Domino effect: the impact of Covid-19 and the shift to ecommerce on returns management

By Eddie Latham, Director and Co-founder of Velocity Commerce

It has been well established that Covid-19 has resulted in a significant shift towards online shopping. Whilst many agile and dynamic businesses have responded to this shift with an impressive pivot to focus on online channels, whether selling directly using their own ecommerce platform, exploring opportunities on marketplaces, or just using their communications channels to keep in touch with customers, there are growing pains associated with this kind of momentous organisational shift. One focal point for that pain, which has the capacity to spill over to negatively impact consumer engagement, is the returns process.

Effectively managing returns has been difficult to navigate for many online retailers, and particularly for brands that sell on marketplaces, since long before Covid-19, as strict policies can leave small businesses with little room to manoeuvre. Returns policies are known to be a significant factor in consumers’ decisions to buy from a brand, with many factoring in the potential cost and difficulty of returns when deciding where to spend their money online.

For brands and retailers focussing on ecommerce for the first time in response to the pandemic, it’s important to remember that some returns will always be unavoidable. When they do come in, the first step to effective management is having a dedicated team in place that is well prepared to handle them efficiently, especially during peak periods. Multiple retailers, in response to Covid-19, took the decision to extend their returns window to allow for decreased accessibility to postal and delivery services, as well as delivery delays. Although a compassionate position to take, this could mean that retailers will face additional pressure on their returns service for an extended period of time, and busy returns periods have a danger of significantly increasing the workload of already overstretched teams, so having a strategy in place to manage busy periods is key.

At Velocity Commerce, our entire warehouse team is trained to process returns – this is a double-edged sword as it helps vary everyone’s role, but also means that a large number of returns don’t land just on a few people if they do flood in. There are some categories in which the rate of the return will be much higher than others, and having a strategy to identify these categories and adapt the management of the returns process to suit each one will increase efficiency too.

Badly managed returns can also have a negative impact on the environment, leading to an excess of resaleable stock going to landfill. To minimise environmental impact, having a robust testing procedure in place to effectively separate faulty and damaged stock from unwanted stock makes a big difference. Also, one way to get to the root of the problem, and minimise the likelihood of a return, is to continually review the materials used in packaging to ensure the products are well protected, whilst also removing excess packaging which can put customers off.

In reality, there’s no magic way to completely eliminate returns, but by taking a holistic approach, that considers your customers, your business and the environment, you can effectively and efficiently, minimise their impact.

At Velocity Commerce, we sell a variety of products on online marketplaces on behalf of our partner brands, and managing returns is a key part of effective online retail.

Transparency is key when it comes to online retail. Some online marketplaces provide a lot of valuable opportunities for retailers to share as much detail as possible on their listings – and you should always take advantage of this. The more informed your potential customers are about the details of their purchase at the point of sale, the less likely they are to return it. Provide comprehensive information on product specifics and features, and share as many images, and even videos, as possible.

Finally, retailers can challenge themselves to always think creatively about what is going to make their customers’ lives easier, which is more important than now during Covid-19 than ever before.

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