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Woman holding up blue plaid pajamas Christmas present and making a disappointed face with the text 'returns: tis the season'

Holiday Returns: What Merchants Should Expect

Posted on December 17th, 2020 by Marcia Jedd

No business wants to deal with an influx of returns. But by managing them with care and efficiency, you’re marking yourself out as a retailer who is professional, organized, and most importantly, customer-focused – the key to long-term success. This is true at any time of the year – but especially in the period immediately following the holiday season. 

The New Year always results in a massive spike in demand for reverse logistics. If a gift isn’t right, consumers are understandably eager to swap it for something else as soon as possible. With this in mind, it’s not surprising that eCommerce return rates at this time of year can be as high as 30%. If eCommerce merchants are going to retain a loyal customer base, it’s essential that they facilitate a fair and seamless returns process.

Retailers are set to see a huge surge in returns as the holiday season draws to a close. This annual event in early January is known as ‘National Returns Day’ according to which date the surge reaches its peak. According to Statista, it occurred in 2020 on January 2nd – and at a rate of 1.9 million packages.

return rates for brick-and-mortar, ecommerce, holiday ecommerce, and 'expensive' products

The key difference for 2021 is that with so many more consumers being driven to shop online due to COVID-19, the volume of returns is likely to be far higher than normal. This is will be further exacerbated by major changes in consumer spending habits. Prior to 2020, consumer spending was moving in the direction of ‘experiences’ over products. In the final quarter of 2019, US consumers spent over $400 billion dollars on air travel, food service, accommodation, and cultural services. 

But with such activities increasingly out of reach due to the pandemic, consumers have been pivoting back to product-based offerings which can be enjoyed from home. More products mean more parcels – and more items at the possibility of being returned. Against this challenging backdrop, merchants need to be more organized than ever to ensure they are ready to meet consumer expectations. 

So, what can you do to ensure that your reverse logistics go as smoothly as possible?

1. Put the Customer Experience First

It’s been an unprecedented year for the retail sector. But despite massive disruptions in 2020, the fundamentals of offering a positive customer experience remain unchanged. 

In light of pandemic-induced uncertainties, some touchpoints have become even more important to customers – and it’s vital that retailers cater to these expectations if they want to secure their loyalty into the New Year and beyond:

Convenience. Seamless experiences have always mattered in eCommerce, but have taken on a new urgency when consumers are experiencing a new-found reliance on this channel. Steps like making your returns policy easily accessible online and allowing for printer-less returns via QR codes will make an enormous difference in this area. 

Good communication. The pandemic has only added to existing anxieties about the progress of returns shipping and refunds, and consumers are eager for regular updates. If you’re proactive in letting customers know about the status of their order via email or text, this gives them reassurance – and takes a lot of pressure off your customer support team.

Multiple returns methods. Consumers are showing an increasing preference for a variety of return options to suit their circumstances. While returning via mail and in-store remain popular, the pandemic has seen alternative drop-off locations, such as pharmacies and grocery stores, grow in popularity. In our omnichannel environment, it’s important to avoid siloing consumers into processes that may be unsuitable for their needs.

2. Finding Ways to Limit Returns

It isn’t possible to ‘stop’ returns behavior in eCommerce – nor is it smart to try. Such attitudes can lead to questionable tactics, like returns processes that are made intentionally difficult to navigate, and this is only going to backfire on your business. However, you can introduce innovations to your shopping experience that make it easier for your customers to get their purchasing decisions right – or to work with you to correct issues.

Straightforward exchange processes. If size, color, or model type is the primary issue, retailers can easily retain a sale (and a customer’s loyalty) by facilitating a smooth exchange process. This strategy avoids them having to return an order and made an entirely new transaction – and is a much more effective use of your fulfillment resources at a time when you’re going to be particularly stretched. 

Augmented reality. AR experiences are a rapidly growing trend within eCommerce, projected to be worth $60 billion by the end of this year. AR allows consumers to view products within the context of their own home (such as home decor and furniture) or projected onto themselves through the use of filters (apparel and makeup).

Man virtually trying on a suit using augmented reality software on a tablet

Major brands such as Warby Parker, Sony Electronics, and Sephora have embraced AR because they allow consumers to ‘try’ products before purchasing – thereby minimizing the chance of returns.

With 61% of consumers now preferring merchants that offer AR experiences, this is definitely a tool to consider adding to your arsenal.

3. Have an Efficient Returns Management System

Reverse logistics can be a very complex process – especially when you factor in the desire of many consumers to exchange items with ease as part of the same transaction. 

With unprecedented parcel volumes at play this year, it will be immensely challenging to conduct efficient returns management without a robust system to back you up and provide support.

returnly logo

Whiplash’s integration with Returnly provides a frictionless solution that not only manages returns – but allows merchants to pre-empt them. By embedding custom return links within the initial order confirmations, customers no longer have to contact merchants directly to kickstart the process, resulting in a far more streamlined returns workflow.

With its direct connection to Whiplash’s powerful eCommerce fulfillment and returns capabilities, PLG is expertly placed to provide merchants with the resources they need to facilitate fast and effective returns management following the holiday season. Contact us today for support.

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