Processing returns is a fact of life for retailers.
Regardless of your business model or customer experience, consumers still return $380 billion worth of goods each year. Logistics can be costly and complicated, but it’s just the cost of doing business.
The return-induced headaches you experience year-round turn into migraines at the start of every new year. Following the highs of the holiday shopping season, consumers will return $90 billion worth of goods—nearly 25% of returns for the entire year.
For many retailers, the rush of holiday returns sparks a scramble to minimize losses. And while your bottom line is important, one thing is often forgotten in the “return as a necessary evil” mindset. The customer experience.
Now more than ever, retailers must broaden the scope of customer-centric initiatives to improve fulfillment.
The Buy Online, Return in Store Shift
Check out this quote pulled from a Washington Post article about the complicated relationship between consumers and online returns:
“There’s something about the black hole of online returns that I can’t handle. To be honest, I cannot remember the last time I packed something up and shipped it back. I will literally do anything else: Give it to my mom, donate it, sell it on eBay.”
You may process millions of dollars worth of returns, but that doesn’t mean customers are happy with the experience. How many people want to hunt down a box, pack items properly, and follow every step of your return policy only to wait days for a refund?
It’s a frustrating experience. And now, many retailers are turning to in-store returns to solve the problem.
The two most prominent examples come from the battling giants, Walmart and Amazon.
Walmart has revamped its mobile app to kickstart returns. From there, customers can head to the nearest brick-and-mortar location, skip ahead of checkout lines, and hand the return item to an employee to complete the process. Amazon has partnered with Kohl’s and is leveraging its Whole Foods acquisition to take in-store returns and save customers from the hassles of packing and shipping unwanted items.
These initiatives (and many others) come in response to the growing sentiment that consumers want to buy online and return in-store. But is the “buy online, return in store” model really the best way to improve return experiences?
This approach overcomes many points of friction in the return experience—and even alleviates backend costs to a degree. However, improving return experiences requires more than just this omnichannel tactic.
From Transactions to Lifetime Customer Conversations
Bridging the gap between brick-and-mortar stores and online shopping is important. It’s one step in providing a more seamless retail experience.
However, there’s a deeper problem impacting return experiences. So many retailers still focus on the customer journey as transactional. You think, “if Customer X wants to return this item, she can bring it back to the store instead of shipping it herself.”
Providing this return option helps make life easier for the customer and saves you some money. But what’s the context of the return? Will the customer just replace the item with one from your competitor?
It’s easier to build customer loyalty when you view the entire experience—from research through conversion, to fulfillment and future visits—as a single conversation rather than many individual transactions. Continuously adding context to the relationship is how you create increasingly-personalized experiences.
Retailers want to improve personalization but often stop short at conversion. In The State of Retailing Online 2017, Forrester found that just 15% retailers are bringing this customer-centric mentality to fulfillment.
The great return experience opportunity isn’t just to take advantage of in-store returns. It’s to continuously manage the state of customer experiences (including fulfillment) to keep conversations intact. Without these unique conversation experiences, you’ll be vulnerable to Amazon.
The Future of Fulfillment
At this point, the retail experience conversation transcends brick-and-mortar vs. eCommerce vs. mobile commerce.
It’s all just commerce and the retailers with the best end-to-end experiences will win.
And as more commerce moves online, the fulfillment aspect of these experiences will become more important. Who will focus on more innovative return processes?
Companies like Stitch Fix and Trunk Club have already taken another step to provide a “return by design” experience. Rather than offering a fallback plan in case of return, these businesses build returns into each transaction. And Amazon is following suit with Prime Wardrobe.
The “return by design” model further collapses the retail experience. It eliminates the hassles of shipping returns without sending consumers to a brick-and-mortar store. But that doesn’t mean retailers should start debating between “return by design” and in-store returns. Enable customers to take whichever path is best for them and facilitate the conversation wherever they go.
If you want to learn more about taking a more conversational approach to retail, download The Retail Digital Executive’s Playbook for Conversational Commerce.