In the fast-paced world of eCommerce, returns have evolved from being a simple afterthought to a key driver of customer satisfaction. Today’s consumers expect a seamless shopping experience, and this includes a no hassle, preferably free, returns process. In fact, 96% of customers claim they are more likely to shop again with a retailer if the return process is easy, and 62% are drawn to businesses that offer this for free. This places tremendous pressure on online retailers to ensure that their policies are not just generous but also efficient and customer-centric.
However, while accommodating these expectations, retailers are simultaneously battling the rising costs associated with returns. Global eCommerce returns amounted to a staggering $816 billion in lost sales in 2022, with returns making up as much as 30% of all online purchases in certain categories. Fashion retailers face the steepest challenge, where up to 50% of orders are returned due to fit and style issues. Managing this reverse flow of products, often referred to as “reverse logistics,” is now an essential component of retail strategy. It’s no longer just about getting products to customers; it’s about managing the complex web of returns in a way that is both cost-effective and sustainable.
As reverse logistics becomes an integral part of the retail landscape, many companies are rethinking how they handle returns. The traditional approach of free, no-questions-asked returns is being re-evaluated, as it is unsustainable both financially and environmentally. A growing number of businesses are turning to data analytics and AI-driven solutions in order to reduce the impact. Advanced systems can now predict return behaviours, optimise inventory, and even prevent returns by offering more accurate product recommendations in the first place. Retailers who have embraced these technologies have seen rates drop by as much as 25%, demonstrating the impact that smarter processes can have.
Sustainability is also shaping the future of returns. Consumers are becoming increasingly aware of the environmental footprint associated with shipping, and the reverse journey of goods is no exception. A 2023 survey found that 72% of customers are open to eco-friendly options, such as returning goods to physical stores or combining them into a single shipment. Some retailers have even introduced returnless refunds, allowing customers to keep products while still receiving a refund, a strategy that significantly cuts down on the carbon emissions tied to shipping.
Data is playing a crucial role in this transformation. By analysing returns data, retailers can gain insights into why they happen in the first place—whether it’s due to sizing issues, product descriptions, or unmet customer expectations. Armed with this information, businesses can take proactive steps to address the root causes, resulting in higher customer satisfaction and improved profit margins. A 2023 study showed that nearly half of retailers using data analytics to track returns have seen a notable boost in their bottom line.
Looking ahead, retailers must continue to adapt to the ever-changing demands of consumers while navigating the complexities of global logistics. One solution that is reshaping the landscape of cross-border eCommerce returns is the new joint venture between UKP Worldwide and MS Direct, Unwind – Bridging borders, simplifying returns.
With a focus on simplifying returns, customs clearance, and duty reclaim, Unwind is designed to ease the challenges that many businesses face when selling into the UK and EU. By consolidating returns near parcel hubs and streamlining the process at the point of customs clearance, this innovative approach reduces unnecessary transport, improving both efficiency, sustainability, inventory and more importantly cash flow, whilst enhancing the customer experience.
For retailers struggling with the logistical and regulatory complexities of cross-border returns, solutions like Unwind offer a way to enhance customer experience while maintaining operational efficiency. As the eCommerce market continues to grow, the ability to provide seamless, simplified returns will not only boost customer loyalty but will also help businesses stay competitive in an increasingly demanding environment.
Sources:
1. The Growing Importance of Easy Returns, Shopify, 2023.
2. The 2023 State of Returns: A $816 Billion Problem, NRF, 2023.
3. Reverse Logistics and Its Impact on Retailers, GlobalData, 2022.
4. Consumer Attitudes Toward Sustainable Returns, Accenture, 2023.
5. How AI Is Reducing Return Rates in eCommerce, Deloitte, 2023.
6. Data Analytics: The Key to Better Returns Management, McKinsey & Company, 2023.