Online Returns are Growing Faster than E-Commerce Sales

Return Policy

We have been writing about return merchandise more and more throughout this year as the business of reverse logistics heats up to a record pace.

When 20% of your revenue is in a revolving door, forecasting can get pretty dicey. Add to that the overwhelming percentage of customers who expect easy, inexpensive return options, and it’s clear no business can overlook the power of reverse logistics.

Incidentally, if you like statistics, this article is going to be a fun read. The numbers on the subject are compelling, to say the least.

Breaking Returns Records

In the U.S. alone, Statista estimates return deliveries will cost $550 billion by 2020, an increase of more than 75% in four years. If that seems pretty bleak for the bottom line, let me point out that this figure does not include inventory loss or restocking fees.

The rate of returns is always higher during the winter holiday season. In 2019, UPS predicted an impressive number of returns even before Christmas Day even arrives… to the tune of 1.6 million per day. Merchandise is literally flying back and forth, changing hands constantly. For statistics fiends, this means there are more than 18 returns per second before the holidays are over.

January 2 is typically the biggest day for returns, forecast at nearly 2 million in 2019 (an increase of 26% in a single year). But online sales are only projected to increase by around 12% in 2019, which means returns are growing at twice the rate of online sales.

New Models

The current digi-centric commerce model relies on returns. According to Shopify, a full 90% of customers “highly value” free returns as a key factor in their buying decision. And nearly 70% avoid buying from companies that do not offer completely free returns.

Online sales returns are now averaging 20%, with 30% for holiday orders and even as high as 50% for “expensive items.” This is more than twice the rate of brick-and-mortar retails. Ironically, the physical storefronts often limit returns to re-saleable merchandise and simply put it back on the shelves.

Online Returns Are Another Species Entirely

Amazon encouraged a “no questions asked” returns policy, but has recently begun to address the overuse of the policy. Many of the returns cannot be resold and end up on liquidation sites. Small sellers on the giant platform may end up losing significant revenue if they cannot minimize returns, since they don’t always have the option to refuse and remain in good standing with Amazon. And with Fulfillment by Amazon sales, the decision is out of the seller’s hands entirely.

So what’s the bright side?

Benefits of Reverse Logistics

When handled correctly, reverse logistics can actually improve your bottom line as we described in our guest post at Storeya.

Planning for returns is actually quite similar to planning inventory requirements. If you address it ahead of time and have a strategy in place, there is nothing to fear. Although it’s hard to adjust the mind set, your business will benefit from letting go and embracing the inevitability of growing returns volume.

Get out ahead of the returns spiral by offering alternative programs. For instance, the Amazon wardrobe program allows customers to buy clothing with the intention of trying it on and only keeping what they like. It’s a perfect example of embracing the problem. This way, the business is prepared and can also charge accordingly.

Zappos is another company who made it a policy early on to accept returns, for free, all the time. And although they struggled operationally, the customer satisfaction rate was very high. They found that customers who returned the most also spent the most overall.

Reverse Logistics Strategies

Of course, the strategy will vary greatly depending on your business category. Apparel is the number one returned product category, with over 50% of these due to sizing issues. In this case, providing detailed sizing information up front can help cut down on the number of returns. And including accurate images from all angles, preferably with 3D viewing and human models helps too. Beyond that, designing a loyalty program around returns, similar to the examples above, mitigates the inventory loss and manages customer expectations.

For products that are easy to restock, such as DVDs and books, focus on the packaging and restocking needs and streamline the process so it makes a lesser impact. These items don’t expire and they rarely show wear, making it easier.

However, vitamin companies need to have a clear policy to avoid restocking expired (or close-to-expiring) products, which will only make a bad impression on the next customer to receive the item. This factor can impact the supply chain even earlier in the process, to manage inventory with longer shelf lives to allow for returns without gumming up the works.

Proactive Management

In some categories, it may make sense to build the cost of returns into product pricing. Since an average of 20% of merchandise will be returned, consider factoring this into the margins from the beginning. There are many elements to evaluate for improving reverse logistics flow.

Embracing the New Normal

The bottom line is returns are the new normal. How your business handles them can make all the difference between loss and gain.

When you are ready to explore options for fulfillment services, Medallion Fulfillment & Logistics and Sprocket Express are ready to step in and handle shipping and return processing.

How Fulfillment Service Impacts Customer Satisfaction

“If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That’s the “halo effect.” Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.” – Daniel Kahneman

When you work with a fulfillment partner, it is easy to oversimplify their involvement. True, a fulfillment house picks and ships orders. How could that hurt customer satisfaction?

Final Hands

Simply put, they are the last hands to touch your products and they are responsible for delivering the final product to your customers. To see where you stand, ask yourself a few questions:

• When your customer receives an order, how does it look?

• What packaging materials are used?

• How quickly does it arrive?

• How is the tracking information transmitted?

• How are returns handled?

