundant purchases will always be a hurdle the ecommerce sector must battle against. But tighter returns policies, smarter technology and a customer-centric mindset can certainly pave the way for a more robust response to return rates.
As ecommerce continually develops and becomes more convoluted, vendors must remember that providing the greatest satisfaction to customers will always be an essential part of being successful. The problem of serial returning should be seen only through this light.
By Ray Nolan, CEO, eDesk by xSellco