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How Will the Retail Industry Handle the Incoming Wave of Returns?

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By Shash Anand, VP of Product Strategy at SOTI

The increased adoption of e-commerce by consumers was already well underway before the pandemic accelerated its impact on the retail industry. According to stats from Shopify, there has been a 32% increase in e-commerce sales in North America since the beginning of 2020, and these numbers appear to be rising every day.

But could this surge in online sales actually have a negative impact on retailers and their in-store experience as pandemic restrictions begin to ease?

If history holds true, online purchases tend to have a much higher rate of return – as online purchases have a return rate of 20%-30% versus just 8%-10% for in-store purchases. As customers return to physical store locations, it’s anticipated that they will be coming with their returns in hand.

Are retailers ready to handle this massive influx of returns? Can they support their strained operations with the right policies, backend technologies, and processes? If they can’t, will they risk damaging the customer experience, and by extension, customer loyalty, at this critical moment in time when they open their doors after a punishing series of lockdowns?

Increased returns will come with increased customer expectations

It is important to understand that this is not just a matter of handling increased levels of returns, but meeting expectations consumers have of the returns process and the experience as a whole.

SOTI’s State of Mobility in Retail 2021 Report, found that 63% of consumers are not satisfied with the returns processes by retailers and would like them to be made easier or even automated, while 57% stated they were not satisfied with the returns process for products bought online.

As retailers prepare for the coming waves of returns, they must keep these increased expectations in mind. Failing to do so may seriously damage customer loyalty.

Handling returns with alternative processes

Not all of these alternative methods will work for every organization of course, but if you take a close look at your operations and employ a little trial and error, you should be able to find a method that helps ease the burden on your staff and meet the heightened customer expectations. Some examples of alternative return methods being tested or considered include:

  • Scheduled curbside returns: As opposed to having every customer come into your physical location – which only adds to the congestion and further ties up your staff – many are considering the idea of allowing customers to schedule a curbside return. This not only frees up space in your store but also allows you to assign a single employee to handle returns, working off scheduled blocks of time and streamlining operations.
  • Scheduled returns pickup vehicle: Assigning a returns pickup vehicle to follow scheduled routes to collect customer’s returns from their own homes/curbsides allows customers to schedule a return pickup that works for them and their comfort levels.
  • Trackable, on-demand returns pickup vehicle: While similar to the method above, the major difference is having a trackable returns pickup vehicle so that customers can see when a vehicle is in their area and request a pickup. Such a method is exactly why developing an integrated mobile strategy – along with the technology that allows for a trackable vehicle – is so essential to operating a modern retail outlet that can incorporate the latest innovations in mobile technology.
  • No returns: This could come as a shock to some, but one of the more popular alternative returns method being considered is the concept of no returns at all. Some see the time and money spent to process a return as simply not worth it. Letting customers simply keep unwanted items is in fact more cost effective than processing a return.

Streamlining your returns process with technology

As it stands, a lack of adequate technology is a major issue in the industry. A staggering 98% of T&L professionals surveyed in SOTI’s State of Mobility in T&L 2021 Report said that inadequate technology was the cause of shipping delays in a normal week. Recognizing the issue, 99% of those surveyed stated that they already had plans in place to invest in the technology to improve the speed and efficiency of their operations. Some of the technologies available to retailers and T&L companies include:

  • Trackable RFID tags:The ability to track your products serves many purposes but is particularly useful for many of the alternative returns methods mentioned earlier, like curb-side drop-off. This will allow you pull a staff member onto returns duty when the item arrives, rather than waiting around for any potential delays or leaving the item unattended on the curb.
  • Real-time geolocation:The ability to locate any of your off-site employees or vehicles at any given time is the only way you will be able to utilize some of the alternative returns methods mentioned, such as allowing customers to track your returns pickup vehicle.
  • An integrated mobile strategy:Being able to manage your entire network of mobile devices boils down to two main factors: visibility and integration. Without both of these factors being managed and succeeding, you will cause far more problems than you can solve with the use of the many innovative technologies available on the market today.
Shash Anand

For the retailers looking ahead and preparing for the incoming waves of returns, this is a true opportunity to streamline and improve their operations now and over the long-term through a combination of policy changes and the implementation of technology. While a failure to do so could damage customer loyalty, success in this area will provide invaluable gains to retailers looking to drive innovation in the industry, and set them up to succeed far into the future.

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