If you have not audited the results in a while, it may be time to check your fulfillment results. Check our Guide for Fine Tuning Fulfillment for more tips and remember: A great fulfillment provider increases customer satisfaction, while a poor provider can actually damage satisfaction.

Case Study

One of our clients moved from a different 3PL because of customer dissatisfaction. The business started receiving complaints that orders were arriving in junky old boxes with newspaper used as packaging. Many orders were incorrectly shipped, leading to reshipments and delays.

If customers had not reported these issues, our client would not have known the impression their former 3PL was leaving on the customers. You have spent time and money making a good impression on customers. The last thing you need is a lousy box or a packing error to erode your credibility.

Errors Undermine Credibility

Mistakes not only cost money and time, but they damage customer trust. Medallion and Sprocket Express have a 99.9%+ accuracy rate and exceptional customer service personnel. In the case study above, errors and complaints stopped after the business switched to Sprocket Express for fulfillment for East Coast servicing. Customers almost never received incorrect items again, and the clean uniform packaging made a great impression on the recipients. The client added a packing tape printed with their logo, for a complete branded solution.

Speedy Delivery

When we first opened, our CEO used to joke that someday customers would hit the “buy” button and then check the mailbox. Ironically, we’ve nearly reached that point!

With Amazon leading the charge, customers continually have a higher expectation of speed (and shipping cost). To answer the call, most 3PLs expect to provide same day delivery within the next 5 years. And 40% say they anticipate 2 hour shipping by 2028. Interestingly, when Amazon offered 1- and 2-hour delivery in select markets, many customers preferred the free 2-day shipping instead. Speed is not everything, but shipping value is essential. The best shipping strategies offer a few options with a range of costs.

Knowledge is Satisfying

Immediately after placing an order, most website systems generate an order confirmation email. The more transparency a business provides during the order process, the more confident a customer can feel when interacting with the company. Therefore, as soon as an order is released to a carrier for shipment the tracking information should be communicated in real-time.

Both Sprocket Express and Medallion Fulfillment & Logistics sends automatic tracking information to your customer. And we can brand the email with your company information for a consistent image. We ship the same day and we also offer rush and special services.

We Are Here When You Need Help

These are just some of the ways that your fulfillment service partner can affect customer satisfaction. We strongly encourage you to call references when choosing a fulfillment provider and ask some of these questions. Your choice will be representing your business in public view, so it’s no easy decision.

Whichever partner you choose, we invite you to connect with us to share challenges and ideas via email or social media. To learn more about our services and our low industry pricing, see “What We Do”, or get a quote today.

How to Reach Customers Now During the COVID-19 Crisis

With shut downs, shipping delays, and customers sitting at home, there’s never been a better time to keep you name in front of anxious buyers using an e-newsletter.

The COVID-19 epidemic is of unprecedented proportion. Many people have never experienced a work stoppage or for that matter a quarantine. While customers wait for orders that may be delayed due to shipping issues or supply chain problems, email is the best way to soothe worries and keep customers loyal to your business.

Here are some tips to take to heart with how to communicate with customers during these unusual times.

1. Be honest of what is going on with your business. If there are delays due to supply chain issues – share the challenges in a positive manner.

2. Accept and acknowledge the uncertainty of the situation. Be real, people truly want to connect with you during this crisis.

3. Express gratitude and appreciation for orders and for those that will wait to receive their goods due to unforeseen delays.

4. Keep a regular connection with your client-base. Specifically, contact during this uncertain period should be several times a week or once or twice a month.

If you need help setting up an e-newsletter we have expert providers that are ready to set up an account at iContact for you, load your list, and even customize our own mobile-friendly reusable HTML e-newsletter template. Just let us know and we will put you in contact with one of our experts or get you started fast.

For Medallion Fulfillment & Logistics clients, our provider has created a special mobile-friendly template for newsletters that can be updated with your logo and content. Ask us for more information about this concierge-level e-newsletter program including setup, implementation, content creation, and scheduling. Pricing is customized based on your need.

http://medallionenterprises.com/newsletters/medallion-sample-template.html

For do-it-yourselfers, an iContact account provides access to easy to use templates. You can enter in your own e-newsletter information and set up your own e-newsletter issues to send on your own schedule.

Our team or our experts can work with you directly to assist with your needs. Just give us a call and let us know that you would like to reach out to your clients by email – fast!

Website Chatbots: What to Know to Embrace This Emerging Technology

In the United States, more than 50 percent of millennials and Gen Xers have interacted with chatbots, making these conversational programs one of today’s hottest eCommerce trends. But in reality, Siri’s and Alexa’s “parents,” Eliza and Parry, actually date back to the mid-60s and early 70s.

Simulated human conversation may not be new, but thanks to modern advancements in technology, these programs can now be integral parts of your marketing and branding strategies. Our fulfillment warehouse experts share what you need to know to successfully incorporate website chatbots in 2019.

