\"In some cases, the costs of restoring a returned item for resale can erode margin past the point of profitability.\"<\/span><\/p><\/blockquote>\n\u201cReal-time, accurate stock inventory and supply chain data will provide visibility about where efficiencies can be achieved during the movement of goods. It can also provide a granular view of the profit and loss performance of singular items, enabling retailers to make more informed decisions about how returns are handled. In some cases, the costs of restoring a returned item for resale can erode margin past the point of profitability.\u00a0\u00a0 <\/span><\/p>\n\u201cBy enhancing supply chain efficiencies and reducing any errors or waste associated with returns, retailers can address margin dilution to make returns an affordable option, both for them and their customers.\u201d<\/span><\/p>\nRetail is an ever-evolving industry, constantly under pressure with globalisation and e-commerce having been most impactful. As the world of digital continues to transform, the way consumers shop continues to evolve as they discover new opportunities both online and offline. Shopping has become relative to context, person and place and is no longer about what and where, but how and when. What this brings is real pressure on logistics companies in the supply chain to react quickly to changes in consumer needs.<\/p>\n
Tony Mannix, Clipper<\/p><\/div>\n
Tony Mannix, CEO at leading e-commerce logistics experts Clipper Logistics<\/strong><\/p>\n\"A return is an important customer touchpoint with a retailer, and a good, fast and seamless experience is likely to create repeat orders. Returned goods tie up a huge amount of stock and working capital and can become a retailer\u2019s biggest single inbound source of supply, presenting significant operational challenges. If handled correctly, an efficient returns process can promote customer loyalty whilst maximising resale value and minimising losses. Process time is key, the customer is seeking a refund and the retailer wants the inventory back for resale as soon as possible. The returns hub needs to be extremely flexible, be interfaced directly to the retailer\u2019s systems and be seamless in operation.<\/p>\n
\"\u2018Free returns\u2019 are part of the competitive landscape in retail, where the ease with which a returning customer can transact with the retailer has a strong impact on their likelihood to repurchase. Research shows that 64% of customers are likely to repurchase if you offer a \u2018free return\u2019. For retailers, this means that speed of return and its conversation to Grade A stock quickly is imperative. Consumers expect to be provided with a pre-printed returns label and reusable packaging. They also expect the assurance of timely reimbursement. This is being driven by an ever-increasing percentage of purchases made via mobile devices.<\/p>\n
\"Returned goods tie up a huge amount of stock and working capital and can become a retailer\u2019s biggest single inbound source of supply, presenting significant operational challenges.\"<\/p><\/blockquote>\n
\"Our processes are designed to support retailers. We believe it is imperative to deliver the convenience customers expect when going through the returns process, without adding extra cost and complexity to the supply chain, especially at peak.<\/p>\n
\"But, despite the acceleration to online, the high street is not dead, but the seamless integration of online and offline has become ever more important. We all love the convenience of Click & Collect, for both retailers and consumers. But in today\u2019s rapidly evolving market, customers demand more; online shopping is booming, contactless retail is growing, and standard parcel delivery services no longer cut it.<\/p>\n
\"It\u2019s why we developed Clicklink \u2013 it combines the convenience of Click & Collect with streamlined returns management, supporting retailers in optimising an omnichannel approach. If we can encourage more consumers to do things like Click & Collect, you also create footfall on the high street that benefits retailers, coffee shops and everyone else.<\/p>\n
\"Click & Collect also enables a more sustainable and efficient supply chain solution for retailers. The orders are collected, collated, and delivered in a retail friendly manner. This allows us to consolidate deliveries, reducing the number of vehicles on the road. The returning fleet also delivers any returns directly into our returns management service, allowing items to be made ready for resale much faster, maximising inventory. Our returns solution Boomerang also offers a repair service that ensures items that are damaged, are repaired and then placed back into circulation for re-sale, reducing the number of items that go to landfill.\"<\/p>\n
Jurrie-Jan Tap, Bleckmann<\/p><\/div>\n
