Insight / Blog

A new mindset for returns in Germany

Posted on 13th May 2021

Summary: PUDO is the preferred way to return items in germany – and could offer a way to ease pressure and reduce returns costs.

This blog article is part of our Germany market insight series, exploring opportunities for parcel carriers and offering insight and comparison to other parcel markets around the world.

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It may be the case that the majority of shoppers want home delivery. But that doesn’t mean PUDO points and lockers are being ignored – far from it. They are the preferred way to return items in Germany. 

Many retailers will include a free returns label in with a purchase. All the customer needs to do if they change their mind is package up their unwanted items and leave them in a locker or at a PUDO counter. The ease with which returns are handled, from the shoppers’ perspective at least, is one reason some customers treat online shopping like a visit to a store changing room. Multiple items in different colour or size combinations are routinely ordered – most are subsequently returned.

There is a perception that the existence of and usage of alternative delivery options actually leads to increased returns. The concept is that shoppers simply leave purchases uncollected out of a sense of ‘buyer’s remorse’. These uncollected parcels in lockers and PUDOs are automatically sent back to the retailer, who automatically refunds the shopper.

The belief in buyers’ regret, and that a noticeable proportion of sales that go to a PUDO point rather than someone’s home will never be picked up at all, is based on a number of assumptions. Maybe the shopper has been too busy. Maybe, during periods of lockdown since early 2020, it has simply been too challenging to get out and collect things. Or maybe the shopper had second thoughts sometime after hitting the buy button. But not all of those assumptions can be borne out by recourse to data.

The challenge

Whatever the exact cause, there are around 350 million returns per year in Germany. The phenomenon of buyers’ regret might account for some of that, of course. But without a detailed analysis of return rates from home and PUDO, coupled with research into returners’ motives, buyers’ regrets are really only hypothetical.

Some retailers don’t offer PUDO as a delivery option. It is hard to apportion 100% of the responsibility for that to a single cause. But whatever the cause, encouraging more away-from-home delivery and collection could help ease some of the pressure on networks and halt escalating costs.

The opportunity

Let’s assume a shopper regrets the purchase they made and leaves it uncollected in a locker to be returned. Setting aside, just for a moment, any concerns about the effective use of data and communications, that isn’t necessarily such a bad thing. An untouched item in its original packaging is a far easier thing to realise full value from once its back on sale.

If dealing with uncollected parcels is a problem that may be because of underlying factors. Fixing those issues could represent a significant opportunity. If the retailer and carrier aren’t making the most of every opportunity to encourage a customer to collect their item, there may be something missing from their customer journey and communication flow. If getting uncollected items back on sale quickly is costly or time-consuming, there may be problems with the way the network is oriented.

Or could it be as simple as the carrier using PUDO points that aren’t conveniently located for a particular customer. In a situation like that, understanding the distance a customer will have to travel to collect something ought to be reflected in the approach to communicating with that customer. It could even lead to co-marketing opportunities with businesses near the locker or PUDO point: if the promise of a free latte is all it takes to get someone to pick something up, it might be a worthwhile undertaking.

It’s also worth appreciating that research suggests that shoppers who use PUDOs have a better customer experience, which increases their loyalty to the retailer[1]. Carriers have the chance to turn the assumptions on their head when it comes to PUDOs, and deliver improved customer experience and retention to retailers with a sophisticated PUDO proposition.

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