Chatbots: Personalizing the Online Experience

Real-time interaction is a major advantage brick-and-mortar stores still have over virtual storefronts. Nearly one-third of online shoppers cite difficulty in getting answers to simple questions as their biggest frustration with eCommerce.

Chatbots are uniquely equipped to handle common customer service inquiries. Once you import your company’s FAQs, chat history and other relevant information, a chatbot uses the data to “train” itself. As the chatbot interacts with visitors to your website, the experiences serve to further refine its performance.

Need more reasons why you should be using chatbots?

• More than 50 percent of the participants in a Facebook survey said they’re more likely to shop with a business that provides chat services.

• Global research and advisory firm Gartner predicts that by 2020, 85 percent of engagement with eCommerce sites will be conducted via self-service options and chatbots.

• Surveys by Oracle, one of the leading multinational computer technology companies, indicate 80 percent of businesses currently use chatbots or are making plans to by 2020.

Value Add-On for Improving Productivity

Customer service is a natural application for chatbots, but their usefulness doesn’t end there. In addition to providing information, chatbots have the ability to gather data more fluidly than human agents.

• Chatbots can be programmed to ask targeted questions in order to qualify potential leads.

• Hard-to-navigate websites are another top source of frustration for online customers. Chatbots direct shoppers to the proper area of your website simply by asking what they’re looking for and posing other leading questions.

• Use of chatbots frees your staff to work on more urgent tasks, reducing operational costs while maximizing effectiveness. Chatbots are also available 24/7 without being subject to down time or attrition.

Chatbot Guidelines

1. No matter how sophisticated a chatbot program may be it’s meant to supplement human interaction, not replace it. Proper use of chatbots includes programming them to “know” when a customer should be directed to a human customer service agent.

2. While consistency is one of the advantages of chatbots, the programs are not one-size-fits-all. Chatbots are designed to be fit the needs of a specific industry, so a chatbot used by a healthcare organization will not be the same one you would want for your eCommerce business.

3. Start simple. Create a chatbot to handle basic customer requests that form the bulk of your customers’ interactions. Once the chatbot has been operational for a while, review the chat logs to detect patterns and trends, and then decide if you want to add further refinements or develop new chatbots to handle other tasks.

4. Don’t reinvent the wheel. Think of chatbots as a way to streamline basic business interactions, not add complicated and unnecessary bells and whistles.

Personalized Fulfillment Warehouse Services for a High-Tech World

Are you tired of fulfillment warehouse companies that treat you like nothing more than a number? At Medallion Fulfillment & Logistics, we consider ourselves a partner in your success, so your specific needs are our first priority.

Contact us to learn more about our cost-effective, flexible and scalable fulfillment warehouse services.

Three Reasons to Find a New Fulfillment Partner After the Holidays

How did your business do this holiday season? Hopefully it was prosperous and efficient, but maybe it could have been better. The busiest time of year can be illuminating and leaves some businesses shopping for a new fulfillment partner.

If you were feeling a little overwhelmed through the holidays, take heart – the New Year is here. It’s time to review performance and improve your operations.

Inhouse to Outhouse

You’ve been shipping your own orders and now it’s time for a change. The holiday season was hectic and it would be more efficient to have a fulfillment partner. Just think – next year you could concentrate on your customers and promotions while someone you trust handles your merchandise accurately, quickly, worry-free.

How Medallion Fulfillment & Logistics and Sprocket Express Can Help: When you decide to outsource fulfillment, there are a lot of details to consider. We are great at helping a small business outsource smoothly.

Gotta Get Outta Here

You care about your customers deeply. When they want something, you want to accommodate them so they stay happy. But not every fulfillment business is capable of delivering accurate and trustworthy service in keeping with the image you want to portray. The last hands on your product is the warehouse and you don’t want any complaint about shipping packaging or accuracy. You can avoid bad reviews with a reliable fulfillment partner.

Mistakes not only cost money and time, but they damage customer trust. Medallion and Sprocket Express have a 99.99%+ accuracy rate and exceptional customer service personnel. Plus, our fees are among the lowest in the industry. Learn more about our fulfillment services.

Becoming a Free Agent

Some fulfillment companies require contracts with their clients. When the contract period ends, it’s time to evaluate your options. Not every 3PL is a good fit for every client and it’s ok to shop around. If you are considering switching to a new fulfillment provider, take a look at our tips for a successful transition.

Our award winning service requires no contract and we have excellent references. Our accuracy is documented at over 99.9%. Tell us more about your fulfillment wish list and let’s talk about how we can partner to help you succeed!

California and Massachusetts Fulfillment Services that Exceed Customer Expectations

Medallion Fulfillment & Logistics and Sprocket Express provide a comprehensive set of eCommerce services that scale to meet your specific needs. Contact us to learn more about why we should be your first choice in cost-effective and efficient California and Massachusetts fulfillment services.