The process of returns in retail can be a bit of a sore subject for some – largely to due to associated costs and the difficulty in deciding the most efficient and suitable way of handling them across sales channels. This is especially true as the retail world develops, customers want an easy and convenient shopping experience and retailers are striving to provide that with omni-channel strategies.

In fact, a recent study by PWC found that the high cost of fulfilling orders hits profitability for 84% of retailers, with some 71% pointing to the cost of handling returns from online and store orders.

So what are these hidden costs and how can retailers address them? Firstly it’s the cost of shipping items back and forth, especially if a retailer offers free returns and only allows items to be returned to the sales channel they were purchased from. Then there’s the potential cost relating to how long it takes for that returned item to be put back on sale – the longer it is out of stock online or not back out on the sales floor, the more chance there is that the item will need to be discounted to help move in new stock.

The first step to minimising costs is allowing items to be returned via any channel whether it’s online or in store. To do this, it is paramount that a retailers’ systems for their stores, ecommerce and supply chain talk to each other – with one single, real-time database of orders and sales, shop assistants can easily find a online sale on the system in-store and vice versa. It provides customers with a consistent and convenient service, and encourages them to return the item as soon as possible.

This in turn helps the retailer to get the products back on sale quicker. Giving online customers the option to return in store means returned items can be checked in and put back on sale straight away, rather than waiting for the customer to return them via post, checking them back into the warehouse and then adding them back to the stock poll. However, when they are returned online, there needs to be a clear and efficient process of getting them back online, which again is where having an integrated retail system and supply chain comes into play.

Getting fulfilment right is a large part of becoming omni-channel and many retailers struggle with it, for instance Marks and Spencers’ distribution troubles around Black Friday last year. Those that really struggle are the ones running disparate systems, as this hinders real time data and transparency throughout an organisation and can mean that returns are back logged during peak times. Having a full view of the business enables retailers to see where the hidden costs are and helps them make quicker, better decisions to tackle issues such as returns.

What other issues do you find with returns? Let us know on our Facebook page or tweet us @cybertill.

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