Logistics Are free returns the key to online trade?
Without a 100% focus on customers, traders have a difficult time of it these days. Opinions are sharply divided on the topic of free returns. Customers want to return goods free of charge. This idea is not at all popular with traders, even though free returns are a good opportunity to attract new customers.
“Customer centricity” is one of the key buzzwords relating to changes in trade. All recent studies have explored this total focus on customer wishes. Only in one place do traders seem unwilling to consistently implement this approach. The majority of customers would welcome the option to return goods free of charge. However, only 25 percent of online traders in Switzerland offer this service. Is it a question of costs?
Discussions with controlling departments on the subject of free returns are difficult. And even with precise calculations, there are still numerous obstacles to reaching a consensus. It is obvious that both revenue and logistics costs will increase. Only too rarely is an undesirable side effect considered. With free returns, the average net shopping basket size comes under pressure. Logistics costs per franc spent increase. It’s no wonder, then, that controllers continue to have reservations on this topic.
Aside from these calculations, I think that new customer acquisition remains the main reason for introducing free returns. This is because the online shop of a trader with an omnichannel strategy is generally the sales channel with the most new customers. Accordingly, free returns result in new customer data.
Thanks to new distribution channels, marketing activities can be targeted more effectively, traditional mailshots are reduced to a minimum and the economic viability of the marketing approach is enhanced. Retailers ultimately need to ask themselves how much a new customer is worth. If new customer acquisition is the most important reason for introducing free returns, then there is a strong argument for transferring the associated costs, at least in part, to the marketing unit.
The core issue underpinning this is: are free returns the key to online trade? From the customer’s point of view, the answer is a resounding “yes”, as 77% of customers want to be able to return goods free of charge. This is the third most common wish of customers after appropriate payment methods and free shipment of goods ordered. In light of this, the introduction of free returns makes sense if you know how much a new customer can cost.
The conclusion I draw from this discussion is that omnichannel traders must have all the data in hand. Harmonizing this data forms the basis for introducing services such as free returns. It is only by having data know-how that traders can monetize newly acquired customer data. As all future services will be dependent on data, the future viability of any trader who does not address the issue of data harmonization will be uncertain.
Data harmonization has a positive impact on cost structures. It means that more financial resources are available to offer customers the desired services and to take a direct step towards the end customer.
((commentsAmount)) Comments