Are Retailers capturing the REASON for their Customer's Product Returns?

One of the most sobering facts that highlights the sheer challenge of managing Product Returns for Retailers both on and offline is:

According to the National Retail Federation in the USA, if product returns were a retailer, it would rank #2 on the Stores magazine Top 100 Retailers list – three times the size of the current #2 retailer

So, the dam has now well and truly broken.

There isn’t a Retailer on the planet who isn’t reacting to the Product Returns Challenge in some way at least. How can they afford not to?

The problem seems, however, that the sector is nowhere near a uniformly agreed solution (if one exists!)

Across the sector, retailers/e-tailers are approaching the Product Returns process very differently:

  • Undoubtedly, some are still presenting difficult/expensive product return processes, aimed at reducing the likelihood of the customer to be bothered to actually return the product
  • Simultaneously, at the other end of the spectrum, many e-commerce sites have joined their High Street counterparts to now offer FREE returns
  • Whilst, ASOS only last week, perhaps in a direct reaction to the cost of operating a FREE Returns process, emailed ‘000s of customers, warning them of being black-listed, if their Product Returns rate against items purchased remains at too high a percentage
  • Many organisations have focused on cost reduction by partnering with third parties, to help plug into their economies of scale in centralising the Product Returns process

To have such disparate and diverse approaches to Product Returns management, means by definition that not everybody can be getting it right – it also suggests that some Retailers/E-tailers have failed to ask the customer the obvious question – WHY are you returning this/these product(s)?

From our experience at Phoenix Digital whilst delivering digital Product Return Solutions for our clients over the years, the answer to WHY? differs across product type, whether purchased on/offline, cost of product etc.

Thus, in our opinion, HOW? a Retailer or E-commerce site optimises it’s Product Return Process has to be dictated by WHY their products are returned in the first place, in order to be truly successful.

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