Over the coming months, several UPS contributors will use this column to give practical advice to show how shippers can maximize the benefits of their relationship with carriers. Our first contributor is Jordan Colletta, UPS VP of Customer Technology Marketing, with tips to turn your online returns policy into a competitive advantage.
Now that the hustle and bustle of the holiday season is behind us, the focus for consumers, retailers and shippers shifts to returns. Relatively few retailers look to their reverse logistics/returns process as a means to grow sales or increase customer loyalty. Those who don’t, however, may be missing a golden opportunity.
UPS recently commissioned Forrester Consulting to explore online returns, and the findings may surprise you. In a nutshell: returns policies are a bigger factor in consumers’ online buying decisions than most realize. Businesses that make returning products easier and less expensive derive an advantage over competitors — and are likely to, in the long term, see increases in sales, customer loyalty and incremental revenue.
These tips, based on Forrester’s study, can help turn an online returns policy into a competitive weapon.
Top Four Returns Tips for E-tailers:
1. A liberal returns policy can enhance your bottom line. Don’t view a generous returns policy as a “margin-drain.” Forrester found that a liberal returns policy can actually enhance the bottom line in the long-term. Remember, customers most likely to return items also tend to be the most active online consumers, so your returns policy potentially affects your best customers.
2. Understand that key reasons for returns are often outside your customers’ control. Forrester found that retailers, not customers, are frequently responsible for returns. To reduce unnecessary returns, ensure the customer receives the item ordered and the item is accurately represented on your website.
3. Forrester concluded one of the most important things you can do is to match your returns policy to your business.
For example, if you’re selling women’s apparel or accessories, there’s a relatively low cost for accepting returns, but a relatively high chance of customers receiving an item not matching expectations. Ensure that products are being accurately depicted online — with website features such as customer reviews, alternate views and detailed and accurate sizing information. For customers who still elect to return an item, Forrester recommends prepaid return labels or subsidized returns.
If, on the other hand, you sell larger electronics like televisions or computer hardware, there’s a higher cost to accept returns but a lower risk of customers receiving something unexpected. Returns are much more likely to result from an item being damaged en route or shipped in error. Consider warranty programs at checkout to provide customers peace-of-mind, and insure shipments to protect your business if goods are damaged. If you have bricks-and-mortar locations, offering in-store pickup/delivery programs can provide added confidence. And if you have a sophisticated customer database, consider offering more generous returns policies for your best customers.
- Whatever your program, communicate it to your customers — both in the “help” section of your website, and on product detail pages. This is particularly important if you sell expensive or hard-to-ship items, or items that are challenging to render accurately online.
Best of luck, and here’s wishing you many happy returns!
Jordan Colletta, Vice President of e-Commerce Marketing, is responsible for the marketing activities of UPS’ e-Commerce solutions and ups.com. Jordan is refining UPS’s e-Commerce strategy, as well as delivering new solutions through the development of Internet-based technologies, applications and wireless access.
Source: UPS Online Retail Return Study, Forrester Customer Research, 2008