According to a 2016 study from Pew Research, eight out of 10 Americans now shop online, but 65 percent of online shoppers surveyed said that if they could find equally as low prices as offered on eCommerce sites, they’d prefer to shop in a physical store.
As such, to keep modern consumers happy, leading retailers need to roll out omni-channel options including brick and mortar stores in addition to digital offerings. This, in turn, means providing multi-channel customer support, and facilitating returns both in store and via shipping back to a central returns depot.
However, omni-channel returns can become a real headache for retailers and customers if the right processes and technology are not in place. No shopper wants to wait in line for 15 minutes only to be told they cannot return an item because it was bought online, and no employee wants to be the one to relay that message to an already frustrated customer. When omni-channel returns are poorly managed, it puts customer trust and loyalty at risk and can lead to poor reviews online and on social channels.
Leaning on the positive examples from leading retailers like Nordstrom, here are three techniques to better manage omni-channel returns:
1. Get to the root of the problem
The first step in crafting an effective omni-channel returns policy is to remove the guesswork and highlight any problem areas in your current processes.
We recommend doing a process evaluation to see how the return process really works from the eyes of a customer and employee both in store, online and when mixing the two channels. Examine every aspect of your forward and reverse supply chain and determine who is doing what, how much it costs and whether it could be improved.
It is important to recognize that there are different endpoints for consumers and for your business. For consumers, the successful endpoint is quickly returning a product via mail or in store and receiving credit which they can immediately spend in your store, or a replacement product free of charge. For your business, the successful endpoint is the re-stocking or re-selling of disposition return items which have been inspected to ensure they are of a suitable condition. The longer returned items sit in stockrooms, the less chance you have of successfully re-stocking or re-selling them.
One you have outlined the process from the perspectives of both clients and employees, it will be easier for you to highlight and categorize pain points based on the root of the problem and set goals to improve your current systems, processes and employee training.
Do you need to re-organize your warehouse? Do you need to replace legacy inventory systems so that online and in-store purchases are registered on the same system? Do you need an online returns portal? Do you staff need better training?
It is a lot easier to work it all out when faced with hard facts and data rather than speculation.
2. Standardize your processes
Once you have ironed out the creases in your existing processes, the next step is to standardize your returns policy both in-store and online. This means that goods bought online and in store will show up on the same system at the point of return, offering employees the information they need to streamline the process and exceed client expectations.
Despite the fact that Americans returned $260 billion in merchandise to retailers last year, many smaller retailers still use manual return processes which are time consuming for employees and prone to human error. Excel sheets and scribbled lists on paper can cause an organizational nightmare, and can also lead to returned products being ‘lost’ in the system, designated to sit for too long in storage rooms, and consequently ruining the chances of them being re-stocked or sold.
However, if you embed one digital system which logs the whole return process from sale to point of return, and then continues within the same system to inspect, grade and restock returned goods, you will maximize the chance of profit from returned goods. This system needs to be fully connected so there is a data flow across the returns management system, financial logs and the enterprise returns system (ERP).
3. Use emerging technology to turn returns into an opportunity
Once a business has a returns management system which is linked to ERP and financials, then they will be creating a wealth of data which creates a lot of opportunity to improve service using analytics. The new system will be able to log the reasons why products are returned, allowing businesses to capture trends of faulty products early, pull things from shelves, and stop orders from manufacturers.
Having a connected, streamlined system also speeds up the process on the consumer side. If an attendant can see in real time whether a product is viable for return and how much store credit the customer is due, the customer can walk away happy with pockets bursting with store credit they are likely to spend while they are still physically in the store. If a client wants to return an item which is impossible to re-stock or resell, employees could be advised immediately to offer the customer the chance to keep the original item, but also receive a discount for a future purchase or returned credit.
Using machine learning AI, return systems could also be linked to recommendation engines which offer cross- and up-sale opportunities at the point of return. This would be based not just on the product, but also the reason for the return, using saved information about what customers tend to choose as their replacement item or use their store credit for.
Retailers need to realize that as more and more customers shop online, the amount of returns is only going to increase. Automating and merging your returns systems, financial systems and ERP is not an option — it’s a necessity. Those who fail to act fast are simply offering a competitive advantage to rival retailers.
And if you don’t believe me, try to manage returns this holiday season using an Excel doc, and see how your employees -- and profits -- fare.
Gaurav Saran is a Silicon Valley entrepreneur with a passion for leveraging disruptive and emerging technologies to provide innovative enterprise solutions. Gaurav is the founder of successful startups including ReverseLogix (SaaS platform for end to end reverse logistics management), BrandMapz (digital marketing platform) and CloudXtension (mobile and cloud development services company). As founder and CEO of these companies, Gaurav brings deep industry expertise and is responsible for driving the overall company direction and product strategy. His ability to combine customer vision with methodical execution and thought leadership has positioned each company as a game changer in its field. Previously, he was with Microsoft for over six years, leading enterprise sales for Fortune 500 companies such as Adobe, Symantec, Wells Fargo, Chevron and others while driving strategic executive relationships. Prior to Microsoft, Gaurav has worked at Silicon Valley start-ups such as Zoho, executing strategy, business development, sales and marketing, taking them from early stages to established growth companies. Gaurav holds a BS in ecommerce marketing and telecommunications and an MBA in global strategic management from California State University, Hayward.