Revising Returns: Reverse Psychology - How focusing on the returns process will help you sell more

June 25, 2015

Consider this...If you risk opening the floodgates for more cross-border returns, will it actually boost sales in the first place?

In May 2015, Graham Best (CEO, ReBOUND) attended the Home Delivery World Europe event in London alongside our partner P2P Mailing. Together with Paul Galpin (MD, P2P Mailing), they co-hosted a roundtable on the Wednesday to question the what’s, why’s, where’s and how’s of reverse logistics in online retail. Paul said “we’re increasingly asked by our customers for a cross-border returns solution and it’s a problem area in logistics which until recently has been brushed under the carpet. Now that ReBOUND is out there, it’s important to talk about the challenges faced and the Home Delivery World event was a great forum for this”. Retailers are often incredibly focused on the outbound because obviously it’s linked to sales. So the ReBOUND team like to challenge this mentality by asking retailers to focus on the returns experience so that the more customers return items, the more you will actually sell.

Psychology

Ask yourself these questions…

  • Do you worry that a slow returns process prohibits international growth?
  • Are you worried about the impact of returns on customer loyalty?

If you answered yes to those questions, then you’re not alone. If you answered no, then you’re either a brand with a legendary returns experience, or you’re so focused on outbound that returns don’t get a look-in. “Returns have traditionally been the poor relation of retailing – there’s little doubt about that. And it’s not surprising as to why. They are a hassle to process, costly to manage and often used to end up lost in a retailer’s stockroom somewhere gathering dust and losing money.” (Liz Morrell, Supplement Editor, Internet Retailing.) A third of retailers surveyed in the Internet Retailing Returns Research Report 2014 indicated that improving the returns process and consumer experience is an area of future focus for their brand. However another third admitted that making these improvements wasn’t something they were considering because they felt it was not a priority or was too complicated.*

These retailers “understand that by getting to the bottom of their returns and improving their returns processing and procedures can greatly improve the bottom line and lead to happier customers, reductions in returns and more money staying in the till.” – (Liz Morrell, Supplement Editor, Internet Retailing.) So this third of brands surveyed have identified the opportunity to sell more by using returns as a strategy but are struggling to make the changes to answer yes confidently to these questions…

  • Do you use returns as a way of distinguishing your brand against your competitors?
  • Is improving the cross-border returns experience a priority for your brand?

It’s a reverse psychology mind-set that retailers need to adopt as you must risk opening the floodgates for more cross-border returns in order to boost sales in the first place. Graham adds “the retailers that are partnering with us understand that and have taken the right steps to address it”. Even back in 2012, Craig Adkins of Zappos supported this idea when he revealed “our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers.”** The customer experience is cyclical, not a journey from one point to another and the way returns are handled makes a real difference to the way customers feel about you and your brand. If the experience is positive, then trust is built between the consumer and the retailer, meaning the customer is more likely to stay loyal. What your buyers really want (on top of free returns) is convenience, a seamless experience, good customer care and a fast refund time. At the point the consumer decides to return, the retailer has the opportunity to ensure this experience is hassle-free and positive overall but there is plenty of research to suggest this isn’t always the case. A survey sponsored by Endicia highlighted that 46% of online shoppers in the USA kept purchases they didn’t want because returning was too inconvenient, confusing and expensive***. More recently in 2015, another report shows that 39% of consumers in the USA state that they have re-gifted a present just to avoid the hassle of the returns process.**** This means the retailers are missing the opportunity to keep those customers engaged.

Reverse logistics now has a pivotal role in the entire lifecycle of online retail and like P2P Mailing who break down barriers to cross-border trade on the outbound, ReBOUND has adopted this ‘global reach with a local touch’ approach. The solution has been developed as an international supply chain solution using trusted local carriers and allows customers to pay for their return online in local language and local currency. Paul comments “returns are increasingly seen as an opportunity to drive cross-border sales rather than an obstacle to sort out later. The harsh reality is that your sales could have already taken a big hit due to your returns process not being in check and you wouldn’t even know it. ReBOUND complements retailers’ ambitions to sell more overseas because it doesn’t just address a logistical challenge, it is a managed returns solution that has been designed to be consumer facing.” The cultural insight which P2P Mailing has shared with ReBOUND has been invaluable in shaping the innovative global returns solution which is much more than simply moving products from B-A.

The brands that embrace their returns policy as a powerful marketing tool have seen the opportunity to offer their international customers a better returns experience with ReBOUND which is why the returns specialist has on-boarded 12 major retail brands in 2015 so far. Read more about why ReBOUND is the market leading managed returns service for international eCommerce.

*Returns Research Report, Liz Morrell, Supplement Editor, Internet Retailing February (2014)
**Econsultancy – ‘21 ways online retailers can improve customer retention rates’ (2012)
*** Endicia survey of US consumers featured in Entrepreneur ‘4 things Shoppers want in an online retailers’ returns policy (infographic)’ Harry Whitehouse, June (2014)
**** LoyaltyOne, ‘Half of U.S Shoppers say returning gifts turns holiday fest into new year stress’ February (2015)

Written by Kelly Jones