Jurrie-Jan Tap, Chief business development officer at global logistics group, Bleckmann<\/strong><\/p>\n\"To reduce returns retailers need to understand why consumers are buying an item - that information is crucial. If a customer ever sends something back it\u2019s usually because it\u2019s not the fit they expected. There are ways of avoiding issues with fit such as detailed product descriptions with measurements and high quality and realistic photography, as well as the use of online fit technology.<\/p>\n
\"Allowing people to order three sizes and send two back is not the way to deal with this. If a customer orders three of the same item in different sizes, reach out with automated software, that can send a message saying 'I see that you are ordering multiple sizes, I\u2019m pretty sure you need this one. Can I help you with this?'<\/p>\n
\"Retailers also\u00a0assume that if you put any hurdles up for returns then people won't buy and I'm not so\u00a0sure.<\/p>\n
\"If you charge for returns, you will find that people suddenly know what they want.\"<\/p><\/blockquote>\n
\"When it comes to charging for returns, what you could say is that returns are only free if there is a problem with the product and not because you've just changed your mind and decided it's not what you want. If you charge for returns, you will find that people suddenly know what they want.<\/p>\n
\"You could take a similar approach to charging for deliveries. People don't always needs things urgently. If you have the option of receiving something in three, four or five days for free, instead of next day, people might take it. You can have options built into your website [for delivery and returns] and only some things are free.<\/p>\n
\"Getting returns back on sale as quickly as possible is key and there are ways you can encourage customers to return items quickly. People have always considered that putting a returns label in the box is the best way, but, again, I would challenge that. We have software that can generate a QR code for your return and you take your parcel and the QR code to the Post Office and they scan it. When customers go through the process of creating a QR code on their phone, you can ask for information on why they are returning an item as well.<\/p>\n
\"This way you can avoid having all these labels that are a waste and also with labels you get zero information on why something is coming back.<\/p>\n
\"You could do a similar thing with returns windows. You can offer a free and 100% refund if people return an item with two weeks but introduce a bit of a penalty if they take longer. It could still be possible for people to get their returns for free if they play by the rules.<\/p>\n
\"I think brands want to charge for returns but they are waiting for the big retailers to take the responsibility first.\"<\/p>\n
Siobhan Gehin, Roland Berger<\/p><\/div>\n
Siobhan Gehin, head of the UK retail and consumer goods practice at global strategists Roland Berger<\/strong><\/p>\n\"Our research estimates that the cost of returning a \u00a330 fashion item can be up to \u00a320. With the online fashion market now worth \u00a332bn, and with around 30 per cent of those fashion items returned last year, and the scale of the problem continuing to grow, reducing this business cost is critical.<\/span><\/p>\n <\/p>\n
\"There is an irony insofar as customers are well-known to favour sellers who make returns easy; therefore, fashion retailers have been driving ease of returns to earn customer loyalty and also get it back into stock ready to re-sell quickly. Returns that sell within two weeks of the original sale can mean the difference between reselling at full price versus having to mark down the item. However, returns have now exploded to an extent where retailers are having to rethink their strategy.<\/p>\n
\"Returns that sell within two weeks of the original sale can mean the difference between reselling at full price versus having to mark down the item. However, returns have now exploded to an extent where retailers are having to rethink their strategy.\"<\/p><\/blockquote>\n
\"There are many approaches that can be taken to help prevent the return in the first place and mitigate the cost of reverse logistics. The solutions do, however, need to embrace a better understanding of customer needs, improved data analysis and investment in technology. Above all, decisions need to involve all the key stake holders from the buying, merchandising, ecommerce, logistics and supply teams.<\/p>\n
\"The most common reasons why a customer makes a return - because it \u00a0does not fit or meet expectations - still hold true. Improvements need to be made at the development stage:\u00a0 design decisions need to be truly customer-centric and based on accurate data; more work can be done on size\/fit optimisation.<\/p>\n
