• The Coronavirus crisis will lead to significant changes in what customers accept as ‘standard’
  • Quarantining of goods may be added to the returns process
  • Reseting the returns process to become fee based is the opportunity retailers may embrace

 

A famous leader once said:

never waste a good crisis (Winston Churchill)

he was right. Too often retailers are guilty of not challenging the norm, particularly when things are working well. Instead, satisfied with best or good practice approaches they follow standards and tradition. However, in times of crisis, there seems more to latitude for pivoting or reseting. One of the very few positives about Coronavirus comes from the enforced changes to our daily lives that may inadvertently lead to a reset in customer perceptions about normal service offerings. Coronavirus has provided the catalyst for a raft of change opportunities, changes which in yesterday’s normal would never have been tolerated.

The operational expense of handling and processing returns has always been a pain point for retailers. Charging for returns is something most retailers would like to do, but haven’t dared to implement in the past, as they fear customers will be put off from shopping. The new normal post Corona offers a reset opportunity, where the introduction of a fee system for returns would more likely to be accepted by customers. This doesn’t need to be a binary ‘we charge or we don’t charge’ approach, but can be nuanced and based on the measures such as a customer’s LTV, loyalty, their true profitability or the importance and current value of items being returned.

In all sectors, but particularly fashion, it may become standard for any returned items to go through some sort of quarantine, potentially lasting a week or more to prevent the possible spread of Coronavirus.

As Andy Halliwell (Senior Director – Retail Strategy) at our partner Publicis Sapient says

‘Products which have been tried on and then returned will become a much bigger problem in apparel, so efficient reverse logistics and clear mechanisms for returns need to be created now so products can be cleaned and sanitised efficiently, en-masse.’

This new effort will inevitably mean returns processing periods will increase far beyond the pre-Coronavirus times and refunds or exchanges will consequently be much slower to complete unless there is some sort of intervention. Easycom’s analysis and insight tools allow retailers to offer fast track returns processing and a refund service which circumnavigates some of the constraints of Coronavirus.

It is already to possible with easycom to have a view of inbound items before they complete their shipping to the DC or store where they are needed. With not much effort the 3PLs or carriers bringing the items back could feasibly aggregate certain items and slow ship them thereby running an effective quarantine process whilst in transit. (A further benefit here could be in the cost of shipping but that’s another blog). Moreover, high value items or items which are in short supply could be express return and fast tracked through cleaning and repacking/replenishment. Again, easycom’s smart returns platform can designate this treatment when the customer starts the returns process.

Whilst the two scenarios listed above are ‘behind the scenes’ changes in the retail operation, the real challenge will be the presentation of a fee-based return system for customers. The messaging from brands explaining their new framework to customers where there are 2 or 3 return options will be tricky, but customers are likely to be the most sympathetic to change now whilst we are still in a state of flux over Coronavirus.

Establishing a new normal now roughly based on these three distinct options could yield tremendous dividends:

  • express returns – the most expensive option, potentially with instant refunds or free for VIP customers
  • standard returns – paid for but markedly cheaper than express – the new normal
  • slow returns – probably free and with refunds weeks after starting the return process

Peter Hietala, easycom CEO, was recently asked what he thought retailers could do to prepare for the new normal of post Coronavirus:

‘being ahead of the curve is almost always a winning strategy in business… what we try to enable at easycom is a viewpoint for retailers to assess the curve as early as possible and be in a position define the new normal’