e-commerce returns can work to your advantage

June 2017—

Returns are a part of doing business on the internet.
Here’s how to handle them.

With each passing month, more and more home furnishings retailers are extending their brand online. That’s good news because consumer demand to shop online—even for something as big and bulky as a sofa—isn’t going away. But the rise of e-commerce in furniture retail has its share of downsides, too.

Returns will increasingly evolve as an inevitable occupational hazard and a consequence of unmet customer expectations.Currently, the primary challenge facing the industry is the vast difference between the customers’ expectations and demands and what retailers offer. The disconnect between the two is seen in studies that show roughly 30 percent of products purchased online are returned, in contrast to a mere 8 percent of products sold at traditional stores.

Home furnishings retailers can optimize profits and sales by understanding market demands, meeting customer expectations, and offering a holistic return and refund policy.

Around 54 percent of all customers making online purchases emphasize the significance of a return policy. However, in contrast to this huge customer demand, only 14 percent of e-commerce businesses offer free return shipping. In these cases, furniture retailers are missing out on lucrative opportunities to improve customer satisfaction, drive sales, and gain a solid competitive advantage.

It’s important for retailers like you to address this increasing customer demand and offer a return policy for your e-commerce business. This is even more crucial considering the monopolistic competition being imposed by the retail tycoons Amazon and Wayfair.

Here’s a multi-faceted and multi-dimensional framework to optimize your return policy and foster an effective coping mechanism against the downsides of reverse logistics.

Create and communicate your return policy

Given the size and weight of what you sell, no home furnishings retailer wants their products shipped back to their store. But let’s face it, if you’re in the furniture business, returns are part of the deal. A smart approach is to be prepared beforehand. You need to devise a clear and elaborate return policy and publish it on your website for your customers.

The policy should include the terms and conditions for returns, and the details related to the return process and refund.

The return policy must ideally be written in a simple language, easy to comprehend for the general masses. But, before that, do your homework so you formulate a strategy that can be used to your advantage.

Here’s what you need to do:

First, you need to research your customer’s expectations. Different audience segments may prefer different types of returns, some may want an as-is exchange or their money returned. You need to align their expectations with your business interest and create a solution that complements both. Don’t feel pressured into following the conventional return processes prevalent in the industry.

Address the intricacies of the process. You need to be direct and specific on key essentials such as within what time frame customers can return furniture and whether it’s you or the customer who will bear the cost of returns, or reverse logistics. The more you elaborate up front, the easier it will be for your customers to understand and comply.

The return process involves communication, and requires efficient and timely customer service. Therefore, efficient handling of returns should be an integral part of your employee trainee program.

Most customers won’t read your return policy while making their purchase. This is the prime cause of the inconvenience that comes coupled with returns. Make sure your customers are fully aware of the terms and conditions of your return policy.

Optimize technology to satisfy your aggrieved customers

In the retail world, a returned product is perceived as a customer lost due to dissatisfaction. However, your return policy can be just the opposite: A chance to regain the lost trust by tying your return process into the loop of technology. Since the ability to return something—and return it easily—is one of the major consumer demands, including scanable return labels in the shipment package can be an instant turn-on for many of your customers.

Similarly, you can incorporate a real-time tracking mechanism to make it convenient for your customers to keep track of their return’s process. Assign a unique tracking ID to each customer who has requested a payment refund and incorporate an automated push alert system to notify the customer of any change in the status.

This will ensure that anticipating customers are continually informed about the status of the refund and will save you a lot of hassle you might otherwise have to face, in terms of the constant emails, and phone calls asking for their payment.

Renew packaging to strengthen your brand

Evaluate your packaging design and determine if it can be reused for return. If not, talk with your manufacturer and redesign it as such that makes it convenient for the customer to repack the product and ship it back to you.

Since furniture products may include big and small items, you also need to ensure the packaging should be able to protect the product from any damage that might occur during the shipment or return process.

Reusable packaging also makes it convenient for you to pack the returned products and make it ready for the sale.

As we mentioned earlier, if a customer returns a sofa, it does not translate as the customer won’t ever purchase from you again. Incorporate some add-ons such as discount vouchers, personalized notes, user manuals and small branded souvenirs—put a cherry on top of the package.

This extra effort strengthens your brand persona, makes a pleasant surprise and is a smart way to make up for the disappointment that a customer might have to face if the product does not meet their expectation.

Seek insight into returns

While the customers may have many reasons for a return (poor quality, delayed shipment, wrong product, incorrect size) one thing is evident on the business’ part—unfulfilled customer expectations.

Customer satisfaction stems from the efforts put in by your business to meet their expectations and your expectations; you will have to identify their needs, and assess their behaviors.

The key to minimizing returns lies in the products themselves. Analyze the data related to the returned products and seek insights about the reasons and factors behind them. Customer satisfaction is inversely proportional to the probability of returns. A thorough and intricate data analysis will help you identify and overcome the pitfalls in your products as well as the online selling process and eventually lead to minimizing returns and loss.

About the Author

Amitesh Sinha
Amitesh Sinha has gained a reputation for inventory software solutions. He can be reached at amitesh@iconnectgroup.com