Try before you buy: the logic behind #ReverseLogistics!
When you buy a shirt or a new pair of shoes, what’s the first question you ask? Are you sure they are the right size? And will the people around us like them? (After all, we care what they think!) Obviously, these questions are even more pressing when you buy online, via an e-commerce website – which is increasingly the case in the fashion industry.
So: what are the solutions online brands that online brands have developed to encourage e-shoppers to stick with their virtual shopping baskets rather than abandoning them without finalising their orders?
What are the brands’ solutions for cart abandonment
One of the most significant advances arose in a model developed by Zappos in America, offering free and unrestricted returns. Currently, 89% of French consumers believe that free returns “drive online purchases.” Additionally, the fact that 73% will add to their shopping baskets to reach the threshold for free delivery and returns, and you can understand how this premium service has become an essential part of the digital customer experience.
89% of French consumers believe that free returns “drive online purchases.”
Returns are much more expensive than shipments
In an interview given to Arvato, Frédéric Legras, a partner in the FAQ Logistique Conseil consultancy who manages the partner warned that :
“There is a vast business opportunity, but only proper execution with flexible returns (not to mention the achievement of economies of scale) will be essential for suppliers who want to access this huge potential pool of customers.”
At the moment, however, returns are significantly more costly than outbound dispatch: up to three times more expensive for stores that currently lack the ability to automate the processes involved. Despite this financial burden, nearly 25% of online vendors assert that they are ready to adopt this service for their customers’ benefit. Evidently, this value proposition can become both a source of competitive advantage and an excellent way to win new customers and secure their loyalty. By putting an end to their customers’ fears and natural purchase blockers, vendors can naturally increase their order volumes, which directly affects their logistics costs. In the report into British and American retailers published by Brightpearl it is also possible to observe that this form of returns management is primarily used by consumers aged between 24 and 35 years, while the over 55s state that they are highly interested and conclude that they would buy more if this option were available to them.
How e-merchants will manage logistics without losing customers and money
It remains to be seen how online vendors will manage bidirectional logistics, with a level of efficiency that will enable them to retain customers without losing money. However, if the average order size increases from an average of three items per order to five, “planned” returns will also increase substantially! Customers will not expect to retain everything they buy – and perhaps less than half the initial order if free returns are offered. The returns management process can involve up to seven people, while at the moment, nearly 69% of retailers are yet to invest in the necessary technology. This is the case despite the fact that it can lead to more fluid processes and lower costs. Clearly, the challenges are substantial and there is a pressing economic need to convince major online retailers that it is worth adopting the most innovative logistics solutions that exist.
To read also : Reverse logistics: an opportunity for geolocation?