Narvar's 2024 State of Returns report is here—get your copy now!
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Narvar's 2024 State of Returns report is here—get your copy now!
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For many retailers, product returns are a major headache: 39% of consumers return an item bought online at least once a month. Last year, the amount of merchandise returned in the U.S. amounted to nearly $744 billion.
Savvy retailers are optimizing their returns management process in order to retain revenue from a returned order, streamline costs of shipping and handling returns, and provide a great experience that keeps customers coming back for more.
Here are five key trends in product returns that high-volume retailers are leveraging to increase the efficiency, effectiveness, and experience of their returns program.
Returns consolidation involves collecting returned items at local drop-off points, such as Kohl's or FedEx locations, and then transporting them to their final destination in bulk. This method not only simplifies the returns process for customers but also significantly cuts down on shipping costs.
A prime example of this trend is Narvar's Return Drop @ Kohl’s. Narvar has expanded its Concierge network to include over 1,100 Kohl’s stores across the U.S. This partnership enables consumers to drop off returns for participating brands at Kohl’s locations, leveraging the store’s extensive national network. Retailers benefit from reduced overhead costs and operational efficiencies, achieving up to 90% savings on standard return shipping rates. The Return Drop @ Kohl’s ensures that returned products are delivered in a timely manner, typically within 5-24 days, all while keeping costs low. This consolidation strategy not only helps retailers hit their profitability targets but also enhances pricing and margin efficiency.
Another exciting innovation is the ability to generate multiple shipping labels for a single order return. This process starts with Narvar’s intelligent routing capabilities to determine the best destination for each item in a return request. Then, Narvar automatically creates the appropriate shipping label for each destination selected.
Multi-label generation can streamline the returns process by ensuring that each item is routed efficiently according to its specific needs. For example, items that require refurbishment might be sent to a different location compared to items that are restocked in a local storefront. The result? Faster return-to-stock times and more sustainable and efficient transportation, since items are not taking multiple trips to reach its final destination.
Narvar’s intelligent routing coupled with multi-label generation also unlocks Return to Vendor (RTV) capabilities, allowing retailers to send returned items from the consumer’s door back to the vendor warehouse directly rather than be routed through multiple retailer-owned facilities first.
This helps both the retailer and the vendor reduce their overall return shipping and operations costs. Plus, it allows the vendor to restock the returned product faster, increasing the likelihood of a full-price, in-season sale. For instance, a major department store has recently saved $18 per item returned by utilizing this method.
This trend is particularly beneficial for retailers dealing with high volumes of returns or those with complex supply chains.
Visual Proof of Delivery (VPOD) confirmations enhance transparency and reduce fraud risk in the outbound shipping process, because some carriers will now take photos of packages upon delivery, which can be integrated with the tracking pages powered by Narvar.
This innovation allows consumers to see visual proof of their packages on their doorstep or in their mail room, providing a clear record of delivery.
VPOD helps mitigate issues related to delivery disputes and fraud—where 31% of consumers admitted to lying about an online purchase not being delivered to secure a refund. By providing visual confirmation of delivery, retailers can reduce the risk of fraudulent claims and improve overall trust in their post-purchase process.
Given the overall cost of a returns program, personalization is becoming increasingly important in providing an exceptional experience for VIP customers without breaking the bank. Retailers are leveraging loyalty programs to offer tailored return options to their most valued customers. By analyzing purchasing behavior and return history, retailers can provide personalized return experiences that cater to the preferences of their best customers.
For example, top-tier loyalty program members might receive expedited returns processing, free return shipping, or other premium return services. This personalized approach not only enhances customer satisfaction but also encourages repeat business and strengthens customer loyalty. By prioritizing the needs of their best customers, retailers can build stronger relationships and foster long-term brand loyalty.
As we move through 2024, the landscape of product returns is being reshaped by these emerging trends. Retailers and logistics providers who embrace these trends and functionality will be better positioned to manage returns effectively, reduce costs, and enhance customer satisfaction in an increasingly competitive e-commerce environment.
