Sep 15 2020

New ways in the fight against returns

Returns are a problem in online retailing - but now there are some creative ways to reduce the number of returns. This is also interesting for the furniture trade.

No, we do not like that! And the ordered product will be sent back. Returns are a tiresome topic in online retailing: According to estimates, every sixth product ordered over the Internet in Germany is returned to the sender.

This is not only a financial and logistical challenge for companies, but also has an impact on the volume of traffic and thus on climate protection. After all, around 280 million parcels are returned every year. It is estimated that around 240,000 tonnes of CO2 are emitted annually in Germany because of these shipments.  

What can be done?  

For retailers, it is an eternal balancing act between customer satisfaction and costs, between image cultivation and sober calculation. However, in view of the rapidly growing demand in e-commerce, there is no way around companies looking closely at new solutions for handling returns. 

In addition, the legal situation (distance selling law) gives customers in Germany comparatively much leeway. The furniture trade is also being challenged, although the returns rate here is significantly lower than in other sectors and, according to industry insiders, is less than ten percent.

In the furniture industry, the fact that returns are often more complicated - apart from smaller products, a return involves more effort than for a book or a cosmetic product. After all, you cannot send the living room cupboard as a parcel.  

In addition, many furniture retailers have already developed strategies to discourage unsatisfied customers from returning their products, for example by offering discounts. The furniture industry also shows how important detailed information about the product is: 3D images, fabric samples and virtual placement of furniture in the desired space reduce the risk that customers will not like what they buy later. The furniture industry, for example, could well take this as a model, even if trying on clothes at home is difficult to replace.

In the furniture industry too, handling returns requires an immense amount of logistics effort. © Pixabay

Strategies against returns sought 

Across all industries, online retailers are currently looking for new ideas to combat frequent returns. One possibility is to point out that returns are not exactly environmentally friendly, for example in the form of so-called CO2 accounts; the use of vouchers can also be a possibility.

Incidentally, a survey conducted by the German E-Commerce Association and Darmstadt University of Applied Sciences shows that a majority of German customers are in favour of measures against those consumers who return goods too often.  

An interesting approach is taken by the German start-up keepist, which has set itself the task of reducing returns. The model has two stages: On the one hand, there is a system whereby customers are rewarded if they keep the goods they ordered.

"This increases both customer satisfaction and loyalty to the shop - and satisfied customers buy again and loyal customers buy more consciously", explains keepist founder Daniel Engelhardt in an interview with ambista.  

On the other hand, artificial intelligence is used to analyse the order and return data of the shops in order to define the reasons for increased returns. "This enables us to recognise whether a product is returned particularly frequently because it is not liked, which in turn indicates problems in product presentation or product quality", says Engelhardt. Concrete recommendations for action could be derived from this.  

The system can be integrated into an online shop in a short time; currently keepist's customers come from the fashion industry, but the solution is not industry-specific. "It can be used in any industry where physical goods can be purchased and returned online.

But it is not about persuading customers to keep something they don't like or don't like. "The aim is to make customers think more about what they really want and need before they order, rather than indiscriminately filling their shopping basket."

The handling of returns is a very delicate matter for online portals. © Unsplash

Environmental awareness counts 

It is a fact that returns will continue to be unavoidable in e-commerce in the future; rather, creative approaches are needed to keep the rate low. Will consumer attitudes towards returns change in the long term? Daniel Engelhardt does not want to answer this question with a clear yes or no.

"Some consumers have indeed already changed their mindset and are ordering much more consciously and sustainably than just a few years ago. The number of these customers will certainly continue to increase as sustainability and environmental awareness become more important. In any case, he wants his company to have a positive influence on consumer behaviour, emphasises Engelhardt.

Author: Robert Prazak

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