Did your gift-giving and receiving go as planned this holiday season? Is there a non-hatching Hatchimal or an oversized sweater that will soon be on its way back to the retailer? If so, you’re not alone.
UPS projects that holiday shoppers will use its services to return 1.3 million packages on January 5, the day it has designated as National Returns Day. Fueled by record e-commerce sales, the carrier estimates it will have shipped more than 5.8 million return packages back to retailers during the first full week of January 2017. Those huge figures don’t even include the number of returns that will be transported by other major carriers such as FedEx and the U.S. Postal Service.
That’s a lot of unwanted stuff and a massive amount of reverse logistics. And it's all part of the e-commerce juggernaut.
USA Today reported a record amount of 2016 holiday season spending went to online sellers, which saw their sales soar 17.1 percent (the biggest online gain in at least a decade) while brick-and-mortar stores saw only a 2.6 percent increase. Though online shopping has many benefits, the downside is sometimes you don’t know exactly what you’re going to get. This is true most often for clothing and accessories, which are what e-commerce consumers return most after the holidays.
A story in The Washington Post stated an estimated 25 to 30 percent of online purchases are sent back, about triple the rate for items bought in-store. For clothing and shoes purchased online, the rate can be as high as 40 percent. A recent UPS study revealed 68 percent of high-tech online purchasers shipped an item back to a retailer. And for all of those holiday gifts that were ordered online in November and December, the National Retail Federation reported about 30 percent of those will be returned.
Chances are what comes in the house must go back to the store.
How easy or how hard a retailer makes returns can make or break fragile online relationships. With the click of a mouse or the push of a digital button, a shopper can choose another company with better return options. Returns must be regarded by retailers as an integral part of the e-commerce experience just like protective packaging materials.
“Online shoppers want the same level of choice, control and convenience making their returns as they do making their purchases,” said Teresa Finley, chief marketing officer for UPS.
In a recent Sealed Air Twitter poll asking about the most important aspect of returning online orders, the majority of respondents (42 percent) voted “easy return process.” The same goes for research conducted for Sealed Air by Kantar Retail which showed that half of those surveyed had returned items and of those, 89 percent preferred to use the original box to make the return.
For e-commerce purchases, return options are part of the secondary packaging process. Packaging that has return logistics built in to minimize shipping costs and complexity will help to keep current customers and attract new ones.
One of the best ways to ensure customers have as much confidence in a company when it comes to returns as it does with deliveries is the ease in which the delivery receptacle can become the return receptacle. When it comes to secondary packaging, special corrugated boxes designed to display and protect products simultaneously can be used for easy returns. Tear strips, which aid in the return process, can be incorporated in mailers as well the corrugated and polybag materials used by automated packaging machines.
As customer experience overtakes price and product as the differentiating factor in consumer transactions, companies need to improve all aspects of the at-home customer experience. Smarter solutions for effortless returns must be part of that experience in order to maintain a competitive advantage.