Pretty soon, a flawless product return experience will be every bit as important as smooth delivery. That’s our firm conviction. We’ve compiled a few figures below which illustrate this trend in action.

Our advice for staying ahead in this fast-moving game: it’s much better to be among the pioneers leading the way than to be seen as a late-comer playing catch-up.

So what we need here is an effective returns system which doesn’t cost too much; and which satisfies – or even impresses – your customers!

That’s quite a challenge (in terms of cost, organisation, IS etc.), but in this guide we’ve put together all of the steps you’ll need to follow from the project launch through to its operational management, with all of the key questions you’ll have to address along the way.

How to use this guide:

  1. Use the table of contents to skip straight to the bits you need.
  2. Download and use the bonus sections (you can print them out if you need to) in your preparatory workshops, sharing them with the key internal and external players.
  3. Don’t hesitate to post your comments, questions and feedback at the bottom of the page, or drop us an email at contact(at)shoprunback.com

 

TABLE OF CONTENTS

1.WHY RETURN LOGISTICS DESERVE MORE ATTENTION ?

(Weak) signals | Your current (hidden) costs | Cross-border e-commerce…


2.EFFECTIVE PREPARATION FOR BETTER REVERSE LOGISTICS

People to get involved | Questions to ask | Does your IS need an overhaul ?

📖BONUS: a check list of essential questions to ask before you get started 


3. EFFICIENT COORDINATION DURING THE IMPLEMENTATION PHASE

How long will integration take ? | Do we need to run a test ? | The responsibilities of each department…

Warning: what about international returns ? Goals: reducing costs which are usually very high, making the handling processing easier.

📖BONUS:expert insight ] perfect packaging for smooth returns.


4.HOW CAN YOU MEASURE THE SUCCESS OF YOUR PROJECT ?

List the benefits for each department | Keep an eye on serial returners


5.MANAGING THE DAY-TO-DAY

KPIs to define and monitor | Continuous improvement

📖BONUS: returns of heavy/bulky products. When an average of 80% of products are returned in a damaged state, you need to implement a specific logistical process. Advice and methodology.


The numbers say it all… and it’s not easy listening !

In the USA, the consumer is king. And that king sends back somewhere between 30 and 70% of all products ordered, depending on the category of those products [Source: Optoro 2018]. In Europe, the return rate is around 10% across classic retail and online sales. The rate is obviously higher when we look just at online sales, with the highest percentages in the clothing and shoe sectors: 30% in France, 50% in Germany [BFM Business, April 2018].

83% of consumers say that they’d buy more if the returns process was easier [Reverse Logistics Association];

46% of online shoppers have already abandoned a basket because there was no free return on offer [Optoro, Dec.2017] and

15% have abandoned because the returns policy was unclear [UPS]


1. INTRODUCTION : WHY RETURN LOGISTICS DESERVE MORE ATTENTION ?

(Weak) signals | Your current (hidden) costs | Cross-border e-commerce…

While there is no one specific factor which systematically drives his clients to improve their reverse logistics, Florian Laudillay – Head of Sales and co-founder of ShopRunBack – has observed some common symptoms :

Volume of demand before and after sales

The impetus often comes from the customer relations department, or the person in charge of handling the customer experience. It is often a result of the increasing number of questions from customers enquiring about returns. “How do I return this product ? How is my return request going ? When will I get my money back ?” – These are the most frequently-asked questions from customers.

But, increasingly, it’s also about meeting customer expectations regarding the level of service that comes with online sales (nowadays delivery is almost always “free”). This generosity is increasingly being extended to returns, making for a more even balance between the purchasing and post-purchase experiences.

Lack of visibility regarding order returns in the customer relations department

Once again, the customer relations team only have a partial view of the returns process. They need to get in touch with the logistics department, where returns are often treated as a secondary priority, and the tools required for more than a basic weekly report simply don’t exist.

This inter-departmental hurdle can be a real problem for the returns process. One department has other priorities, and the other lacks full visibility. In the end it’s the customer that pays the price… and is left with a bad impression of the website.

Poorly-aligned logistical organisation

The organisational structure is often poorly-aligned with the priorities of end users. When logistical operations are outsourced, the priorities are preparation time and time to delivery.

“Internal logistics teams are often too busy to really get to grips with the subject of order returns, because the priorities of the general management lie elsewhere” Florian Laudillay observes.

International

70% of European web users ordered at least one product from another country last year (the rate is 65% in France), and the majority of online stores are faced with the challenge of complex international returns which can prove to be particularly costly [don’t forget to read our special focus on Cross-border e-commerce: optimising reverse logistics].

In these circumstances, the biggest advantages of a robust returns policy are:

  • Greater customer satisfaction and a subsequent upturn in sales
  • Smoother internal processes for handling order returns

But, as we shall see, a robust returns policy also offers significant financial benefits for clients.

