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July 25 2006 11:52 AM

Customer service has become an increasingly competitive advantage in today�s direct retail environment. Proactive merchandisers realize that an improved customer return experience drives differentiation and builds customer confidence and trust. By implementing best practice return processes, retailers can increase customer acquisition and retention as well as reduce operational expenses and lower call center volume.
Today�s Customer Service Challenges
It�s simply not enough to provide customers with exceptional service in getting packages out the door and into the home. Today, direct retailers must also provide an exceptional returns service. The reward: loyal and more profitable customers. A retailer that offers a poor returns experience risks alienating an entire generation of shoppers. These customers will lose confidence in the merchant as well as in the general direct-purchasing process.
Shopper surveys often note the difficulty of the returns process as a primary reason for customer dissatisfaction. While returns have traditionally been an afterthought or a �necessary cost of doing business,� GartnerG2 Research�s recent survey of 100 retailers ranks returns management as the number one business priority for 2003.
Returns Management Best Practices
A returns management index (RMI) developed by Newgistics, Inc. measures the complete impact of a retailer�s returns-management process, from the customer through to final merchandise disposition. The RMI is used to identify best practices among direct retailers. Newgistics� suite of return-management services spans the return cycle, including an intelligent barcoded customer return label, transportation, processing, disposition and reporting.
Direct retailers can now address the returns issue head-on by offering customers SmartLabel, the merchandise return service from Newgistics in partnership with the United States Postal Service (USPS). Recognized as an RMI best practice, SmartLabel provides a unique and convenient way for customers to return unwanted merchandise.
Customers simply peel the pre-addressed, pre-paid, barcoded SmartLabels from their order summaries, affix them to the return packages, and drop them off anywhere in the USPS mail stream. The USPS� �last-mile� coverage and millions of convenient drop-off locations make it the most efficient and customer-friendly return service.
�Newgistics has a system that will help Neiman Marcus marry our commitment to provide the �ultimate in shopping experiences� with the ultimate in returns ease,� says Jessica Weiland, senior vice president of marketing at Neiman Marcus Direct. �We want our customers to be able to experience the convenience of shopping direct. We believe Newgistics� return program will prove to be a key initiative in providing a greater level of service to our customers.�
Customer and Call Center Notifications
In addition to convenience, customers want to be confident that the return process has been completed, including the status of any credit or exchange when the retailer receives the package. As a best-practice service, SmartLabel gives customers visibility to the status of their returns much sooner than traditional returns-management methods.
USPS delivers SmartLabel packages to regional Newgistics processing facilities. Within days after the customer drops a return into the mail stream, the label barcode is scanned, and customer return information is reported back to the retailer. Customer service call centers then have insight to returned packages before they actually hit the retailer�s dock. Call center associates can proactively address a customer�s exchange or credit needs, preempting and eliminating additional inquiries.
The SmartLabel service also features SmartLabel Online, enhancing customer satisfaction with two additional services: the generation of new prepaid, customer-specific SmartLabels from the Web and the tracking of returns in-transit.
Through a secure link, a call center associate can create a complementary appeasement label and immediately e-mail it to the customer. Retailers can also set up SmartLabel Online for easy customer access. If a customer has already used her SmartLabel to return merchandise and later decides to return another item from the same order, she can create and print her own SmartLabel.
In addition to creating new labels, SmartLabel Online incorporates advance visibility data for package tracking, 24/7. With just a few mouse clicks, the customer will be able to view a returned package�s status as it moves through the return process.
Reverse Supply Chain Visibility
The retailer�s receiving warehouse can also capitalize on returns visibility at the earliest possible stage. Newgistics sorts the packages and transmits delivery data to the retailer days before they arrive at the retailer�s warehouse.  This information can be channeled into greater supply chain efficiencies and cost savings.
A Proven Customer Win
Customers overwhelmingly choose the convenience of the SmartLabel and the postal system over other return methods. Leading retailers Eddie Bauer, Spiegel and Newport News recently reported that 77% of their customers who return merchandise today select SmartLabel.
�The SmartLabel service makes returns more convenient for customers and enhances the overall shopping experience,� explains Rich Lauer, vice president of operations for Eddie Bauer, Spiegel and Newport News� parent company. �Our customers have responded well to the service. And SmartLabel hasn�t just improved overall customer satisfaction. Thanks to the advance return notification and the resulting improvements in customer service and warehouse processes, our business has also experienced significant operational cost savings.�
Janet Mitchell is senior vice president Marketing of Newgistics, Inc., a leading provider of returns-management services for direct retailers. She may be reached at For more information, you can visit