Reducing the Return Rate in e-Commerce

Recently SupplyChainBrain examined the rapid growth rate of international e-commerce, and the many challenges associated with it; such as currency, delivery times, customs, and returns. As a result, logistics providers such as FedEx, UPS, and Pitney Bowes have acquired niche players to expand their international e-commerce capabilities. Combined with these niche players, logistics providers are utilizing global gateways to reduce costs and delivery times.

Forrester reported that global cross-border B2C e-commerce will more than double over the next five years to reach $424bn by 2021. In the United States this varies from provider to provider. One example of a potentially upcoming powerhouse for cross-border e-commerce is Wilmington, OH. This is due to being the location for Atlas Air and Air Transport Services Group, both of whom have leased airplanes to Amazon.

Despite this growth, return issues are likely to persist into 2020 and beyond. Still a headache for domestic e-commerce, cross-border returns will take creativity to solve. The need to implement best practices learned by connecting cross-border e-commerce among developed countries, as well as develop local partnerships for warehousing and final mile delivery, must be addressed. 

Returns from across the street or across the world are a significant challenge for smaller e-commerce vendors. Michael Lazar, reported in the Huffington Post that many online retailers are still overlooking their return policy. The failure to integrate an efficient and hassle-free return policy could have a serious backlash on present and future sales. Lazar warns that with the holiday shopping rush just around the corner, e-retailers need to make the return process as easy as the purchasing process. Wise retailers to the likes of Amazon, and its subsidiary shoe store, Zappos, as well as premier retailers like Nordstrom’s, have heeded the call.

About one-third of all e-commerce orders are returned.
The Wall Street Journal reported one-third of all internet transactions resulted in a return by consumers. Forrester reported 65% of all -commerce returns are the retailer’s fault:

23% of returns are due to the wrong item being shipped.

22% of returns are due to the difference in product appearance.

20% of returns are due to a damaged item being received

The National Retail Federation predicts continued double digit growth for the 2017 holiday season; a total that may exceed $130 billion, prognosticates Internet Retailer. Worldwide these sales will exceed $4 trillion by 2020 and reducing the return rate through accurate picking, packing, and shipping the first time is essential to maintaining profitable operations. The cost of reduced consumer loyalty and preserving long term retention is critical in the e-commerce space.

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