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Retail returns are probably the last thing on your mind right now...

by Laura Gee

retail-returnsThe impact of COVID-19 stretches every walk of life and retail is no exception. As a business solely dedicated to managing retail returns, we see that returns are rarely a priority at the best of times, never mind in times of global crisis. In this blog we’ve looked at the potential knock-on effect of the widespread virus with some suggested solutions to keep your returns network operational.

The 30 second version:

  • Fashion retailers are really feeling the pinch of the pandemic, with online fashion sales plummeting by over 40% YOY in March. 
  • Fewer clothing purchases and global lockdowns have both contributed to a decrease in return volumes for fashion retailers. 
  • To help alleviate customer service queries, we encourage retailers to speed up their refunds, at a time when the reverse supply chain is slowing down. 

speed-up-refundsThe five minute read: 

We’re only 4 months into the new decade and no-one could have predicted the situation we now all find ourselves in. As BBC News puts it so eloquently every night, we really are in “unprecedented times”. The Coronavirus outbreak has been called “the biggest global challenge since World War Two”, meaning that for many of us, the current climate is like nothing we’ve ever seen. 
As the UK enters its third week of ‘lockdown’, and we adjust to changes in our personal lives, businesses across the world are grappling with an entirely new way of operating (or not operating in some cases). 
Whilst supermarket panic-buying seems to be calming down now, the demand for consumables is still high and the retail sector is in flux. As the primary focus for retailers shifts to safely fulfilling outbound orders and half of UK businesses scale back their workforces under the government's job protection scheme, who is left to spare a thought for returns?
How is online retail performing amidst COVID-19?
On 23rd March, the UK government ordered that all non-essential physical stores were to close, so you’d expect that market share to shift to eCommerce instead. That rings true for some product sectors with health and beauty retailers like Boots forced to use a Black Friday style virtual queueing system to cope with unexpected online demand. Meanwhile, other sectors have taken a real hit with sales orders rapidly declining.
Credit: Boots
IMRG have been monitoring order data from 300 retailers across different product sectors and it’s clear that in the UK, the nation is preparing for several weeks confined to their homes. Their dataset reveals that the sale of home and garden equipment has soared over 50% YOY whilst electrical goods have seen the biggest increase in orders, up nearly 70% YOY as shoppers seek home office equipment, fridge freezers for their food stashes and gadgets for entertainment. (We won’t pass judgement on the 291% increase in online alcohol sales reported in Forbes). 
Meanwhile, fashion retailers are really feeling the pinch of the pandemic with online fashion sales plummeting by over 40% YOY in March. People simply aren’t refreshing their spring wardrobes to parade around the house or for their allotted daily walk. The first week in April does however show a slightly more positive story as YOY sales started heading in the right direction again, with the sale of childrenswear especially helping bring this trend back up (according to IMRG) but overall, the online clothing industry is still 27% down YOY. So it would seem we’re all happy living in our PJ’s and loungewear for the foreseeable. 
Year on Year Sales Growth as shown in the latest IMRG COVID-19 webinar on 9th April
Credit: IMRG
We recommend tuning in for the weekly IMRG COVID-19 webinar updates every Thursday as they share the latest view of the UK’s online retail landscape.
How will Coronavirus affect returns behaviour?
Fewer clothing purchases and global lockdowns have both contributed to a decrease in return volumes for fashion retailers. So, what can retailers do to ensure that customers who're unable to return their orders aren’t left out of pocket and frustrated? 
We’ve outlined 3 returns challenges retailers are facing right now with the potential impact and our recommended solution.

COVID-19 returns challenge #1:
All non-essential stores are closed in the UK

‘Buy online, return in store’ (BORIS) isn’t possible right now

Manage returns online

When deciding where to shop, 61% of shoppers normally like to be given the option to return to store and one of our multi-channel retail clients tells us that they typically see 80% of their returns volume via their physical store network. Because of figures like these, many multi-channel retailers have neglected to optimise their online returns experience and instead encouraged shoppers to return to store, favouring the potential for reconversion as they browse the shelves on their way to the cashier. This means that they, and many of their shoppers, could now be finding themselves in uncharted waters as the option for shoppers to return to store is taken out of the equation. 
Online shopping really is the only option now and the surge in eCommerce is expected to outlive Coronavirus across Europe, with 6/10 shoppers saying they will continue to buy as much online as they do today once the pandemic has passed. So as shoppers become increasingly comfortable with buying online, retailers with a well optimised online returns process have an enormous opportunity to get ahead of the competition. As physical stores close, online market share for returns rises, so retailers who manage returns online are able to be more dynamic with their range of return methods offered. With the increase of carriers offering ‘mobile return’ options, driven largely by retailers need to become more sustainable, shoppers don’t even need to own a printer anymore.
Get in touch to discover how ReBOUND can help you manage returns online.
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COVID-19 returns challenge #2:
UK goes into lock-down

Shoppers can’t leave the house

Extend your returns policy
Now that shoppers are confined to their homes except for essential journeys, travelling to send back their unwanted items has, quite rightly, slipped down the priority list. As a result, retailers with shorter returns policies could be finding themselves inundated with shopper contacts, worried that they’re going to be left out of pocket. 
By extending your returns policy, shoppers are given the flexibility to return their items when the COVID-19 crisis is behind us, and it is safe to do so. A 14 day returns policy, whilst meeting the legal minimum requirement in the UK, can encourage unnecessary journeys at a time when shoppers should be staying at home. In the week commencing 30th March, IMRG tracked that 43% of 300 retailers had an extended returns policy advertised on their website, with the majority extending their returns policy to 60 days.  
It’s crucial that any change to a return policy is communicated to shoppers effectively. IMRG reported that 36% of retailers who had extended their policy, had ‘complex’ messaging about how their policy had changed, and how long shoppers now had to return.  Website banners, social media and email comms are all ideal places to be advertising this extended offer. We’ve already seen some great examples: 
 Credit: ASOS, PrettyLittleThing and Boohoo
COVID-19 Returns Challenge #3:
Global supply chains are disrupted

Returns shipments and processing gets slower and more expensive

Offer shoppers faster refunds
Regardless of the product sector, all online retailers are at the mercy of their logistics network. Carriers across the globe are contending with Government restrictions, reduced air freight capacity, increased pressures from retailers and consumers, as well as prioritising the health and safety of their own workforce. All of these challenges translate into a slower returns network, ultimately resulting in an influx in customer service contact as concerned shoppers look for reassurance on their order and return status.
The idea of speeding up shopper refunds when the reverse supply chain has slowed down may seem counter-intuitive. But whilst priorities will understandably be elsewhere right now, it’s important to remember that it isn’t just your Instagram content that’ll leave an impression, the overall returns experience can also influence your brand image. With 73% of shoppers agreeing that the overall returns experience impacts their likelihood of purchasing again and 25% of shoppers citing a delay in refund being the biggest contributor to a poor returns experience, a delay in processing refunds could cause far more damage than just the initial customer service cost. 
As the Coronavirus pandemic continues to unfold, it’s unclear when we’ll start seeing retail sales and returns data level out against the usual forecast. Retailers with an online returns journey have the advantage of first sight on a shoppers intent to return, without having to wait until the parcels finally show up in the warehouse. ReBOUND provides a fully tracked international returns service, so whilst returns might be the last thing on your mind right now, you can leave it to the experts to take it off your plate. Get in touch to find out how we can support your online retail returns during this difficult time and beyond.
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