Returns are a neglected part of the online customer experience. This is costing customers time they can't afford to waste; it's costing businesses money they can't afford to lose, and it's making everyone increasingly frustrated. As the cost begins to mount for all parties involved, including the environment, it’s time to reimagine the returns process. In this article, we bring together Wunderman Thompson Commerce’s experience of working with 50 of the world’s biggest retailers and a robust piece of research to outline how businesses can tackle the beast of returns and win a share of customers’ wallets.
No one enjoys returns. Customers dislike them because the process is convoluted, costly and time-consuming, and the refund takes too long to reach their bank accounts. Our global 2022 Future Shopper research found that 23% of everything that is ordered online is returned. It also found that 2 in 5 consumers (39%) over-purchase with the intention of returning some items. Both are significant statistics, and whether customers shop with either no or clear intent to return an item, the returns process can be a major friction point
These figures also mean that returns and refunds are a considerable pain for businesses too. Returns are estimated to cost £60 billion a year for UK retailers. Retailers must account for shipping fees (as many returns are free), time and costs associated with checking that items are in re-sellable condition - from hiring staff to check the condition of returned items, to putting the items back in stock online and sending them back out to customers again.
Returns cost the environment too: US returns alone create £5 billion of landfill waste and 15 million tonnes of carbon emissions annually. Such environmental impacts can have detrimental effects on retailers’ reputations too.
In recent years, retailers have had to adapt to a new era of online shopping. But their returns processes have often failed to keep up. January is expected to be peak returns season following key milestones for retailers in December: Black Friday, Christmas and Boxing Day. The January sales will add fuel to the fire.
A poor returns experience can have dire consequences for retailers for the rest of the year. Customers are used to no-quibbles returns from retailers like Amazon and ASOS, so when other retailers fail to follow suit, customers have nothing holding them back from taking their business elsewhere.
So, what can retailers do about this?