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Reverse Logistics and eCommerce It’s no secret that a positive experience delivered to a customer determines whether that customer will come back. Retailers must enhance the user experience prior to pressing the “buy” button but also focus on the post-purchase site experience to keep customer retention metrics at satisfactory levels. Here are some key metrics to support the return optimization business case:
The increased importance of online returns Returns are an inevitable fact of online retail. As the depth of online product categories became apparent in the last three years, the importance of online return policies became painfully obvious. Provide a bad returns experience and you undoubtedly reduce the chance of a customer coming back for a repeat purchase. For example, sectors such as high-end apparel, consumer returns reach levels as high as 20% and an efficient returns process is critical to overall success. Quicker inventory cycles and fluctuating retail prices make it important to not only process the return effectively for the consumer, but also get it in the warehouse quickly for re-sale. Reverse Logistics solve fundamental business problems Retailers are now being proactive and turning these operational challenges into competitive advantages and incremental revenue streams. By investing in solutions that integrate key platform components and data, online retailers are able to offer self-service return capabilities to consumers. A typical reverse logistics solution allows the consumer to more easily initiate the return by incorporating a pre-paid postage label within the box. This label can be integrated within the packing slip or it can be a separate stand-alone piece. Because the label generation is initiated by the warehouse management system, the label is able to capture key customer information for tracking purposes, both for CSR’s and the end consumer. The label provides one primary source of value to the customer - convenience. No post office trip is needed and retailers improve overall customer satisfaction while facilitating the product return to the distribution center. When consumers initiate returns through this process, retailers typically charge them a “handling fee”. This fee is typically 20% higher than the postage charge that was provided by the reverse logistics service provider. This dollar spread, between what is charged to the customer and what has been billed to the retailer for postage, generates direct and measurable profits for retailers. Improving communication with online consumers A reverse logistics solution can drastically improve customer communication during the return process. Newgistics is a great example of a reverse logistics provider that has customer-centric communication processes embedded in their overall solution. After a return package is picked up from a consumer location, it is sent to a Newgistics hub for sorting and re-locating. During this process, there are strategic scanning mechanisms used to facilitate triggered and branded communication emails. A consumer receives “retailer branded” email notifications when certain milestones are achieved in the return process, such as:
Quick receipt of these emails enhances the confidence level of customers, reduces inbound customer service calls, and provides another value-added feature to boost the eCommerce relationship. Your company is taking a great risk if it does not provide a great post-purchase site experience. Feel free to contact Trinity to learn more about this type of initiative and how we can help in discovery, scope , and implementation efforts.
ABOUT THE AUTHOR
Craig Smith is the Founder of Trinity Insight LLC. Trinity helps online retailers meet their potential through eCommerce consulting that includes startegic research, testing, and analysis. Craig Smith MBA | Founder & Managing Director | Trinity Insight LLC More Articles Ecommerce: What Do Consumers Need? - Scott Lindsay
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