 


2. EFFECTIVE PREPARATION FOR BETTER REVERSE LOGISTICS

People to get involved | Questions to ask | Does your IS need an overhaul?

Who needs to be involved in the reverse logistics project?

“There are no hard-and-fast rules, it all depends on the structure of the company. But, generally speaking, we work with 4 main partners during the preparation phase: the logistics department, the customer service department, the marketing department and the online sales department,” Florian Laudillay explains.

Proof that managing returns really does require some serious inter-departmental coordination!

What about your Information System (IS)?

Whatever technical solution you choose, it needs to allow your customers to easily declare and track their product returns. Ideally the solution should be integrated into the customer’s user account; another option is to have a dedicated external page allowing users to track returned packages in real time.

“The external page option is obviously quicker to set up, but it also allows you to rapidly incorporate new features without overhauling your whole online sales platform,” Florian Laudillay notes.

“At ShopRunBack we offer an API along with modules for certain frameworks, allowing us to rapidly integrate our solution with the User Account functions of online stores. If clients don’t have the internal resources required for full integration, we offer a personalised external page with a permanent link.”

Structuring reverse logistics: the key questions to ask yourself

Should customers have to pay for returns? What return options do you want to offer? What about reimbursement? … Questions that will need to be addressed collectively before you implement the new returns policy (in consultation with customer services, finance, logistics and marketing).

 


📖

Click the link below to download a list you can print and share in your inter-departmental preparatory workshops

DOWNLOAD OUR GUIDE TO STRUCTURE YOUR RETURN POLICY

 


Pre-paid return labels: are they a good idea?

ShopRunBack’s take on the issue: “We don’t recommend pre-paid return labels, we feel it’s better to force clients to go through a returns process. That means offering different return methods for different circumstances. It also helps to reduce “unregulated” returns, and allows vendors to build up valuable data on their returns activities.

 


3. EFFICIENT COORDINATION DURING THE IMPLEMENTATION PHASE

How long will integration take? | Do we need to run a test? | The responsibilities of each department…

Who does what?

The methodology put in place by ShopRunBack could provide a source of inspiration for your own reverse logistics.

  • ShopRunBack meet with clients to discuss their current returns policy, the changes they are looking to make and the stakes in play – these factors will be taken into account when structuring the returns system, especially when customers set the returns process in motion (specifying reason for return, covering the costs, selecting return method etc.).
  • Retailers need to determine all of these parameters in advance: from the valid reasons for returning goods to the address of the warehouse where packages should be sent.

Our solution is “plug & play“, allowing clients to choose their own settings then immediately start offering those services and solutions to their end users.

How long will the integration phase last?

The integration and start-up phase will vary depending on the retailer’s ambitions, capacities and priorities. You really need to switch into project mode and power through the process of setting up the logistical system in one go. In the meantime, you need to start aligning the return services which will be offered to customers, and implementing the new rules within the customer services department.

“We generally find that, as soon as the tools are available, the integration phase is complete within a week or two (including tests on our end). Our tools allow retailers to select their own settings in just a few minutes. Once the customer service department is on board with the tool, the logistics team have been informed and the marketing department is ready to spread the news to customers, you’re all set to get started.”

Idea: Why not start with POC ?

POC (Proof of Concept) is a form of test commonly used to check out new services. In this case, why not try offering different returns experiences based on the value of the original purchase, in order to test different methods?

ShopRunBack go further still “An online retailer can even offer returns without generating extra costs! Set up a returns policy which is easy to understand, totally transparent and – paid for by the customer! Customers will accept paying the return postage costs. You can thus build up a free database of information which will be invaluable when it comes to fine-tuning your returns policy later on.”

Why is two-way delivery packaging so important?

Bearing in mind that over 90% of consumers return unwanted products in their original packaging, you need to take real care over packing materials.

  • In order to improve the all-important customer experience, of course.
  • But also to optimise the cost of sending and returning packages!

 


📖

Click below to download our comprehensive guide to two-way packaging

DOWNLOAD OUR GUIDE ABOUT DEDICATED RETURN PACKAGING

 


Cross-border sales: what about the logistics of international returns?

The challenges and factors to take into consideration when organising returns beyond your own national borders.

According to a 2018 study by Nordpost, 70% of European internet users purchased at least one product from another country in 2017. FEVAD estimates that 65% of French shoppers succumbed to the temptations of international e-commerce in 2017.

But the average cost of international returns is €15 to €20 with leading international couriers such as UPS, DHL etc. How can you get round these exorbitant costs without losing your international customer ?

