E-Commerce Returns Management – A Simple Solution from the Fashion Industry

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What is E-Commerce?

We are very familiar with the word which is important part of our daily life: ‘E-Commerce’. E-commerce i.e. electronic commerce is a business way that allows factories as well as individuals to buy and sell goods and services through the internet. Previously e-commerce was done on computers. But the time changed. Technology was emerged immensely. Now people can handle e-commerce on tablets, smartphones, and other smart devices, and it operates in these four key market categories mentioned above. E-commerce transactions can be used to buy almost any commodity or service imaginable, including books, music, flight tickets, and financial services like stock investing and online banking. As a result, it is regarded as a highly disruptive technology.

Ecommerce is present in each of the four key market segments listed below. These are the following:

B2B (Business to Business): The direct sale of goods and services between businesses is known as B2B.

B2C (Business to customer): B2C refers to sales between companies and their customers.

C2C (Customer to customer): Individuals can sell to one another through a third-party site like eBay, which is known as C2C.

C2B (Customer to business): Individuals can sell to businesses through consumer to business, such as an artist selling or licencing their artwork for use by a firm.

Advantages of Ecommerce:

Consumers benefit from e-commerce for the following reasons:

• Feasible: E-commerce is convenient because it is available 24 hours a day, seven days a week.
• Increased product variety: Many stores carry a larger selection of things online than they do in their physical locations. Furthermore, many online-only companies may provide customers with special goods that is not available anywhere else.
• Cost reduction: One of the most important benefits of ecommerce to businesses is cost reduction, which keeps sellers interested in selling online. Many vendors have to pay a lot of money to keep their physical store running. They may be required to pay more up-front costs such as rent, repairs, store design, merchandise, and so on. Even after investing in services, inventory, maintenance, and a crew, many vendors do not achieve the required profitability and ROI.

What about return policy?

“Didn’t like the product… Don’t worry, you can easily return it till 7 days from delivery”. These catchy taglines we always see on almost every e-commerce website.

There are numerous things available on these sites. Fashion is one important sector of this e-commerce. There is around 51 percent growth in online shopping of apparel in 2021 compared to 2020. Customers can choose different Shirts, Jeans, shoes etc. from thousands of options. But when it comes to return any product, online shopping is always reliable compare to offline. Because they come to customer’s house to collect it. Whereas in offline, customer have to go to store for returning the product. Also, in many cases, shopkeeper denies to take the item bought by the customers.

What is return management?

Returns management is a e-commerce process that deals with customers who want to return a product after they’ve purchased it. Interfacing with customers, collecting returned items, and replenishing them as returned inventory are all part of the returns management process.

Reverse Logistics:

Reverse logistics is also one of the part of the return management. All procedures involving the reuse of products and materials are referred to as reverse logistics. All recycling, reclamation of raw materials, refurbishment, and remarketing of restocked items fall under this category. Reverse logistics refers to any process or management that occurs after a product has been sold. The customer would return the merchandise if it was defective. The manufacturing company would then have to arrange for the damaged product to be sent, tested, dismantled, repaired, recycled, or disposed of.

Managing the returns, on the other hand, remains a largely unaddressed concern. Many retailers regard high return rates as an unavoidable evil and believe that a generous return policy is required to increase their share of wallet. According to research, managing returns isn’t among a third of retailers’ top five priorities, and a quarter of those surveyed don’t do it efficiently or effectively. More importantly, merchants are more concerned with shipping and logistics costs than with improving return profitability.

Any latency in returns in a fashion-based business might result in severe markdowns for resold products. Returns from retailers often occur all at once at the conclusion of a season for brands that sell through wholesale and direct-to-consumer channels. Price matching and value erosion from competing retailers might result from lowering prices on the brand’s own direct-to-consumer site. The environmental impact is not insignificant, with an estimated 10% of all returns ending up in a landfill.

According to study respondents, poor fit or style was the reason of 70% of returns, implying that shopping tools are a crucial lever for preventing returns and increasing consumer experience. However, because retailers often prioritise and evaluate these based on conversion rate increases, solutions that could improve return rates are occasionally overlooked.

The majority of businesses questioned employ basic tools like customer evaluations, sizing advice, and high-resolution photos, and some are now experimenting with nudges that are designed to actively discourage returns. For example, when a customer adds numerous sizes of the same item to their cart, an online pop-up message appears.

Tricks used by online retailer

To give buyers a more realistic impression of how a product would fit them, some merchants have started providing product photographs or videos with models of various skin tones and body shapes. Furthermore, just a few retailers are fully incorporating previous and current consumer experiences into the purchasing and merchandising experience.

Return expenses are proportional to the volume of e-commerce sales. You might get a few return requests if you run a small firm. Large-scale business owners, on the other hand, may need to recruit additional workers, manage transportation costs for collecting up returned products, and acquire an additional warehouse for inspecting returned things in various parts.

