Returns: An ignored plague growing in the D2C industry

The existence of some rampant in the e-commerce industry jeopardizes the business and puts the brand’s value at stake.

Returns are one of the rampant, which is growing in the industry despite the fact that everybody is well-aware of the problem. It is still ignored and unchecked. 

The e-commerce industry is currently receiving returns against 30% of the total online purchased goods, with a worth of $600 billion.

The ease of returning products has increased the number of customers who return products on a regular basis, therefore, the high volume of returns, their costing, and way to resolve it, are considered to be the biggest issues of the e-retail industry.

CNBC in their 2019 article reported, retail returns as a major trillion-dollar problem describing what happens with the returns and how the returns can be handled, on the basis of information shared by top e-retailers.

Amazon, Flipkart, Myntra like big players of eCommerce have blazed a trail by offering the easiest returns that are quick and free as well. Thereby, returns have turned into an epidemic for the e-retail industry.

Attracting all the research and surveys that are conducted on the retail returns because of the high cost they impact on the D2C brands by losing the resale value of the returned product as well as the associated operational costs to it.

Customer Behaviour For Returns

The fashion industry is the prime target of returns with 50% in apparel/footwear, 30% in jewelry/accessories, and 20% in health/beauty. 

The natural and unbiased reason for the returns of online purchased products is not being able to physically see the product.

Inability to look, feel, and check the product marks the major role why customers end up purchasing the wrong products in the fashion items due to the wide variety of variants available.

Some customers are serial returners contributing 61% of returns in the fashion eCommerce. 

There are two types of serial returners:

1. Fitting roomers – who end up purchasing more than required products and keep what fits. For e.g. when a customer is not sure about the size of a t-shirt he/she will end up purchasing multiple items i.e., 3 different size variants of the same product with the intention to return the unfit one.
2. Wardrobers – who wear the product once and then return. For e.g. a customer ordered 10 items, wore 8 of them, and will then return those before the return period ends.

This is the most common customer behavior noticed in returns, then comes the actual problem of damaged product received, wrong product delivered, etc. 

Problems D2C industry face with returns

The loose return policies of the brands inspire most of the returns. The brands which have higher online sales and lax return policies are receiving the maximum returns.

They receive a flood of return requests through emails and customer support and do not have any solid preparation to resolve them.

Customers then have to inquire after every few days about the processing of their return until it is resolved. This long series of emails play a major role in the dissatisfaction of the customer and pushing them not to purchase again.

E-commerce Returns is a big game to play, as it includes many departments such as logistics (carrier partners or aggregators), operations team, warehouse management, inventory management, finance management, etc. 

Fast processing of e-commerce returns is the biggest challenge for the D2C brands especially to fulfill timely refunds and exchanges. 

This does not end here, after the request is received brands face difficulties for its processing with reverse logistics, addresses with PIN code of tier 3 and tier 4 cities where reverse logistics are not available, a quality check of the product on or after the reverse pick-up, long return cycle, increased calls at customer service support, etc.

Marking is crucial as it directly impacts customers’ experience with your brand.

Customers’ expectation with returns

• 66%  of customers ask for an easy-to-understand return policy with no hidden norms and conditions.
• 50% of customers ask for a 22-32 days minimum return window after the product is delivered.
• 67% of customers want a free of cost return as it promotes them for purchasing again.
• 71% of customers want to receive an instant cash/refund or exchange.
• 50% of customers desire a return process to be completed within 7 days.

Looking at the expectation of the consumers, brands should take the returns seriously and try to deliver a better return experience to satisfy them.

As it will add competitive advantage, increase brand reputation, and spread good word-of-mouth.

Solution D2C industry can opt to manage the flood of returns

Being the least discussed parameter of the eCommerce industry, returns have occurred a huge challenge.

Although D2C brands are trying hard to accomplish the returns game successfully, they still lack when returns start to rise with the business growth. Therefore the need of delivering a better experience to the end customers is high to raise the scale of customer satisfaction, gain loyalty, and increase repeat purchases.

In order to achieve this high scale of customer satisfaction, D2C brands should use a return automated solution that can help them to easily manage the return process.

The automation will reduce the brand’s customer support service, manhandling of operations, and total turnaround time for the return cycle. Moreover, enable you to provide instant refunds and exchanges to your end customers.

Because of high demand, instant or same-day refunds are a good chance to gain customers’ trust and loyalty.