Covid-19 has dramatically changed the way customers and retailers operate in eCommerce. As lockdown and social distancing measures come into force on a global scale, eCommerce has had to adapt quickly.
In this blog we look into the effect of Covid-19 on UK based eCommerce, and potential strategies to manage returns in this new environment.
Effect on Retail & Returns
Overall, year-on-year sales for UK eCommerce is 23.7% up (IMRG), though the increase is down to a huge rise in demand for health & beauty, home & garden and electrical goods.
Clothing sales have dropped by 27.6% year-on-year, but even with the reduced demand, some clothing retailers are struggling to cope as staff are furloughed and social distancing is enforced in warehouses. This effect is being compounded by issues in the supply side, particularly for clothing brands as factories in Vietnam, Cambodia and Bangladesh are forced into job losses and factory closures.
Effect on Carrier Services
Covid-19 has had a varied impact on carriers. Some, such as Inpost, Hermes, Fedex, Collect+ and Royal Mail retain much of their pre-pandemic service levels. However, DPD, Correos, Celeritas and DHL are among the carriers that have had to shut or heavily reduce their outlets and services. In particular, DPD have closed all UK ship-to-shop and return from shop services, with much of their European network also badly affected.
Carriers are temporarily going contactless. This means no use of handheld devices and no need for a signature from the recipient. For return pickup services, carriers are instructing the returner to leave the parcel in a safe place, usually in a porch or on the doorstep.
Ultimately, this is causing significant delays throughout the order cycle.
How should retailers adapt their returns process
Extend your returns windows
A common response for retailers is to lengthen the returns window from the usual 14 or 30 day, to 60 day returns period which is now a common timeframe, particularly for those selling fashion apparel. Retailers that are slow to lengthen their returns window will see a fall in customer loyalty.
Move returns online only
Mass store closure obviously makes in store returns impossible, so moving all returns to online will ensure customers can still return. Online returns portals are proving to be an increasingly popular solution as it offers potentially easy experience for customers, drives traffic back to retailers’ websites and the opportunity to decrease costs.
Pre-printed return labels
Packing pre-printed return labels into parcels at the point of dispatch can offer convenience for customers, especially if there’s a choice of carrier services to choose from. However, forcing customers to return via a carrier point far away from their everyday journey can alienate them.
Add new ways for customers to return products
With some economists warning that everyday work life will not return to normal until 2021 at the earliest, retailers should be looking to incorporate as many collect from home return services as possible. Adopting these early could prove to be a valuable way in ensuring a good customer experience during the worst of the pandemic, as returners are a) cutting down on non-essential travel and b) facing a reduced choice of nearby return drop off points in-store.
However, several well-established postal services are still operational. For example, Royal Mail’s operation remains relatively unaffected as many post offices have kept open. Inpost’s contactless locker box network offers the perfect service to maintain a great return experience while adhering to social distancing etiquette.
Move to a paid or subsidized returns model
With many retailers suffering from the combination of an absence of footfall in their store and reduced fulfilment in their warehouse, profit line has taken a substantial hit from the effects of Covid-19. Moving away from free returns to a paid or subsidized process can help to offset some of the financial hit. Combined with material improvements in the returns process such as collection from home and instant refund on the first carrier scan, loyal customers will understand the price increase if they’re getting a better returns experience.
Offer instant refunds
Retailers offering instant refunds will put themselves ahead of much of the competition in a time where refunds are slow to reach customers’ bank accounts. While there will be some customers who breach the returns policy, these will be in the minority.
Download our returns whitepaper to start formulating your winning strategy