Now that we’re all selling so much online, the way we handle returns becomes central to business. Obviously, as consumers buy more online, eCommerce returns increase. For example, one prediction foresees a 34.6% increase in online returns in the UK by 2022, representing a five-billion-pound a year “returns channel”. How do companies handle eCommerce returns as they sell more online?
Is it Harder to Handle eCommerce Returns?
Online retail varies in cost. Brick-and-mortar channels struggle to rationalize real estate investment. However, physical sales channels come with fixed costs. In eCommerce, the cost to acquire customers and fulfill orders vary. Sometimes, that means the cost of goods sold exceeds revenue. When customers return online orders, they drive logistics costs over a cliff.
Accommodate eCommerce Returns to Compete
Online retailers face a high return rate of online purchases. Depending on the product, returns can range from 15% to 30% of items sold online. Meanwhile, the overall return rate (at least in the US) tallies at about 8%. Moreover, that rate can bump up by a couple percentage points in the upcoming holiday season. It makes sense for consumers to return online purchases of some category items. For example, apparel relies heavily on how an item looks and feels in person. So, something that seems great online may not turn out to be an exact fit. Consumers seem to not only expect to return some items. According to some research, they prefer brands which offer accommodating returns policies. This includes free return shipping and processes to accept returns.
How Can 3PLs help?
A generous returns policy may give you a competitive edge, but it will cost you. The question is how to develop a returns method that reduces costs to maintain the bottom-line. One trend among multi-channel retailers calls for accepting in-store returns of online purchases. However, some businesses may see value in partnering with a 3PL. Third-party logistics providers free eCommerce companies from buying, staffing and managing their own warehouse. Additionally, many 3PLs provide services to accommodate eCommerce returns. Whether they own a warehouse or use a 3PL, a business must retain full control of stock in order to meet customer expectations.
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