\"On the selling side, there are many innovations that will help better present the product: 3D imagery and virtual fitting tools online are among the technologies in which leading players are investing. Any improvement or innovation that brings the customer closer to the product online will be a considerable help.<\/p>\n
\"However, among the \u201chidden\u201d costs of returns is that around 10% of approved returns are fraudulent (e.g. wardrobing \u2013 buying with the intent to return after one wear). Introducing fraudster detection analytics can reduce the impact. For example, a persistent pattern of buying before the weekend and returning an item early the following week should be a red flag.<\/p>\n
\"The lost margin via disposal, however, accounts for the biggest cost of handling returns, about \u00a33-8 of the \u00a320 cost of that \u00a330 item, so working with recommerce platforms is becoming more common, as is the opening of outlet stores and other \u201cdeadstock\u201d routes such as off-price retailers.<\/p>\n
\"As businesses look to become more sustainable, addressing the \u201cgreen\u201d issue on returns, could see the introduction of more drop off points to reduce the mileage of transport vehicles, changing to electric vehicles and moving to paperless returns \u2013areas where cost savings are also happily in tandem with environmental benefits.\"<\/p>\n
Harry Wheelhouse, Rhenus<\/p><\/div>\n
Harry Wheelhouse, Sector Manager, Rhenus Warehousing Solutions, Lutterworth<\/strong><\/span><\/div>\n\"Generally, the fashion sector has the added pressure of dealing with a high rate of returned items, sometimes up to 40%. In late 2020, consumers were returning around 17 % of clothing bought online.<\/p>\n
\u201cWe\u2019ve seen many consumers move away from visiting high streets and shopping centres, to browsing items from the comfort of their own homes and making purchases at the click of a button. Despite this shift, however, research shows that 46% of shoppers who return products prefer the convenience of returning unwanted items to physical stores. In comparison, 32% preferred to return their packaged items through the Post Office.<\/p>\n
\u201cMethods of purchasing fashion are always evolving, especially as a result of the e-commerce industry experiencing rapidly increasing demand. For many retailers, it is becoming increasingly common for consumers to expect more choice and faster delivery, whilst still desiring lower costs, excellent customer service and a more personalised experience.<\/p>\n
\u201cOn top of this, many consumers now want free returns too, and a negative returns experience can impact brand loyalty.<\/p>\n
\u201cIn order to cope with this increase in both demand and returns, and to make the process quicker yet still cost-effective, retailers are turning to third-party logistics suppliers, who offer post-sale Value Added Services, know-how and scalability in order to process returns efficiently.<\/p>\n
\"Once the return has been made, refunding the money to consumers as quickly as possible is vital. This has a huge impact on brand loyalty.\"<\/p><\/blockquote>\n
\u201cThe use of experienced fashion operatives and the development of innovative solutions and automation can guarantee an increase in delivery speeds, from retailer to consumer and back again, ensuring that stock is able to quickly be\u00a0returned to sale. From a cost perspective, evolving these systems will also provide retailers with a more beneficial, long-term solution.<\/p>\n
\u201cOnce the return has been made, refunding the money to consumers as quickly as possible is vital. This has a huge impact on brand loyalty, and is one of the key factors that determine whether the consumer will continue to buy from a specific retailer.<\/p>\n
\u201cAs a leading logistics provider ourselves, we believe adaptability is key. Making it a priority to keep on top of the ever-evolving requirements of the fashion sector, by continuously improving speed, innovation and efficiency, and partnering with third-party suppliers, can improve the returns process, costs and retailer-to-consumer relationships.\u201d<\/p>\n
Tia Wallace, DHL<\/p><\/div>\n
Tia Wallace, Director of Business Development, eCommerce, DHL Supply Chain<\/strong><\/p>\n\"The drive to offer shoppers ease and convenience has led to an expectation of free shipping and returns. However, the ubiquity of free returns can cause significant problems for both the retailer, the supply chain and importantly, the environment. Key to tackling this is designing product flows and cycles in the most suitable, efficient, and environmentally friendly way.<\/p>\n
\"For logistics teams one of the challenges lies in enabling customers to return products as quickly as possible, and then ensuring they are processed effectively to minimise loss in value and reduce the risk of products being disposed of because they\u2019ve become \u2018outdated\u2019.<\/p>\n
