Is a profitable holiday season possible for retailers?

Returns are inevitable, but retailers must be as transparent as possible to prepare for the holiday shopping season.
Elizabeth Christenson
Editor, Retail Leader
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holiday returns

Returns are costly for retailers and come January, consumers will be expected to return billions of dollars of merchandise. To maximize holiday sales, a returns strategy is crucial for retailers to consider now as they gear up for the season – and a staggering 92% of consumers are influenced by brands’ return policies, according to research from ParcelLab. Additionally, 62% will not return to a retailer after a challenging or inadequate returns experience. 

“Holiday spending is often the initial action for retailers to gain new customers,” Tobias Buxhoidt, ParcelLab’s CEO and founder, told Retail Leader. “Even if holiday gifting doesn’t go as planned, ensuring your brand has an efficient returns management strategy to process returns smoothly can build a lifelong customer.” 

Customers also are increasingly expecting retailers to provide a range of options for returns. 

“Preparing ahead of time with self-service returns and parcel drop-off options will allow customers to feel at ease during a potentially chaotic shopping season,” Buxhoidt said. “A successful returns strategy unites the logistics of effective returns processing with tailored experiences that delight customers to further engage with a brand.”

Tracking returns with retail tech

Still, retailers are at various stages of evaluating and enhancing their operations to track returns. In turn, it becomes important for retailers to understand how customers are engaging with brands from initial browsing to returns.

unhappy with gift

“Retailers who engage their customers with tailored post-purchase communications are able to assess brand satisfaction, decrease where is my return (WISMR) inquiries, and encourage repeat customers,” Buxhoidt said. “Retailers can use customer feedback from returns processing to streamline the process and ensure refunds are processed in a timely manner.” 

Retail tech tools allow retailers to track the most pressing delays and delivery exceptions to find where they can streamline logistics processes. Especially as retail continues to globalize, having a full understanding of logistics and last mile partners allows retailers to proactively engage with customers at various touchpoints, offer more options to return products, and increase website traffic. 

“Obtaining true visibility into the returns process, from the customer's hands to the processing center, is the key to enhancing operations,” Buxhoidt said.

Retail tech also makes returns more sustainable and minimizes overhead costs by decreasing inbound WISMR inquiries through proactive communication about potential issues. 

Dedicated returns portals also can empower customers with the tools they need to manage returns themselves – including providing delivery estimates and return labels – and allows retailers to gain data-driven insights into returned products. 

“A centralized returns platform allows retailers to forecast return volumes and reduce processing time,” Buxhoidt said. “By already understanding the reason for the returned product, retailers can streamline the time it takes to get a product from returns processing to the shelves. Every second saved cuts down on restocking times. As we consider the current demands the retail sector has placed on the environment, ensuring that customers can access current product offerings decreases inventory overhang and the waste it produces.

Additionally, retail tech provides retailers with the tools to meet customers where they are at. 

“This looks like proactive and tailored communications that give customers full transparency into the status of their orders,” Buxhoidt explained. “This is especially crucial as the holiday season approaches and supply chain delays begin to impact customers. Open communications from a brand keeps customers satisfied and are an opportunity to reduce operating costs by minimizing where is my order and WIMSR requests.”

One of the best strategies to minimize returns and improve customer experience is to provide customers with the tools they need to make better buying decisions. 

“Retailers must improve their product descriptions, imagery and sizing charts to empower customers to find what they are looking for,” Buxhoidt said. “It is also important to include your brand’s return policy at checkout to avoid customers getting stuck with unwanted merchandise. Returns are inevitable, but retailers must be as transparent as possible to prepare for the holiday shopping season.”

Offering customers customized resources to navigate the post-purchase experience can decrease customer service costs and reduce returns. Additionally, brands can benefit from further establishing brand differentiation and voice in an increasingly crowded marketplace. 

“Retailers deploying personalized post-purchase communications can expect to see increased traffic conversion, repeat purchases and less abandoned carts,” Buxhoidt said. “Retailers increasingly have more tech partners at their disposal, and upgrading the post-purchase customer experience is key to ensuring growth for years to come.