The Impact of Customer Returns on UK Retailers

  • Category: Online sales, Customer returns, UK Retailers, Retail, ecommerce
  • By: Davinia Hamilton-Maddox
  • Jan 22, 2019

How the Phoenix Digital ‘Retail Returns Optimisation’ Solution is combining huge cost-savings, alongside improved Customer Experience.

Naturally, product returns go hand in hand with running successful ecommerce and omnichannel operations. It is an area of the business that can only attract cost, without the realistic opportunity of ever becoming a relevant and sustainable revenue stream.

This goes someway to explaining how so many omnichannel retailers and e-commerce sites, are guilty of applying a lack of investment into the area’s processes and customer touchpoints, when compared to the front-end sales journey and acquiring the customer in the first place.

Consider these stats from a large, 2018 survey undertaken by ShipBob (a huge, US based e-commerce fulfilment specialist organisation) around Product Returns and Customer expectations:

  • Almost 1 in 2 people (48%) have returned an online purchase in the past 12 months
  • 95% of shoppers who were happy with the returns process would purchase from the same retailer again
  • However, shoppers who were left unhappy with the returns process are 3x more likely NEVER to shop with the same retailer again

A number of e-commerce and omni-channel businesses are currently and significantly differentiating themselves to their customers, by matching exemplary customer sales journeys with exemplary product return journeys… and their customers are reflecting their satisfaction, with repeat orders.

We ourselves at Phoenix Digital, have developed a Retail Returns Optimisation Solution, which we have adapted and made bespoke for the likes of Argos and Bush. The results have been substantial, measured in:

  • millions of pounds worth of annual cost savings
  • significant improvements on the time needed to train and apply time to managing the returns process itself
  • a significant increase in Customer Experience

The secret is careful diagnosis and planning.

These are the 4 key areas that Phoenix Digital’s Retail Returns Optimisation Solution seamlessly helps take the headache out of returns.

  1. Applying logic and AI to product detail pages We reduce the likelihood of returns to start with, ensuring online product images and descriptions are as accurate as possible. We incorporate AI where relevant so that the customer can more easily ‘visualise’ the product in situ. As Returns process specialists, we often advise using video and incorporating reviews and ratings.

  2. Capturing data around the reason for returns Phoenix Digital always establishes an effective data capture process around the cause of returns, so that our client can track, for instance, how many returns are due to the product not meeting expectation of size, colour or feature. With such insight, we see clients then confidently able to adapt either the product itself or a more befitting description, in order to alleviate the misalignment of customer expectations around the product.

  3. Applying proven digital technologies The team here at Phoenix Digital have developed powerful, online fitting tools for fashion and homeware products, video and virtual reality experiences for electrical/complex products, tangibly reducing the likelihood of returns.

  4. Supporting staff within the store network We encourage our clients to incorporate the digital platforms that we build for their Product Return Process (be that incorporated into the existing company website/e-commerce site or maintained separately), to also be used as an instore Customer Service guide for product queries.

This use of Phoenix Digital’s Retail technology solutions, has had the additional benefit of reducing product training time/cost requirements and adding to a seamless Customer Experience, to that gained online.