Customer returns management is even more crucial for small enterprises, since mismanagement can result huge drop in profit margins. When it comes to the grounds for returns, several studies have found that roughly one fourth i.e. 25% of returns are requested due to poor quality or poor customer service.

Easy return policies improve the consumer’s confidence to make purchases, so returns can play an important part in customer retention. To achieve the best degree of customer satisfaction, merchants should keep their return policies up to date. However, it is important to keep in mind that the return process should be as simple as possible.

Sellers should retain complete transparency by providing a detailed description of the products, including colour variations, size, user reviews, and online ratings, so that new customers can make an informed purchasing decision. It will limit the number of requests for returns even further.

Is there any way to Reduce Returns?

Customers have an extensive number of options when it comes to fashion retail, which is a type of personal shopping. Most clients may want to acquire a sense of whether or not certain things will suit them before placing orders online, which is difficult to provide. However, eCommerce merchants are solving this problem by combining offline and online sales.

When it comes to online purchasing, customer satisfaction is crucial, especially in a highly competitive market. Retailers must provide detailed product information as well as a size guide for consumer’s convenience.

Furthermore, merchants might employ effective tactics to ensure that the product meets the expectations of the clients. To avoid return requests, they should also make sure that the buyer can obtain accurate size information and get the right fit items. Overall, the vendors must provide the best possible description of the goods.

Proper Description for better understanding of customer

Customers will have comprehensive awareness of what they are getting and will receive if there is a detailed description of the products, including even the smallest details. Instead of marketing the goods, the vendors should focus on describing it.

Most importantly, you should avoid making incorrect statements in order to reduce return requests significantly. The sellers should aim to be truthful about the fabric’s qualities, using adjectives like rough, thick, soft, or light/heavy to describe the level of comfort it will bring to the customer.

There can be a significant disparity between the clothing sizes indicated and the fittings. It’s difficult to offer clients a notion of fittings as an internet supplier. Customers don’t understand the quality of the fittings until they try them on. By mentioning the measurements of the model wearing the garment in the photos, sellers can make the process a little easier for customers to determine their exact size. This will assist buyers in determining which style is the finest.

Product images that are both appealing and informative are required. These close-ups allow customers to see the goods up close and get a feel for how the cloth feels. Buyers on the internet try to match the product to a fabric they’ve worn or felt before and were considering purchasing. This will inform them of the comfort level of the fabric used to create the garment.

Will it make any change?

The customer has the legal right to return an item. If a consumer is apprehensive about a purchase but understands they can return it without fuss or additional charges, they will be more likely to make the purchase.

Returns can also aid customer retention, and we all know that customer satisfaction is at the top of every eCommerce merchant’s priority list. Let’s not overlook the significance of lowering returns! The beauty of eCommerce is that there are a plethora of options for customising an online store, as well as a plethora of options for keeping returns on track and reducing their number.

Use of Data Analytics

Few merchants are leading initiatives to market low-return-rate products. Many companies, in general, are overlooking the chance to close the feedback loop by incorporating returns data throughout the whole product development life cycle. Only 6% of the stores we examined assign responsibility for returns to merchandising, and product development teams are virtually entirely absent. Returns data might be used all the way through the go-to-market process.

1) Plan of action: Returns data from prior seasons can be utilised to inform line architecture, for example, by evaluating category performance using the whole unit economics, which includes returns processing costs.

2) Research and development: Specific reasons for returns can be addressed by optimising the product line. “These sweaters were frequently returned due to pilling,” for example, “therefore let’s modify the blend.” To do this, many stores will need to train staff and improve their online return processes in order to collect more detailed information on the reasons for returns, which will go beyond “it doesn’t fit.”

3) Selection: Given the enormous impact of returns on an item’s overall profitability, it seems appropriate to consider return rates when recommending products and merchandise in general. Return rates on the home page and on carousels could be a crucial input towards the algorithmic and manual arrangement of products. Businesses can share data with colleagues in stores to help them avoid recommending products that have a high return rate. Clienteling tools, as previously mentioned, can be used to recommend products that are best matched to a customer’s size and style preferences based on their purchasing history.

In brief, retailers should focus on providing client experiences because this will persuade buyers to buy rather than return the product. Retailers can also enhance the return recovery value to turn their losses into profits by increasing the return recovery value. This return management has a unique position in customer retention because the quick return operations will encourage customers to place future orders with the same merchant. Overall, managing consumer returns and ensuring that they are completely satisfied is the key to success in the online market.

The financial burden of returns could become unsustainable for many clothing businesses in the fast-paced world of different methods of shopping or purchasing. However, if retailers can enhance their return management capabilities, they will be able to add value to their financial line, improve customer experiences, and lessen the environmental effect of fashion.