We’ve all done it: returned something because it’s too big, too small, looks better on the model than it does on us, or simply because we didn’t need it in the first place. With almost half of online retailers offering free returns, it’s never been easier to send back an unwanted item. But it’s time we had a serious conversation about the hidden environmental cost of our buyer’s remorse.
Returns now make up approximately 10-15% of the total carbon footprint of a parcel. And reverse logistics company Optoro2 estimate that 2.2 million tonnes of returned goods end up in landfill each year in the US alone. These impacts are often invisible to consumers.
A simplified returns process offers up many opportunities for retailers and could point the way towards sustainable solutions for the eCommerce market. But predicting returns behaviour and having the infrastructure and processes in place to manage the ever-increasing volume can be a significant challenge.
We spoke to eCommerce returns solutions experts ReBOUND to get the lowdown on trends, data and where the future will take us.
ReBOUND was founded in 2014 to plug gap in the market for a cross-border returns solution for online retailers, so we’ve always strived for a truly global returns solution. We realised early on that nobody had a good word to say about returns, so we set out to change this, encouraging the retail sector to embrace returns as an opportunity to improve the customer experience and ultimately sell more.
We believe that returns can be positive and this underpins our brand. They’re not just the necessary evil of buying online, but an integral part of every customer’s experience. Retailers are starting to come around to this view, recognising that getting the returns proposition right can actually boost sales and increase the lifetime value of a customer.
Our unique offering has seen the business grow significantly over the past 7 years, most recently ranking 19th in the Sunday Times International Track 200 and our company mission is to “help retailers achieve smarter, more sustainable returns whilst enhancing the customer experience”.
We’re increasingly seeing returns talked about in media, whereas a few years back there was next to no news in the space, so awareness is now spreading. With the surge in eCommerce activity caused by lockdown, returns have also followed suit increasing in volume by 65% during the COVID crisis, so returns are here to stay.
Over the past few years, we have also seen a lot more retailers getting to grips with the idea of making returns easier, which naturally increases return activity. The ownership of returns within a retailers organisation has also broadened. For example, we used to solely engage with people in logistics roles, but we’re now seeing multiple stakeholders involved in returns discussions – and we strongly advocate that this should be the case. Retailers have begun to understand that returns are more than just an operational challenge, with more returns projects are now being driven by a Customer Experience Director or an eCommerce Director. Someone in the customer service team can see first-hand the frustration customers have with a poor returns process through the number of tickets raised by shopper complaints about returns and refund speed, so their input is key.
Black Friday used to be a single isolated day, but retailers are now extending those sale periods throughout the whole of November. Our data shows us that instead of one single wave of returns coming back, those peaks are now lasting longer. In 2018 the volume of returns following Black Friday increased by 143% on the previous year. In 2019 the increase was up 302% on 2018 volumes . We notice this trend increasingly impacting fashion with the launch of ‘try before you buy’ payment options. There is an element of sales psychology in play here as well. Retailers tap into the ‘impulse buy’ through promotional offers such as ‘spend £5 more to qualify for free delivery’. This often prompts shoppers to add extra ‘basket fillers’ to qualify for the free shopping, with the intention to just return them later, so retailers could inadvertently be driving up their own return rates.
Returns have traditionally been the neglected element of eCommerce, and so many retailers don’t have any real visibility over their returns. If you don’t know what is coming back, in what volumes, and for what reason, then how can you possibly know what is the right root cause to address? It may be frequent manufacturing defects, non-standard sizing, issues with website descriptions… The list goes on. The actions a retailer can take to remedy these issues differ, but most retailers simply don’t know where the problem lies. We want to help retailers move away from the ‘blame game’ by arguing that it’s not just the shopper’s responsibility to ‘shop less’, but also the retailers responsibility to make sure that they are selling the right things to the right people. And that’s where the developments we’re making to our platform come in to play.
Technology has already had a huge impact on the returns industry. It is technology that allows the eCommerce sector to grow, increasing the need for a streamlined and efficient returns process. By moving the returns experience online instead of issuing a label in the outbound parcel, this gives retailers a wealth of data at their fingertips.
Not all returns need to end up at the same destination. Our vision is that technology will enable retailers to get better control of the return journey, diverting items through smart routing based on set rules such as flagging an item based on condition, price or shelf-life – redistributing to charity or recycling partners. This not only prevents items being sent to landfill, but also minimises unnecessary carbon emissions from cross-country transport. Without technology, retailers will struggle to achieve more sustainable returns.
Identifying the balance between cost and adoption from the industry. We always need to look at what is a practical level of sustainability with returns and then work closely with retailers to make these initiatives a reality. We always start with researching and measuring what the value of any potential initiative is to our retail clients. The ideal future is for retailers to have the right insight into their data to understand where that tipping point is between items with a high return rate and high item value, so they can start to make smarter business decisions around their returns policy and process – which will then enable them to become more sustainable. But ultimately it all comes down to supporting the business case to weigh up the benefits, positive environmental impact and managing profitability of the returns process.
One key influencer would be further regulation from the government. By putting sustainability at the heart of what we do at ReBOUND, we’re aiming to build solutions that get ahead of future legislation which will enforce more sustainable practices. More legislation would out greater pressure on brands to start responding with greater urgency.
There also needs to be wider public understanding of the environmental impact of returning online orders. We’ve all seen what David Attenborough and the Blue Planet documentary have done for the discussion on ocean plastic. The fashion industry needs its own David Attenborough effect on clothing consumption that will strike a chord with shoppers and help influence more mindful purchasing and returns behaviour. While there are a growing number of sustainable brands out there, the reality is that most shoppers will opt for cost and convenience over sustainability, although this is beginning to change as a recent ReBOUND study found that 71% of shoppers would be prepared to pay for a greener return method.
Know your data. Be curious and ask exactly why each return has happened, and then act to reduce these in future.
more than a word.