We are in the midst of a Christmas season like no other. Never has the e-commerce scene attracted so many merchants to buy Christmas gifts and everyday products online. But there is a backside to the flourishing retail industry that is often forgotten – the returns. We had the pleasure of chatting with Dan Crewe, e-Commerce Manager at DHL Express about the pandemic, returns, protecting revenues, trends. Dan also shares some well-thought-out advice. Enjoy the read!
How do you think that the pandemic will affect Holiday sales in 2020?
– The 2020 holidays and beyond will continue to see a noticeable increase in online sales. I believe that people will compensate for this year having been different and will reward themselves and their families with increased gifting. Couple this with the activities that will occur from merchants to capitalize on customers being restricted and the growth will continue into the coming months of January and February. The traditional January sales will move online and cause a buzz of activity.
How can we keep after-Holidays returns from taking a bite out of January revenues?
– We always recommend that the merchants pay close attention to their product descriptions, photo presentations and sizing information. We want them to limit their returns by taking pre-emptive actions. There is also a need for returns to be payable, a minimal fee but one that will make a customer think twice before ordering multiple colours just to see what each looks like on.
How do you manage e-commerce returns like a pro this Holiday season?
– By doing the work beforehand. Pay attention to the layout, information and product descriptions. Then make it clear how the returns should be handled and any charges involved. It is important to differentiate between a return and an exchange; this is often very unclear on a website and causes confusion for customers.
What common mistakes do online retailers make during peak season?
– Putting delivery last on the agenda. By not having an express service available customers are limited to purchasing well in advance. I have seen last order dates of 14th December for a domestic delivery. That is not a customer friendly set up, there are options on the market that allow a customer to order up to the 21st December to get pre-Christmas delivery. A new customer will be won over by super service, price is becoming less important – availability of the product during peak is a prime motivator.
– Low stock levels. We have all experienced the electrical retailer that advertises a product and then it has ‘already sold out’ when you arrive at the store 1 minute after opening time. This behaviour turns customers right off and will send them to the next website in a hurry. If you are going to promote a product or line for the peak season have enough stock, have faith in your marketing so that disappointed customers are not ranting and raving about you for the wrong reasons on social media.
– Not planning early enough. We start talking about peak in August as we know that careful planning is what is required and that takes time. Merchants need to involve their transport provider in the planning at an early stage so that we know the demand for resources form our side. Peak is a time when you can win or lose customers by simply not living up to their expectations, the better planned you are the easier it is to meet those expectations.
If I say ‘sustainable returns’, what do you say?
– Achievable, but both the merchants and consumers must be prepared to invest in a solution. More often than not transport is painted with the ‘responsibility brush’ when it comes to sustainability and we are also painted with the ‘costs too much’ brush. All parts involved need to be prepared to make the necessary investments to drive all levels of sustainability be it returns or initial fulfilment. Sustainability is a lot more than just transport – packaging, processing, production and management all come with a sustainability element that a merchant needs to consider and invest in to make it a reality.
What trends do you see in 2021 for returns processing?
– The biggest trend has to be consolidation. It is not economically viable for returns to be transported as individual packages and shipped around the world. There is a need for a solid and reliable consolidation service that can process, pack and ship returns in bulk back to merchants. By doing so we will limit transports to bulk shipment instead of single package shipments.
– The other trend is hopefully consumer awareness. Some merchants are now actively limiting serial returners, others are starting to take payment. This will slowly make consumers aware that they need to adjust buying behaviours to reflect the increased costs and impact of returns. Most consumers do not know the cost of returning a product, merchants need to make people aware that there is a cost and that it is driven by their behaviour. I would like to see an increase in the way returns are dealt with by merchants – incentivise consumers to keep the product, exchanges rather than money-back returns and more focus on using a return to get a customer to repurchase.
What key insight have you learned in your space recently?
– Not a new insight but a constantly repeating one – product pricing. So many merchants seem to calculate their prices on what other merchants sell similar products for. They do not do the maths behind pricing correctly and leave absolutely no provision for transport costs, return rates or other related cost of sale elements. Pricing is more important than having the flashiest marketing, if you have miscalculated your pricing your marketing campaigns won’t last long. Merchants need to sit down with all their suppliers and calculate their costs in more depth than they do now. Everything from purchase price through to the cost of returns needs to be factored in before going out to market.
Thank you Dan for taking the time to answer some questions. And for you who have read this far, keep your eyes open for more posts like this one!
Are you ready to prioritise returns? Contact us!