Posted by: LCP Consulting Wednesday 13 January 2016 10.21

This week the British Retail Consortium’s (BRC) Online Retail Sales Monitor found that online sales for non-food products grew 15.1 per cent in December 2015, compared to a year earlier. But the increasingly online festive period can be a challenging time for retailers – and delivering customer service excellence isn’t all about the sale. A report in Retail Systems last week highlighted that ‘Mail Back Monday’, the first Monday of the New Year, saw customers return nearly one million parcels. And with around 10 per cent of all refunds for the year taking place between Boxing Day and late January, now is the perfect time to discuss how retailers, in general, are delivering on returns.

Returns are a vitally important area – but often underrated. A recent report found that 7 out of 10 customers rated the quality of a retailers’ return service as “very important” to their purchasing decision. Unfortunately, our report, The Omni-Channel Journey, found that many retailers are failing short, taking a retail-centric rather than customer-centric view on managing returns.

 Just 28 per cent of omni-channel retailers we surveyed recognised “managing returns as seamlessly as we manage sales” as one of the three essential factors in aligning to customer needs. And fewer than 5 per cent claimed their returns policy is customer-driven. Either it is not on their radar or considered a hygiene factor.

Surprisingly, returns speed/efficiency also scored very low on retailers’ supply chain design drivers list (see chart below). This indicates a retail focus on ‘making the sale’ at the expense of delivering a broader customer experience along the complete journey.

In an omni-channel world, forward-thinking retailers need to design fast, efficient, customer-centric returns processes to ensure customers get their cash back faster. The most successful retailers are implementing measures such as:

• Returns-ready packaging

• Returns labels in original package

• Easy drop off/collection points

• Credit on first scan, not after the retailer has processed the return

Over the last five years we have seen a shift from either post only (pure play retailers), or store and post (bricks and mortar retailers), to approaches that involve post, stores, third party collection points (e.g. Collect+) and Couriers. This has raised the complexity of managing the process and inevitably adds cost. It will be interesting to see how this area develops over the year ahead as retailers work to improve their customer returns experience.