Returns – an Opportunity to Increase Sales

This post first featured in the Modern Retail Guide to Fulfilment November 2019. To read the full ebook click here, or scroll to the end of the page to view on page-turning software.

Research from UPS Pulse of the Online Shopper has provided significant insight into the impact of the consumer’s return experience on sales.

67% of consumers check the returns policy before checking out, and 85% of shoppers say they won’t repeat buy if returns are complicated or inconvenient. It is very clear: A poor returns experience for the consumer equals lower sales.

This is nowhere more true than in cross-border trading where reverse logistics has been identified as one of the main barriers to cross-border expansion for many companies.

The conclusion, for any company, however, is very straightforward. If you want to increase your sales; make your returns policy consumer-friendly.

We firmly believe that dealt with correctly, returns can, in fact, be the key to your ecommerce success in cross-border trading.

So, ‘to deal with it correctly’ we firstly need to identify what the potential problems are. We have identified three issues that buyers face when returning an item.

1. It is more complicated for your buyer. Most customers are unfamiliar with posting items to other countries.  This makes the whole process more difficult and inconvenient for them. This will lead to abandoned baskets and/or less likelihood of customers buying again.
2. It is more expensive for you or the buyer. Consumers may select the most expensive method of posting things back to you from overseas.  If you offer free returns, this has a significant impact on your profitability. If you do not offer free returns, it is a massive deterrent for consumers to buy again.
3. It takes longer to refund your buyer. Consumers want to be reimbursed or have their items exchanged as soon as possible. When items are bought from overseas, there is a longer time lag between the customer sending the item back and receiving a refund or an exchange.

You do not need to be a rocket scientist or even a savvy businessman to understand these 3 factors will have a significant negative impact on your sales. 

However, conversely, you do not need to be a rocket scientist or even a savvy businessman to understand if these 3 factors are addressed, it will have a significant positive impact on your sales. 

Plus, if you are one of the forerunners in addressing this problem, then the effect is exponential as your store will stand out from the others, giving you the competitive edge. 

Returns are not a problem…They are a distinct opportunity, especially in cross-border trading.   

We cannot, of course, talk about ecommerce sales without mentioning the big elephant in the room, the giant that many companies’ sales, business goals, bottom line profitability and ultimate survival may depend on Amazon.

Amazon has, in recent years targeted and encouraged businesses to dive headlong into cross-border selling. They have also looked at and acted upon the feedback from the end consumer. 

Amazon’s international returns policy dictates that sellers must either provide a local returns address in the country where the item was purchased, provide a free return postage label or let the customer keep the goods.

Thankfully, snapping at the heels of the cross-border expansion of ecommerce sellers are companies who have evolved to provide a service that allows these policies to be adhered to. Good news indeed for the ecommerce sellers involved in cross-border trading.

So, who are these new companies?

Most are logistics companies who have opened their minds and businesses to the reverse logistics problems.  They predominantly use their expertise in offering label solutions to all. The problem of issuing a speedy refund is, still, however, an issue.

The most comprehensive option is companies who themselves have a background in ecommerce and consequently know EXACTLY what the issues and pressures are.  They effectively remove every aspect of the ‘problems’ in one fell sweep.

1. They provide a local returns address in the countries that you are selling. Returning the item is simple for the end buyer – BIG TICK
2. They consolidate your returns, sending them back to you on a monthly or box full basis therefore significantly reducing yours and your buyers’ shipping costs – BIG TICK
3. They receive the items and register the item on your own online dedicated portal. You can refund or provide an exchange for your customer’s quicker – BIG TICK

The feedback from retailers using these services is that the overall costs go down and the sales go up. It is simply a no brainer.

Retail’s fixation on moving a product from the shopper’s basket to their front door has led to brands so focused on competing for conversions, that a major part of the customer journey is neglected – returns.

However, getting your returns right and increasing your sales are intrinsically linked, there is absolutely no doubt.

According to a study by Internet Retailing, more than a third of retailers say they are held back from improving returns by having other priorities. What other priority can there be if not to improve sales?

So do not bury your head in the sand regarding your returns.  Use the services that are now at your disposal. Relax, sit back and watch your returns problems disappear and your cross-border sales rocket.

Read the full Modern Retail Guide to Fulfilment November 2019 below.