Topic of the week – Merchants are facing problems with their Returns, and are missing out on huge potential
As more and more smaller and larger merchants and online retailers are facing increased problems with increased returns from customers, the realization that integrated returns and implementing a robust returns solution is beginning to dawn. For years online retailers, both small and larger have been so focused on competing with their products and pricing, that some may have neglected to pay attention to the post purchase and returns process. Whilst other larger merchants have reported increased returns, they have been more equipped to deal with the volume, whereas others are starting to struggle. Emerging reports from Doddle indicate that this pricing competition, that utilized the incentive of free returns in order to acquire sales, has now come back with a bite as the economy faces a downturn and prices keep rising.
You may have noticed some of your favourite brands or online stores now charging a fee for returns. This is a clear indicator of the current market state, where customers are becoming harder to come by as they shift their focus to food and utilities rather than spending on a new jacket. To make up for losses, companies are now opting to charge a small fee for returns, meaning that those with a cost-effective and viable returns solution may thrive in these new conditions. Many underestimate the amount of factors to consider when setting up a robust returns solution, from creating effective integrated returns, the speed of returning a parcel, the sustainability aspect, the amount of returns options such as collection lockers or home pick up, the processing of returns and of course the cost. There are a lot of elements that need to be nailed in order to provide effective, efficient and valuable returns.
In Doddles report, 67% of online retailers said that they have experienced an increase in return rates over the last 12 months, a 16% increase when asked that same question in 2022. 67% of smaller merchants are now reporting returns as a significant problem whilst 80% of larger merchants feel the same. This percentage has seen a sharp increase over the last rising from just 50% in 2022. Based on this, online merchants are now seeing their returns strategy as a much higher priority in 2024, with 53% saying it’s a high priority and 21% of merchants saying that returns is a very high priority.
Ensuring that you have a robust integrated returns strategy is paramount, especially in 2024 as the overall rate of returns increases. Just 39% of merchants are using integrated returns, meaning that they provide digital returns portals for customers to initiate and organise returns. Whilst this is an efficient and easy way to satisfy the customers returns request it is also an excellent way for the retailer to capture returns data on a customer level, whilst providing more control over the process and allowing for problems to be spotted and improvements to be made. 77% of merchants also stated that they would be interested in using an integrated returns solution from their carrier or logistics provider, which is where Pro Carrier can lend a hand.
Our expertise in integrated returns solutions means that your returns strategy has never been better. Allow us to handle everything and enjoy our transparent and easy to use portal for both you and your customers. And if you use any of our outbound delivery services, you can even benefit from our amazing duty drawback offering, meaning that each return could actually put money back into your pocket.
In other news
Evri has announced its best peak period figures at over 150 million parcels delivered, a 21% increase over the Christmas surge and last minute shoppers demand. However Swiss Post revealed that they delivered 4.7% less parcels at 185 million over 2023 than the 194 million in 2022, and 1.64 billion letters. Following this trend, Ofcom figures suggest people are sending less letters and more parcels, as Royal Mail’s letter delivery volumes have halved and they explore reducing their letter delivery service, eliminating Saturday deliveries.
eCommerce Market Stats
See some statistics relating to this week’s topics in the eCommerce market below.
Returns market Stats
- The average estimated return rate across all markets has increased from 23.44% in 2022, now at 28.9%
- 25% of merchants have reported no change in rate of returns over the past year
- 9% of merchants have seen their returns rate drop
- An estimated 30% of purchases are sent back to online merchants
- 64% of merchants rely on non-integrated returns solutions that limit control or cost saving capabilities to tackle emerging returns issues
*Statistics sourced from Doddle
That’s all for this week…
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