ShopRunBack tell us how:

Use a local network – We work with a network of partners at national level, rather than a single international courier who charges much more. That allows us to negotiate prices locally. Our role is then to coordinate these different partners on behalf of our online retail clients.

Optimise your logistical process
  1. We have all returned products delivered to national platforms.
  2. We then check the return order on site (quality control) before launching the process requested by the client (registration, referencing, quantity, labelling etc.)
  3. All of this information is immediately sent to the retailer, allowing them to inform both the customer services team and the logistical department about incoming returns.
  4. The orders are then consolidated (in what we call a masterbox) and sent back to the retailer’s logistical department, where they can handle the restock process.
Make your process adaptable – For small retailers, we group together orders from multiple companies into a single masterbox to cut the costs of getting products back into the country. The packages are then divided up and returned to the right place… for the price of a local delivery !

 

4. HOW CAN YOU MEASURE THE SUCCESS OF YOUR PROJECT ? 

List the benefits for each department | Keep an eye on serial returners… 

Measuring your progress is essential! If handled correctly, a good return experience can be a business opportunity – but it’s still a cost, first and foremost. You therefore need to assess the performance of your project, in order to maximise the return on the work of all involved.

How can you assess the overall benefits?

Here are a few directly beneficial consequences for your business:

  • Number of communications received by the customer relations department (up to 30% less just for returns)
  • More fluid logistical processing (reduced processing times, items returned to stock more rapidly)
  • Cost control thanks to centralised management paired with greater financial visibility.

And a few more subtle changes which should be reflected in medium-term sales figures:

  • Improving the customer experience boosts loyalty and increases the rate of returning customers
  • Savings made in terms of internal resources, if you call in expert help to manage returns.
Do you need to worry about “serial returners” ?

Is the customer always right? This year has seen a subtle shift in attitudes, with the banning of serial returners and fraudsters from Amazon [ the total cost of returned goods fraud in the USA was estimated at $9 billion last year | Forbes, Dec. 2017 ].

What’s a serial returner ? This American term refers to consumers who buy products to try them, or even use them, before returning them. They do not appear to have any intention of actually buying the products. This form of fraud is a real and constantly-growing phenomenon, according to the National Retail Federation. In the clothing sector, the practice is also known as wardrobing.

But the risk of fraud should not dissuade you from improving your returns system. Jonathan Trepo, Managing Director of Zalando France, is unequivocal: “Having a total return rate of over 50% is not a problem, far from it.  If handled correctly, returns can boost customer satisfaction rates. That also means that shoppers are willing to put more articles in their baskets.”

The view from ShopRunBack : This is a phenomenon which has existed for a long time in the retail sector, and is now an issue for online sales too. That’s why we’ve developed a set of smart rules which allow clients to differentiate their returns policies (VIP customers, special promotions on certain items, different rules for orders over/under a certain amount etc.).  The idea is not to offer a single solution for order returns, but instead to develop a service which corresponds to clients’ actual requirements.

Unfortunately, returns are too often perceived as unimportant by retailers, and an unpleasant experience by customers. The challenge is to understand this important process, and fine-tune it so that everybody wins.

 

5. MANAGING THE DAY-TO-DAY

KPIs to define and monitor | Continuous improvement

 Criteria to monitor
  • The most important consideration is customer satisfaction ! Monitor your customer feedback to see if your returns policy is cited less often as a reason for dissatisfaction.
  • You should also keep an eye on the percentage of customers returning products who go on to buy something else.
  • In the medium term, annual spend per customer should increase.

Logistics

The main benefit here should be a reduction in the time it takes to process packages, and get returned goods back on sale. It is important to keep an eye on this indicator, as it will have a decisive impact on the ROI of your returns policy.

Continuous improvement

Clarifying your logistical operations should also give you a clearer vision in other areas:

  • What are the reasons customers most frequently give for returning products? What can you learn from this?
  • Are certain products more likely to be returned than others?
  • Is the return rate higher in specific regions or countries?
  • Is there a potential packaging and/or transportation issue leading to a higher percentage of breakages for particular products or in specific countries?

All of this information can help you to detect product quality issues, details which need to be clarified in the product descriptions on your website, or special messages needed for certain countries.

“Via the ShopRunBack interface, our users can access a wealth of data to help them continuously improve their return logistics.”

How can you improve your return packaging policy for bulky items?

80% of heavy/bulky products returned to retailers are damaged by the time they arrive!

So how can you establish a returns policy which looks after your margins ?

  • Choose the right transporters.
  • A list of criteria and important questions to ask.
  • An efficient return and repackaging method.

 


📖

Click below to download our guide to manager your heavy items

DOWNLOAD OUR GUIDE TO MANAGE YOUR BULKY ITEMS

 


We hope this guide will be helpful to you.
Don’t hesitate to share it, and get in touch with your advice and feedback !

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