How retailers are managing returns during the pandemic


June 23, 2021 | By RetailME Bureau

By Mark Thomson, EMEA Director of Retail & Hospitality Solutions at Zebra Technologies

Consumers spent over $800 billion shopping online last year, leading to an overwhelming amount of returns that left retailers scrambling. Returns, which have always been a challenge for retailers, have continued to increase as a result of the skyrocketing growth of online shopping and alternative shopping options. Indeed, returns from online sales are typically 3-4 times those of store-bought purchases. As more shoppers continue to purchase items online for both convenience and safety purposes, retailers are examining new returns policies that are sustainable and easy to manage long term.

The “Keep It” Returns Policy
In some instances, retailers have been seeing return rates for items purchased online as high as 40%. For stores already struggling to keep up with today’s omnichannel environment, this can be an overwhelming task. At the start of the pandemic, the volume of returns retailers received was so large, some businesses were opting to let customers keep their unwanted items rather than mailing them back. This is not an ideal long-term solution for most retailers as online shopping continues to be a mainstay shopping option.

One of the biggest reasons these pre-pandemic return policies are not sustainable is the cost of returned goods sent back to the distribution center (DC). Shipping back to a DC increases the cost of the item and reduces margin around any sales. For retailers with physical storefronts, returns can be managed through a variety of options. Some stores may opt to markdown returned items, therefore salvaging some of the product’s margin. As stores continue to re-open, and more shoppers return to purchasing items in person, requiring customers to return their items to a brick-and-mortar location also increases the possibility of them purchasing additional items. Allowing them to return unwanted goods via mail eliminates the likelihood of making up lost profits and the potential for additional purchases after making their return.

Emergence of Returns Management Companies
The impact of COVID-19 on the retail industry opened up a new market for companies that focus solely on returns. These businesses have seized the opportunity to obtain relatively inexpensive real estate in shopping malls where they can use storefronts to process returns and get items back on retail shelves. The benefit of these returns companies is that they can process returns more efficiently than a retailer, thus mitigating some of the returns expense for stores. Outsourcing the returns process may not be a realistic option for smaller retailers, but for larger ones, this can be the perfect solution for managing returns.

Looking Forward
Coming out of the pandemic, retailers will need to substantially increase their technology investments to make the returns process as foolproof as possible. Certain categories are especially problematic – shoes being a good example as sizing is so inconsistent across manufacturers that four pairs of shoes may come back for every one that is sold.

One type of technology that retailers are beginning to depend on more and implement in their operations is radio frequency identification (RFID). RFID and other hardware and software solutions improve the accuracy of returns and equip retailers with the ability to develop in-house returns processes that deliver an overall better customer experience. Unlike traditional returns that require store associates to manually search for price tags and match them to a receipt, RFID readers allow stores to quickly and accurately process returns at the counter, even if the customer can’t present a receipt and the purchase can’t be located in the system via the customer’s credit or loyalty card. Retailers can also develop a process that allows the customer to place the returned item on a counter where the RFID reader is embedded or suspended above and matches the scanned RFID tag to the receipt.

In addition to improving the speed of the returns process and helping increase inventory accuracy, building RFID into a store’s operations can help retailers identify when someone is trying to return a stolen or counterfeit item. Counterfeiting has been a growing challenge for retailers in recent years and in most cases, is almost impossible for the average store associate to identify. There have also been more attempts at returning stolen merchandise for store credit in recent months. With RFID, retailers can prove whether an item was indeed sold at one of their stores and help catch fraudulent returns.

Even after the pandemic is long over, returns will still continue to plague retailers and present an ongoing challenge that will need to be addressed. Fortunately, technology has evolved in a significant way in the last few years, enabling retailers to find the right solution to support and improve their operations.
To learn more about retail solutions that are helping stores manage returns and keep up with growing e-commerce demands, click here.

Comments

comments

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


Lulu Group partners with Amazon expanding grocery offerings to online customers in the UAE

Abu Dhabi based grocery retail chain Lulu Group has partnered with Amazon 

Continue Reading

November 24, 2022 | By RetailME Bureau
Food Tech Valley partners with Tradeling to boost UAE’s food ecosystem

UAE-government-led initiative Food Tech Valley – announced in 2021 by His Highness 

Continue Reading

November 17, 2022 | By RetailME Bureau
Lulu Hypermarket to open in The Dubai Mall in 2023

Abu Dhabi-based supermarket chain Lulu Hypermarket is all set to open in 

Continue Reading

November 10, 2022 | By Rupkatha B
Beyond Meat’s Q3 2022 results “disappointing”

Plant-based meat brand Beyond Meat’s financial results for the third quarter of 

Continue Reading

November 10, 2022 | By RetailME Bureau
Barakat unveils new biodegradable packaging

UAE’s fresh produce brand Barakat has launched bio-degradable packaging across its entire 

Continue Reading

October 27, 2022 | By RetailME Bureau
Pure Harvest CEO Sky Kurtz

UAE-based agritech start-up Pure Harvest Smart Farms has signed a Memorandum of 

Continue Reading

October 27, 2022 | By RetailME Bureau
Carrefour signed up as anchor tenant for Midtown Project

Carrefour, owned and operated by Majid Al Futtaim – Retail in the 

Continue Reading

October 27, 2022 | By RetailME Bureau
Grandiose Supermarket announces country-wide expansion plans

Grandiose Supermarket, part of Ghassan Aboud Group, has announced expansion plan in 

Continue Reading

October 26, 2022 | By Rupkatha B
100 years of Valrhona

The Valrhona journey began 100 years ago with a cocoa bean. Since 

Continue Reading

October 24, 2022 | By Justina Eitzinger
On-demand grocery delivery in 15 mins

Deliveroo UAE has announced the expansion of its rapid grocery delivery service 

Continue Reading

October 24, 2022 | By RetailME Bureau
Mariam bint Mohammed Almheiri, Minister of Climate Change and Environment

The Ministry of Climate Change and Environment (MOCCAE) revealed that the UAE 

Continue Reading

October 17, 2022 | By RetailME Bureau

Abu Dhabi-based leading supermarket chain Lulu Group has appointed investment bankers Moelis 

Continue Reading

October 13, 2022 | By RetailME Bureau




f
Download Images RetailME Magazine