What:  A contribution on how to minimize the return rate online and maximize instore returns.

Why it is important: It is all about using tech as a tool, to dynamically incentivize and disincentivize specific behaviors, while at the same time contributing to the organization efficiency, profitability and sustainability.

The Covid-19 pandemic has changed customers’ behavior, and they are now much more prone to ordering online… but this also increases return rates: in 2021, the NRF calculated that the return rate averaged 16,6% of total sales, going up to 20,8% for online businesses – this represents a total cost of $218 bn in goods only.

The lost revenue obviously adds to the cost of shipping, restocking, and this situation is a call for action for retailers:

• Should all items be available for delivery, or some of them should be only available for pick-up in store? Studies show that there are significant discrepancies in terms of return rates according to the category,
• Should some items be charging more to be shipped, either to make sure they are shipped with the needed extra packaging if we are talking about fragile items, or, in certain cases, to discourage customers (for instance, to discourage the purchase of multiple sizes of shoes to keep only the one that fits)?

The contributor reminds that instore returns do favor interaction and potentially new purchases, which is why they should be favored: 15% of shoppers made an additional purchase when completing an in-store return for products purchased online, and 19% made an additional purchase while coming to pick-up a product bought online.

According to the Robin Report, the focus should be on the right usage of data to encourage profitable behavior (by  proposing for instance incentives to pick-up in stores with additional discounts or commitment on the time of availability of the products), or incentivizing the return of products bought online, in stores.

Will BOPIS and BORIS replace delivery?