2020-12-03

Managing eCommerce returns during the COVID pandemic

 

The COVID pandemic has strangely held unprecedented implications on eCommerce. To this end, stores with an online presence have performed better compared to their peers that are limited to a physical location. Based on a report made by Adobe, it could have at least taken 4 to 6 years to get to the levels of growth eCommerce witnessed as of May 2020. The surge in sales that was experienced as a result of COVID-19 is only observed during the holiday season. Adobe suggests that the BOPIS (buy online, pick up in-store) and high online purchasing trends may be the new norm even after the pandemic.

 

“While BOPIS was a niche delivery option pre-pandemic, it is fast becoming the delivery method of choice as consumers become more familiar with the ease, convenience and experience.”
– Taylor Schreiner, Director, Adobe Digital Insights

 

The Index analyzed over one trillion online transactions across 100 million product stock-keeping units.

 

The impact of COVID-19 on product returns

Inevitably, online product returns have been affected as a result of the pandemic. A report by DHL showed that during the mandated lockdowns, on average, returns had decreased by up to 20% in terms of weekly return volumes. Among the contributing factors were consumers avoiding additional stress during an already difficult period and governments advising people to stay at home with only essential services allowed to operate.

Compared to other nations in Europe and the West, Sweden took a more liberal approach in tackling the COVID pandemic. Schools, restaurants, and stores remained open although authorities continued to encourage people to maintain social distancing, work from home and avoid traveling if possible. Retailers were allowed to continue running their businesses as usual.

As of March 2020, apparel sales in Sweden had fallen by 39% in comparison to the sales made in the previous year. Overall, business activity slowed down as consumers remained wary of the new conditions. Post-March, apparel sales fell further by 57%. In comparison to brick-and-mortar stores, online stores performed better. However, trends showed that more and more people choose to keep their money rather than spend it.

Swedish eCommerce businesses became flexible in terms of delivery and returns. Some companies increased their delivery options while others opted to offer longer delivery times.

 

Challenges facing Online Retailers

?    High expectations from clients for free returns

?    The time-consuming act of categorizing items and returning them to their specific shelves and floors

?    Trying to resell returned merchandise is a challenge since there are retailers whose sales have already dipped during the pandemic

?    Finding enough workers to process returns is also a major problem considering some retailers have furloughed their store and warehouse workers remaining only with the necessary staff

?    The fear and uncertainty of what to do with all the returned merchandise once the pandemic passes

?    Reselling items that other customers have handled considering the virus can last on surfaces for days

 

Managing eCommerce Returns

Retail experts have mentioned that the COVID pandemic will accelerate a shift from physical stores towards eCommerce. Due to the inherent limitations of shopping online, it will result in higher returns. Online shoppers often purchase multiple items in terms of size and color with the intention of selecting their favorite and returning the rest. Towards this end, retailers ought to be careful while managing shoppers and aim to provide a cost-effective solution.

 

1. Decline returns on certain items

In response to the pandemic, some consumers went ahead and hoarded various items e.g., household goods, food and beverage, cleaning items and baby products. We recommend that you decline such items based on sanitary measures and to further discourage people from hoarding. Remember that when hoarding, people take advantage of the return policy and will return the items once they realize there’s no imminent danger.

 

2. Extend the window period of returns

Once things return to normal post COVID, expect high returns. Due to the restrictions on social distancing and the measures put in place, we recommended that you extend the return window. Ensuring returns are transparent and stress-free will guarantee efficiency.

One interesting fact that we have observed in our Reclaimit system is that consumers return items often after 3 to 10 days meaning that you can open up the return window to also act as a marketing strategy.

 

3. Give priority to seniors and those with compromised immune system

Help those who are vulnerable to COVID-19 and protect them from crowds to prevent them from being infected. Perhaps, have different time slots for customers to drop in so that seniors have a chance to also shop. In terms of restocked assortments, give seniors a priority.

 

4. Steam cleaning

Set aside time to steam clean returned items to reduce COVID-19 transmissions.

 

Building Resiliency Post-COVID

The COVID-19 pandemic has made it difficult to predict the future of eCommerce. There’s no doubt that to date, it has fundamentally changed eCommerce operations that will be felt even after the pandemic has ended. To thrive post-COVID, eCommerce companies have to rethink their supply chains while adapting to the new needs and expectations of customers.

Here are some of the ways you can future-proof your ecommerce business from future pandemics;

 

1. Digitize all your records

How can digitizing your records ensure resiliency in the face of pandemics like COVID-19? Digitizing records makes it easy to manage your supply chains. Apart from reducing human error, digitizing records streamlines processes. An additional benefit for digitizing is that you can leverage on technology and perform other functions e.g. performing supply chain audits. Examples of records that you can digitize include receipts, invoices, legal forms and documents, letters from customers and vendors, and HR documents.

 

2. Data-Driven Analytics

Data-driven analytics relies on real data which minimizes the chances of making faulty assumptions.  Having data relevant to your market in eCommerce makes it possible for you to make actionable predictions. These insights can only be achieved using data-driven analytics.

Understanding customer behavior in eCommerce enables you to meet their needs especially during macroeconomic downturns such as COVID-19. Tracking your data will for example reveal to you how your customers react to macroeconomic trends. Isolating variables such as economic output, unemployment, inflation, and the disposable income of your target audience will make you prepare for storms such as COVID-19 much more effectively. From this end, you can then make key decisions on what to focus on to ensure sustainability or growth of your business.

 

3. Create an accurate map of your supply chain

If COVID-19 has taught has anything, it’s the vulnerability of modern supply chains. Besides, an opportunity has been presented to rethink supply chains. Use the existing knowledge to create a comprehensive supply chain map. Identify all supplier locations and the links to logistics and transportation. Also, identify threats that face these transportation links. Finally, identify vulnerabilities your supply chain is facing e.g. energy problems, storms, riots, strikes, etc.

 

Final Thoughts

COVID-19 affected eCommerce stores all around the world. Despite the losses and uncertainties caused, there have been various positives including accelerating eCommerce to new heights. There is a need for eCommerce to adopt new methods to future proof their entities from any future macroeconomic downturns such as COVID.

 

Reclaimit offers various solutions for eCommerce platforms. Talk to us today and let us help you adapt to the eCommerce world post-COVID.

 

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