Returning Christmas gifts – the forgotten challenge for retailers

The Christmas rush can be challenging but also highly profitable for retailers. Many e-commerce businesses focus time and money on providing customers with efficient and flexible delivery options in order to capitalise on this heightened demand.

But when it comes to the inevitable post-Christmas return of unwanted goods the same level of attention and efficiency is not always apparent. Here, Paul Galpin, Managing Director, P2P Mailing, outlines the importance of developing a customer-friendly returns platform if customer relationships are to be nurtured and extended beyond the festive period.

Christmas is the make-or-break period for many retailers. Christmas 2015 saw £24.4 billion being spent online - a 12% annual increase. While ecommerce companies fine-tune their delivery and fulfilment strategy to handle this volume upsurge, far less attention is given to the corresponding handling of returns. Who hasn't heard a friend or relative say: "I've kept the receipt, if you don't like it I can send it back"? And yet, too often, sending it back is a cause of frustration.

Getting the returns process right is crucial to customer satisfaction. Research by Harris Interactive shows that 85% of customers say they will stop buying from a retailer if the returns process is a hassle and, conversely, 95% will use the same catalogue or internet retailer again if the process is convenient. And there is certainly a demand for returns efficiency. Richard Hyman, an independent retail analyst, estimated that 45% of purchases made online during the Christmas period will be sent back.

Effective planning across delivery, fulfilment and returns from the outset should mean that things run as smoothly as possible during and after the Christmas rush. It's always important to step back and view the process from a customer perspective, to ensure that services are clear, easy to use and reliable. Customers should be able to navigate the whole procedure simply and swiftly, and systems should be tested and tested again before being rolled out to the market.

By outsourcing the returns solution (and potentially the main distribution as well), companies can concentrate on simply producing a good website and online shopping experience for their customers. For small retailers in particular this may be an attractive option.

There are key benefits to partnering with an expert third party to plan and/or administrate the returns solution. The best providers will have the expertise to tailor the solution to the business, customising it to deal with national and regional differences where necessary and advising on the most appropriate shipping and returns options for the volume of mail being processed.

This third-party expertise is particularly useful for any businesses looking to sell to customers internationally. There can be import and duty considerations for customers located outside the EU, so it's important that any system is set-up correctly to ensure that the e-commerce retailer is complying with regulations and that the process can continue to be cost-effective during peak traffic times.

It should also be possible to integrate with existing IT systems and logistics providers to ensure minimal disruption and cost. Ideally, the returns process should be integrated into the website on a white label basis, so that as far as the customer is concerned, everything looks and feels the same.

Ecommerce companies that ignore the returns process do so at their peril. There are many considerations to take into account. These not only include current requirements, but also how the business might grow, and whether the returns process has the flexibility to handle that growth. This may include consideration of overseas expansion and how the company will manage cross-border returns and the ensuing complications.

Ultimately, the returns process requires careful consideration to ensure that it works for the business and for the customer. Expert providers can help to develop a function that is flexible and efficient, tailored to the particular requirements of the business and equipped to deal with the challenges of the festive season and well beyond.

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