E-commerce returns was a topic on everyone’s minds during the pandemic-impacted holiday season, but even as retailers continued to brainstorm how they can better approach the growing issue amid increasing costs, on the whole they haven’t been able to succeed in changing the shopper’s opinion on the quality of the process.
According to a recent consumer survey from fulfillment technology provider Doddle, 75 percent of shoppers feel retailers should be doing more to improve their returns experiences. While that statistic may be tough to swallow on its own, in context it is even worse—this number is higher than the 74 percent who said returns needed to be improved last May, at the height of worldwide store closures when retailers were rushing to launch or upgrade their returns capabilities.
The returns hype can’t be ignored, with consumers sending back an estimated $428 billion in merchandise to retailers last year, approximately 10.6 percent of total U.S. retail sales in 2020, according to the National Retail Federation (NRF). And Doddle estimates that 25 percent of shoppers returned something they purchased or were gifted in the holiday season. The median number of items returned was three, with one being the most common response.
The current survey of 1,200 U.S. consumers revealed that a positive returns experience would encourage respondents to shop with the same online retailer again (86 percent vs. 84 percent tallied in May 2020).
Returns are as important as payment and delivery in the e-commerce shopping process, with 85 percent of shoppers citing returns as important, right in line with 86 percent for the other two factors.
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And when it comes to the various creative options now being offered by retailers with the help of technology providers, 31 percent of shoppers say they want label-free returns. This is more than the 28 percent that prefer extra-long policies that allow them to return more than a month after purchase. Third-party service providers such as Happy Returns, Optoro, Newmine, Returnly and Narvar are among the services enabling retailers to accept label-free returns, while Amazon expanded label-free returns to 500 Whole Foods Market stores.
Naturally, Amazon and Walmart are deciding to simply refund shoppers for their online purchase in certain cases without putting them through the process of returning a product, but that isn’t always easy with retailers that don’t take in enough revenue to absorb the sunk cost.
“The findings demonstrate that with consumers’ ongoing desire to shop online, e-commerce returns present a great opportunity for increased sales and reinforcing customer loyalty, but retailers aren’t moving the needle when it comes to the returns experience and thus missing the boat,” said Dan Nevin, chief revenue officer, global retail for Doddle. “Our research also shows that consumers’ perception of the returns experience often comes down to three Cs—cost, communication and convenience.”
With regard to returns convenience, another recent survey from Manhattan Associates indicates one of the potential barriers that remain within the returns experience. Manhattan Associates, which surveyed 2,500 in-store shoppers specifically in high-touch retail settings including fashion, luxury and specialty, found that returning an item ranked as the No. 2 motivator for future store visits by customers, second only to the need for same-day products.
Yet despite this, 60 percent of surveyed retailers do not allow shoppers to return or exchange an item during checkout, adding an unnecessary obstacle to flipping the return interaction from a loss to a profit.
The Doddle survey pointed out that 50 percent of shoppers want a convenient location to return an item, whether it’s a local store or a post office. As many as 65 percent said they were likely or very likely to return online purchases at their local grocery store if that option was available, giving Amazon another edge via its Whole Foods returns option.
Convenient locations for returns are especially important to older shoppers—58 percent of those over age 55 want them compared with 41 percent of those ages 18-24.
From a cost perspective, Doddle indicated that 66 percent of shoppers say that they desire free returns, topping the list of options consumers said they want e-commerce retailers to offer when returning an item.
Only 35 percent of shoppers usually return items for free, but 10 percent say they usually pay over $4 to return. Not only do shoppers want free returns, but they also find being charged a restocking fee extremely off-putting, with 57 percent saying they would reconsider shopping with a retailer in the future if an amount was taken off their refund for sending an item back.
The survey findings also show that 53 percent of consumers expect good communications and visibility during the return process, such as tracking a package, confirmation of receipt, refund information, etc.
There’s still plenty of work to be done in that respect. An analysis from ParcelLab that evaluated trial orders from 52 e-commerce retailers from July to October 2020 found that 56 percent of retailers don’t communicate a successful delivery to shoppers through any notification, whether email or text. Only 27 percent of retailers hosted a shipment tracking page on their website. Twenty-three percent opt for the carrier to convey delivery information, while another 42 percent rely on other third-party vendors.
As part of a positive digital communications process, the Doddle survey indicated that shoppers shouldn’t have to contact a customer service agent, as 33 percent say that having to do that is annoying enough to make them reconsider shopping again with that merchant.