The world of e-commerce in in a state of constant evolution, and one area that retailers can't afford to overlook is how best to make returns easy and cheap for customers, while keeping them viable for your business.
In recent times, free returns have become a standard offering for many online retailers. However, this might be on the brink of a big change, with £653 billion worth of products returned in 2021, which is very costly for retailers.
Retail Gazette recently reported that H&M are rolling out paid returns, also adding that the amount of returns being made is costing retailers billions.
ASOS also said that from May onwards this year, its returns rates had increased to above pre-Covid levels.
Boohoo also said earlier this year that its returns were “up significantly” year on year, ahead of pre-pandemic levels.
Business of Fashion has also reported that even Amazon is tweaking its policies.
For years, the e-commerce giant has partnered with certain retailers in the US to encourage customers to bring returns to a central physical location themselves.
However, in April 2023, the company went a step further, introducing a $1 fee for some customers who take their Amazon packages to a UPS store when there is an (Amazon-owned) Whole Foods grocery store close by.
The End of Free Returns?
Free returns have long been a cornerstone of the online shopping experience, providing customers with a safety net if the product received doesn't meet their expectations.
But, with rising operational costs, environmental concerns, and the abuse of return policies, are prompting some retailers to reconsider if offering free returns if worth their time or money.
This perk may no longer be sustainable in the long-term.
Several major players in the industry have already adjusted their policies, either by imposing restocking fees or by eliminating free returns altogether.
As a UK-based e-commerce retailer, it's crucial to closely monitor these developments and assess the potential impact on your business model.
There are several key trends shaping returns in e-commerce:
- Eco-Friendly Returns: As environmental consciousness grows, consumers are increasingly concerned about the environmental impact of returns. Retailers are exploring sustainable packaging, encouraging responsible disposal, and even incentivizing customers to keep or donate unwanted items instead of returning them.
- Automated Returns Processing: To streamline the returns process, many retailers are investing in automation technologies. Artificial intelligence (AI) and machine learning algorithms can create faster and more efficient processing. This reduces the workload on customer service teams and improves overall customer satisfaction.
- Enhanced Product Information: Providing comprehensive product information, including detailed descriptions, images, and customer reviews, can help reduce the likelihood of returns due to mismatched expectations. Investing in high-quality product content can be a proactive measure to address this aspect of returns.
- Leveraging Data Analytics: Utilising data analytics can offer valuable insights into customer behaviour and return patterns. By understanding the reasons behind returns, retailers can implement targeted strategies to minimise them, such as personalised recommendations, improved sizing guides, or addressing common product issues.
- Chat before they send: Some companies are now asking customers to send them images of the item they want to return, especially if this is due to a faulty or damaged item. This gives your teams a chance to assess if the return is valid before it gets put in the post at your expense. This can help to reduce abuse of your returns process, and saving money and helping to still provide honest customers with free returns,
The landscape of returns in e-commerce is undoubtedly evolving, and UK-based retailers must be proactive in adapting to these changes – as we all know, businesses adapt or die.
But you must weigh up all factors.
Retail Gazette cited a recent survey by Klarna, which found that 70% of online shoppers said that if a preferred retailer stopped offering free returns, they might stop shopping there.
Whether it's preparing for the potential end of free returns or embracing emerging trends, staying informed and agile is key to navigating the challenges and ensuring a positive customer experience.
An excellent way of finding out if free returns are still right for you or if you need to adopt a different approach, is to chat to companies like Asendia who can build a returns process that is right for your business, budget and customers.
Remember, each business is unique, so it's essential to tailor your approach based on your specific industry, target audience, and product offerings.
By staying ahead of the curve, UK e-commerce retailers can not only mitigate potential challenges but also position themselves for long-term success in an ever-changing market.
