Clarkston Consulting
Skip to content

3 Ways Retailers Can Better Manage Returns

As we move into 2017, retailers have one more holiday to get through before the season is officially over – National Returns Day. Retailers might not acknowledge it as a holiday, but UPS has predicted they will handle 1.3 million returns1 on January 5th. Returns result in a massive hit to the bottom line, but also result in a missed opportunity for retailers to engage with customers in-store.  As in-store and online buying channels continue to merge, we share three strategies retailers can consider to minimize the impacts they will feel on this daunting ‘holiday’ and with the returns process in general.

1. Prevent Returns

This one seems obvious, but the easiest way to minimize the impact of returns is to prevent them from happening. One of the top reasons returns occur is because a product doesn’t look the same in person as it does online2. Tag onto that size/fit discrepancies, and you have two issues that are minimized if not avoided. Structuring online product pages becomes a critical success factor in preventing returns. Consider using strategies such as providing multiple pictures of the product, displaying video of the product being used, and providing easy to read size charts/dimensions so that the shopper knows exactly what they are buying. eCommerce buying should leave nothing to chance – by arming the consumer with relevant information, the odds of a purchase sticking are higher and customer satisfaction will go up as well.

2. Optimize Returns

Retailers will continue to address customer’s needs when it comes to returns, and rightfully so. Free shipping on returns and the option to return at brick-and-mortar stores are table stakes for most retailers. The pain is felt on the back-end with higher shipping costs for retailers as well as inactive inventory. However, what if retailers could optimize how customers perform returns based on where retailers wanted product to go? In the omni-channel world, retailers look at stores as distribution centers to ship product to customers. They should also consider how to control returns of products to stores for the same reason. “Smart returns” will give retailers the option to get product back on the shelf as fast as possible, and in the case of unsaleable product, will allow for consolidated shipments to primary returns facilities for lower returns costs. Retailers might struggle to implement this policy as it requires a level of agreement from the customer, as they will generally have a preferred method of return. So why not encourage and incentivize customers? Creating holistic loyalty rewards programs that allow customers to earn points for taking the product to a specific store could encourage preferred behaviors, resulting in a win/win for both the retailer and customer.

3. Learn from Returns

For years now, retailers have put an increased focus on consumer data, but returns data remains inconsistent and ambiguous. In an effort to make the returns process seamless for the customer, retailers often provide a return label in the box. While this is great from a customer experience point of view, those return labels often do not collect the reason for the return to give the retailer insights into the return. Was it a sizing issue? Was the product damaged in transit? Does the product look different in-person versus online? By implementing an approach that allows for information to be gathered from their customers, retailers can learn and adapt more quickly.

Returns will never be fully eliminated, but if retailers do their part to limit them up front, optimize the ones that do happen, and learn from their customer’s to improve their products and processes, they can truly cast aside “National Returns Day” as just another day.

[1] On ‘National Returns Day,’ UPS expects record 1.3M returns
[2] eCommerce Product Return Statistics and Trends
‘National Returns Day’ Is A Lesson For All Businesses

Subscribe to Clarkston's Insights

  • I'm interested in...
  • Clarkston Consulting requests your information to share our research and content with you.

    You may unsubscribe from these communications at any time.

  • This field is for validation purposes and should be left unchanged.
Tags: Process Design & Development, Product Lifecycle Management, Sales and Marketing Technology, Specialty Retail, Supply Chain Planning & Execution