INNOVATION & GROWTH
5 ways to handle peak season returns
From leaning on data to reinforcing your logistics, here’s how you can manage returns more efficiently during the holiday season.
Peak season e-commerce delivery volumes broke records in 2020, and expectations this year are for another double-digit increase.1 But while this spells good news for e-commerce businesses, it also means that – come January – the number of customers sending back unwanted goods could also rapidly increase.
Research shows that, on average, 30% of customers return online purchases made over the holidays, and the majority do so within the first month of the season ending.2
So, how can you prepare accordingly to make sure your inventory levels remain in good shape and your processes aren’t impacted? Here are a few ideas.
Use data to predict returns
If your business has seen a few holiday seasons already, use this experience to your advantage by pulling out key insights that can help you prepare for the coming season.
Your analysis could include which products were returned the most (so you can balance your inventory better), and which times of the week saw the highest returns levels (so you can plan staff levels accordingly).
If this is your first peak season, then see what the average return rates are in your sector to give you an idea of how many goods will come back. Research shows that 12.2% of apparel purchases are returned, 11.5% of both home improvement and housewares purchases, and 9.1% of footwear.3
Strengthen your logistics
Make sure your supply chain can scale up to meet the demand that’s coming in. This could mean creating a space in your warehouses or facilities solely for returns, and putting a dedicated team in charge of those shipments.4
You could also outsource your logistics to third party logistics (3PL) partners. As well as handling the fulfilment and warehousing side of e-commerce, many also offer reverse logistics and can take on your returns too, inspecting returned goods and processing refunds on your behalf.5
Accelerate the returns process
It’s important to get returned products back on your virtual shelves quickly. This will maximise the potential for re-sale, and minimise the impact on your finances as much as possible.
This means being agile, and if necessary transferring products to different distribution centres to meet demand for them elsewhere.6 You can also implement processes that make returns faster at the customer’s end, for instance by providing them with return labels and easy options to drop-off the goods for collection.
Adapt your returns policy – and make it visible
Making a few tweaks to your returns policy – specifically, lengthening the timeframe in which customers can return goods – could relieve some of the burden on your business and help to avoid delays in restocking.
This is because a short timeframe to return goods could end up putting more pressure on your supply chain when returned items come back to your premises.
At a time when consumers are likely to be browsing lots of different websites at the same time, make sure your policy is visible on your product pages. During a regular sales period, 79% of customers check return policies before making a purchase and 42% abandon their basket if they don’t like what they see.7 This is likely to be even more competitive during peak season.
Improve the experience
Another way to make sure you can better handle returns is by reducing the chances of your goods coming back in the first place. To do this, it’s worth getting up to speed with the main reasons why consumers return products.
Research shows that for 20% of consumers, the top reason for returning something is because of a damaged product, for 22% it’s because the product looked different, and for 23% it’s because they received the wrong item.8
It’s therefore wise to make sure you’re doing everything you can to feature accurate descriptions and imagery of products on your website, and to ensure a slick packaging and delivery process so that the correct goods reach your customers in perfect condition.9
Disclaimer: The information provided on this page does not constitute legal, tax, finance, accounting, or trade advice, but is designed to provide general information relating to business and commerce. The FedEx Small Business Hub content, information, and services are not a substitute for obtaining the advice of a competent professional, for example a licensed attorney, law firm, accountant, or financial adviser.
1. 2021 Peak delivery trends | Metapack, August 2021
2. How to Reduce Post-Holiday Returns | Shopify, December 2020
3. The Plague of E-commerce Return Rates and How to Maintain Profitability | Shopify, August 2021
4. 4 Tips for Efficient Reverse Logistics in E-Commerce | TotalRetail, April 2021
5. The Plague of E-commerce Return Rates and How to Maintain Profitability | Shopify, August 2021
6. Five Smart Ways to Ride the Surge of E-commerce Returns | Supply Chain Brain, February 2021
7. ZigZag Global Returns Study 2021 | ZigZag, Septemer 2021
8. E-commerce Product Return Rate – Statistics and Trends | Invesp, April 2021
9. E-commerce Returns: How to Use Data to Grow Your Shopify Store | ReturnLogic, February 2020
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