Insight / Blog
4 ways to reduce the cost of ecommerce returns
If 20% of your ecommerce orders get returned, a small saving on each return adds up fast. Targeting this area for cost reductions can yield both short-term margin improvements and longer-term value through a simpler, easier customer experience.
1) Restock and resell faster
When the product is with your customer, what subsequently happens to it might appear to be out of your control. However, this is where is little bit of communication can make a big impact. It’s possible to prompt your customers to return unwanted items faster, so you can get them processed, back into stock and resold with the minimum of impact on their retail value.
How? A digital returns portal gives you a means to follow up on the goods after they’ve arrived with the customers (“we hope you’re loving your new product, but if you need to make a return, it couldn’t be easier…”). Or, once a return has been booked, you can send gentle reminders to drop off the package. If it’s cost-effective, you can even incentivise swift returns with discounts or a free delivery codes for future purchases.
2) Not all returns are equal
Different kinds of return should be treated differently. Easier said than done, of course, but it’s pretty obvious that you ideally want some kinds of products back faster than others, and you often want different products in different conditions to end up in different places. Yet almost everyone we talk to in retail has a one-size approach to returns processing. Everything comes back the same way to the same place to be sorted out – whether it’s a sock with a hole in the toe or a $200 pair of sneakers. That leaves money on the table, and a smarter reverse logistics process can stop that from happening.
How? Rules-based intelligence is the smart technology that controls reverse shipping. When your customer books a return through the Doddle Returns Portal, their reason for return automatically triggers the application of the right method and destination. Customer just not keen? Expedited delivery gets the item back in stock quickly. Broken or defective goods? Slower shipping to a different warehouse. Ex-stock products can even be sent directly to charities or routed into recycling.
3) Get real data about what’s coming back
The classic paper-slip-in-the-bag return label doesn’t tell you anything until it’s in your warehouse or processing center. More often than not you have no idea what’s being returned until it arrives. It’s hard to plan and work effectively when you’re working blind. Taking the data from those completed paper return labels and getting it into your inventory management and warehousing systems can be arduous, clunky and time consuming – especially when you have a sudden and unexpected influx of returns. All of this adds up to inefficient (and costly!) resource planning. To plan your reverse logistics more effectively, you need to digitise.
How? Imagine knowing exactly what is due to arrive every day, why it’s coming and what actions need taking. At the point of booking a return, the digital portal connects customer and warehouse, giving visibility of incoming workload, the ability to plan resourcing and saving time by avoiding manual data entry.
4) Answer questions before they’re asked
How’s your customer service looking? Are your CS colleagues using their time to offer genuine sales support, or are they inundated with customers chasing refunds or following up parcels that they’ve returned? This is double trouble for retailers using paper returns, as it’s costing valuable customer service time that could be better applied to growing business, while at the same time it’s frustrating for customers who just want answers.
How? Once again, the power of proactive communication can come to the rescue. A digital returns platform will push alerts to the customer at every stage of their return – through shipping and arrival at the destination, to the issue of a refund. It’s a great way to improve the overall customer experience and create loyal customers, while saving valuable time in customer support. Data plays a big part at every stage, which is no accident. Timely and accurate data is absolutely crucial in reducing the cost of your reverse logistics. But it can also offer some critical business insights that can drive down your return rate overall.
Want to learn more about digital returns platforms? Get in touch to talk to one of our returns consultants.
GM - INMAR Post Purchase Solutions
Dan joined Doddle in 2019 as Chief Revenue Officer of Retail, overseeing our new partnership with Inmar Intelligence. He now heads our joint venture - INMAR Post Purchase Solutions - in North America.
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