The missing piece of omnichannel retail: returns
It’s almost time to stop using the term omnichannel retail.
Modern customers have told retailers that they expect consistency across channels during their shopping journeys. That caused some disruption several years ago, but the market responded.
Retailers that haven’t grasped the concept of omnichannel and implemented it successfully are generally out of business or losing serious market share to slicker competition. The term omnichannel has more or less become superfluous: It is now implied in the simple term retail.
That’s almost true. One gap where many retailers are still struggling to understand and respond to evolving expectations in the marketplace is in the return process. The dichotomy is rooted in disparity between how retailers and consumers view returns as a whole.
While retailers still typically view them as necessary evils and costs of conducting business, consumers see them as natural and occasionally inevitable aspects of purchasing. As their expectations for interactions with retailers across sales channels have become more sophisticated, so too have their demands for how returns are handled.
Here’s the bottom line: Consumers understand they will want to return a portion of the products they buy. They include perceptions of how that process will go when deciding which retailers to patronize, so returns go a long way to earning business and building loyalty. But the benefits of returns done right don’t end with customer satisfaction; they also provide business intelligence to retailers and help cut losses.
Regardless of what channel is used to make a purchase, when all transactions are integrated in a single database, they can be reconciled against returns no matter what channel is used to process them.
Modern customers are less likely than ever to present receipts because they have been trained not to worry about them by retailers who can look up any purchase by credit card number, name, or member club information. True omnichannel retailers can immediately retrieve transaction data regardless of what channel was used for the sale.
When returns are processed against this original purchase data, retailers can provide a seamless experience for customers while eliminating bookkeeping errors on the back end. It also ensures that the actual price paid, including any discounts or coupons, is refunded and avoids fraudulent returns where sophisticated thieves obtain refunds for stolen merchandise or attempt to receive refunds larger than the original purchase price.
Additionally, tracking returns properly keeps inventory data aligned with real-world availability and enables merchandise to enter the reverse logistics supply chain swiftly.
Even in our omnichannel retail world, all channels are not created equally. When parsing return data to identify problematic merchandise, intelligence on the relationship between channels and SKUs can come to light that reveals easily correctable problems.
If an item is experiencing much higher return rates when purchased online than in store, perhaps expectations of the product’s performance are not being articulated well on the web. If the items are coming back as defective, this could reveal a packaging problem causing damage during transit. The possibilities are infinite, and analyzing returns variables like original purchase channel often reveals issues that would otherwise fly under the radar.
Occasionally, a particular customer becomes problematic: the serial returner. Omnichannel has provided more opportunities for consumers eager to abuse return policies for their own gain, but sales data integration and return data analysis can be used to ferret them out. Once identified, their accounts can be flagged so that future returns are denied or questioned regardless of what channel is used.
Smart retailers have successfully countered these fears by offering incentives like free shipping on returns, but that only solves the financial aspect. Including preprinted return labels with every order alleviates even deeper rooted concerns over the logistics of planning a return like waiting on hold for extended periods to obtain an RMA number, what carrier to use, and how to get the package to an acceptance facility.
These labels streamline returns for retailers as well, cutting the time and labor required to process them. Printed labels eliminate human error and illegible handwriting, while barcodes on return forms make the original transaction data easy to call up as soon as they are scanned. Merchandise like consumer electronics, high fashion apparel, and seasonal items lose value quickly, so cutting the time it takes to get them back into inventory yields measurable cost savings.
The very same technology that enables omnichannel sales can be used to power omnichannel returns, so it is really a battle of will over capability. There are no barriers to optimizing the return process that almost any retailer cannot overcome. Doing so is increasingly necessary to winning and retaining customers and required before a retailer can convincingly call itself omnichannel.
Zeke Hamdani is director of Web services for Celerant Technology.