Make or break: Inefficient returns processes cost retailers lost sales and customer life time value, warns a new report


This article is brought to you by Retail Technology Review: Make or break: Inefficient returns processes cost retailers lost sales and customer life time value, warns a new report.

Retailers' returns policies present critical conversions and customer retention moments in European shoppers' buying journeys, a new report from KPS, an agile transformation consultancy, reveals.

Original research in the 'From First Look To Last Mile... And Back Again' Report showed that over half (59%) of consumers say a retailer's returns policy directly impacts their decision to buy with a certain brand or retailer.

Over half (51%) of consumers will not order from a company that does not have a free returns policy. Meanwhile, two thirds (63%) want the option to return a purchase via any channel if they decide not to keep it, with 41% less likely to order a product online if they cannot take it back directly to a store.

What's more, over a fifth (21%) of consumers said that if they return one product, they would end up returning their entire online basket, suggesting that just one 'problem item' can cause additional lost sales and put the entire at risk.

Not only does a retailer's returns policy impact the decision to buy from a certain brand – it also impacts their propensity to repurchase from that company.

While 21% of those who return a product said they wouldn't buy from that brand again, 72% of shoppers said they would consider shop with a retailer again having returned a product, as long as the returns process was both quick and efficient. This, the report suggests, presents a key opportunity for retailers to 'save a sale' by ensuring their returns process is both fast, in terms of turn-around time and refunds, and convenient, by offering cross-channel returns either in the store or by post.

Frank Lochbaum, Managing Partner at KPS, commented: "While the point of payment was traditionally viewed as the moment a conversion completed for most retailers, the truth is that a sale is not a sale until the customer decides to keep an item. And most importantly, what happens after the checkout can influence not only that specific purchase, but a customer's relationship with the retailer as a whole – and the likelihood they will keep shopping with them."

"The returns process is really where retailers need to think about their wider value proposition – both in terms of how it influences individual sales, and how it impacts overall customer relationships – and ensure an efficient, flexible fulfilment and after sales service is maintained to nurturing long-term value."

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