“According to the IMRG’s 2020 benchmarking data, the average eCommerce business saw a 15% return rate.”
Returns are an inevitable part of eCommerce, but they can be costly for retailers. The UK market has seen a surge in online shopping and the COVID-19 pandemic certainly accelerated the shift towards buying online. In 2020, online retail sales in the UK grew by 36.6% year on year, reaching £98.2 billion (source: Office for National Statistics).
According to a report by eMarketer, UK eCommerce sales are expected to reach £177.03 billion in 2023, which would represent a growth of 20.7% compared to the estimated sales in 2021.
With this increase in sales, there has also been a rise in eCommerce returns. A study by Barclaycard stated that UK retailers lose £60 billion annually due to returns.
There are ways to reduce the number of returns and save costs. Fortunately, the right technology can help reduce the number of returns, reduce costs, free up cash flow and improve customer satisfaction.
Adopting the right order management and warehouse management software is considered a critical success factor for companies engaging in Multi-Channel retail.
Here are five tips on using software to minimise eCommerce returns and boost your bottom line…
Streamline order management with order management software (OMS)
An order management system can dramatically reduce a company’s returns by automating the process and moving away from paper base or spreadsheet systems, which are prone to errors. Implementing this software ensures the correct items are picked, packed & dispatched, reducing the likelihood of customer returns due to receiving incorrect items from human error.
With real-time updates provided by an OMS, customers can track their order status and delivery time – this information can reduce returns according to a report by Accenture – 47% of UK shoppers said that poor communication during the delivery process was a reason for returning an item.
Improve pick accuracy with barcode scanning
By using barcode scanning, retailers can ensure that the right product is picked from the warehouse. This reduces the likelihood of shipping the wrong product or quantity to the customer – a common cause of returns.
According to a survey by Zebra Technologies, barcode scanning can reduce picking errors by up to 60%, which can lead to a decrease in returns.
Improve pack accuracy with barcode scanning
By scanning each product as it is packed, retailers can ensure that the right products are included in each shipment. This reduces missing items or shipping incorrect products, which can ultimately lead to returns.
According to a recent report by IMRG, 60% of UK retailers now use barcode scanning technology in their warehouses – an increase from just 30% in 2017. The report also found that retailers who use barcode scanning technology have a 50% lower return rate than those who don’t.
Using a barcode scanning system reduces pick and pack errors to less than 1%!
Improve your product information management
One of the main reasons for high rates of returns is inadequate product information on websites product descriptions. Customers need to know exactly what they’re buying, as if they’re unsure, they’re more likely to return the item. By improving your product information management, you can provide customers with detailed descriptions, high-quality images, and accurate sizing and fit information. This will help reduce the number of returns due to incorrect or incomplete product information.
According to a survey by Red Stag Fulfilment, 22% of returns are due to the product not matching the description.
Real-time analytics and reporting
Real-time analytics can help eCommerce retailers track their inventory levels and identify which products are selling well and which are not. Data can be shared between departments as to the reasons why products have been sent back resulting in better purchasing/buying decisions. Data exchanged between departments can highlight, for example, poor quality products and the returning frequency of other products. This all feedbacks and enables a company to have a better understanding of the buying patterns of its customers. Informed decisions can then be made when it comes to stocking the right products.
As the eCommerce market continues to grow, retailers must adopt the latest technologies and solutions to stay ahead of the competition and multichannel eCommerce software is an excellent place to start.
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Author: Iain Coplans CEO Stok.ly