\"Once a return is received, the next stage is smart handling of the product to extract maximum value and reduce waste. Our digital returns system helps to tackle this problem, \u2018grading\u2019 returns and enabling colleagues to make the right choices on what to do with the product next, whether that\u2019s repatriating the stock to enable it to be re-sold at full price, or re-merchandised at a discount rate, or recycled.<\/p>\n
\"In cases where speed is not the main objective, there are still ways in which retailers can bring down the financial and environmental cost of returns, for example combining shipments to reduce wasted road miles, and combining consumer deliveries along with collections.\"<\/p><\/blockquote>\n
\"In cases where speed is not the main objective, there are still ways in which retailers can bring down the financial and environmental cost of returns, for example combining shipments to reduce wasted road miles, and combining consumer deliveries along with collections. To match customer return preferences with logistics capacities, digital portals are a valuable tool and logistics companies play a key role in making these solutions more widely available, as they have the scale and breadth that no single retailer or manufacturer has.<\/p>\n
\"Digital technologies can also have a significant impact in reducing the overall need for returns by offering more meaningful information to guide the purchase decision. For example, VR-assisted garment size determination can increase the likelihood that the product received by consumers matches their hopes and expectations. This can potentially reduce ordering of identical items in adjacent sizes, which is typically caused by a lack of information and certainty around sizing. Moreover, campaigns promoting consumer awareness of the environmental impact of overordering can be a helpful approach.<\/p>\n
\"While there\u2019s still work to be done, reducing returns and implementing effective circular product flows, presents an exciting new opportunity for the fashion industry to reduce emissions and waste, and improve profits.\"<\/p>\n
MySize<\/p><\/div>\n
Javier Brandwain, Chief commercial officer at online fit specialist, MySize<\/strong><\/p>\n\"With consumers more attuned to online shopping experiences, it\u2019s more important than ever for e-tailers to continue to offer better shopping experiences through strategic design and data-driven enhancements.<\/p>\n
\"E-tailers need to satisfy a wide variety of consumer concerns through AI-driven measurement technology, meeting the challenges of at-home purchasing experiences and therefore reducing returns. Implementing this technology suggests an overall increase in profitability potential for e-tailers\/retailers.<\/p>\n
\"As pandemic restrictions come to an end, MySize sought to better assess how shoppers make key purchasing decisions around sizing when ordering apparel and the elements that most impact customer returns.<\/p>\n
\"MySize surveyed 1,000+ respondents across Europe, using a representative sampling method of all ages\/genders. Respondents ranged in age from 18-65+. MySize asked 10 questions regarding customer preferences and experiences in online and in-person shopping, as well as reasons for returning apparel\/footwear.<\/p>\n
\"33% of consumers admit to engaging in bracketing, a practice where one buys multiple sizes\/colours\/styles of an item to try on at home with the intention of returning most items. Bracketing costs retailers millions a year.\"<\/p><\/blockquote>\n
\"The data derived from this survey revealed that 50% of consumers return apparel\/footwear bought online because of sizing issues. 33% of respondents admit to engaging in bracketing, a practice where one buys multiple sizes\/colours\/styles of an item to try on at home with the intention of returning most items. Bracketing costs retailers millions a year, but it\u2019s viewed as a tool that gives peace-of-mind to consumers who are unsure if garments they order online will properly fit them.<\/p>\n
\"Bringing customers the convenience of at-home shopping, and the peace of mind knowing they can confidently order a garment that fits, is mission critical. Superior at-home, reliable measurement and sizing technology can help deliver what customers want, leading to increased customer accessibility, lower return rates, and a significant boost to consumer satisfaction and higher-value purchases.<\/p>\n
\"With \u2018wrong size\u2019 as the #1 reason for returns across the board, it\u2019s time for retailers to step up to the challenge and think about sustainability.\"<\/p>\n","protected":false},"excerpt":{"rendered":"
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E-commerce: Have we reached the point of diminishing returns? - TheIndustry.fashion<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n