Home Retail GUEST COMMENT How retailers can ‘save the sale’ this shopping season

GUEST COMMENT How retailers can ‘save the sale’ this shopping season

by Ozva Admin

The rush of Black Friday and the arrival of Christmas are defining times for retailers and getting the returns process right is crucial if retailers are to end the year on a high note.

Major international players such as Boohoo and Zara have recently started charging customers to return items purchased online. It has caused a furore throughout the industry, with some, particularly pure online retailers like Asos, still adopting a free returns policy. It begs the question of how retailers should adapt their return policy to reap the rewards of peak season.

The cost of returns

While estimates of the impact vary, according to an April survey by mail and shipping company Pitney Bowes, online returns cost retailers an average of 21% of total order value. With customers returning more items on average since the pandemic and trends like the wardrobe on the rise, the cost of returns has never been higher for retailers.

According to GlobalData, by 2023 retail profitability will have increased by 27.3% over five years, reaching a total of £5.6bn. They are clearly a key consideration for retailers looking to protect revenue and sales. When combined with other problems facing the industry, such as inflation, rising wages and fuel surcharges, it’s a part of the profits that retailers need to recoup. And moving away from free returns has become, for some, part of the solution.

A March 2022 study by ZigZag found that 75% of customers expect a good return policy to be free. These customer expectations contrast with the realities retailers face ahead of the peak season. It’s crucial for retailers to keep their return policy competitive, even if they can’t offer exclusively free returns.

For this to happen, retailers need to provide greater flexibility in their returns process. It is essential to offer a wider range of options, including free returns in certain circumstances. Customers value retailers that embrace flexible demands and can tailor their return policy to customers’ spending habits. 45% agree that a good return policy should provide multiple return options.

saving the sale

When customers are under pressure, due to inflation or cost-of-living crises, retail sales are too. Giving customers a choice and presenting them with a variety of options, whether through free returns, exchanges or gift card returns, will satisfy customers and save the sale for the retailer.

Moving away from a blanket approach to returns is how retailers can begin to strike a balance between being commercial and differentiating. Adopting a flexible policy can provide added convenience for everyone, especially as we head into Black Friday, Cyber ​​Monday, and the holiday sales. Offering the opportunity to refund as a gift card or live exchange will negate the impact of returns on the retailer as more customers begin to opt for options that protect the retailer’s profit margins.

The four R’s

Incorporating the four R’s into your returns strategy (resale, repair, rental and refills) can also help retailers save the sale. Selfridges, for example, is aiming for these options to account for half of all transactions by 2030. Although circular trading only accounts for less than 1% of Selfridges’ transactions with buyers, the repair and resale options now available (and increasing). ) show that retailers are listening to concerns about sustainability and greater flexibility in returns.

The initiative is a sign that retail is moving in the right direction. A product that would have gone to landfill 10 years ago has a much better chance of being repurposed, repackaged and reused in 2022. It sets an example for retailers to diversify their return options, both to satisfy the customer and to make significant progress . towards net zero targets.

The future of returns

Getting the return window and policies right is crucial for retailers if they want to stay commercially competitive during the peak sales season. A return policy should be clearly communicated to customers and a variety of return options should be available.

Selfridges’ commitment to the circular economy is an approach that is likely to be on the minds of retailers for years to come. Those who don’t provide these options are sure to start falling behind. A clear and flexible returns policy will keep retailers commercially competitive while keeping the customer experience efficient and seamless.

Laura Davies is Director of Customer Success at overall zigzag

You may also like

Leave a Comment