What happened in retail this week
The economic impact of the COVID-19 outbreak across the globe has been catastrophic, and many experts think we are still only seeing the beginning. To date, this has been one of the hardest weeks retailers have faced. But despite the seemingly insurmountable challenges, there are still ways that retailers can pivot to remain profitable in today’s climate.
Stories I’m watching:
- Retail Dive | What retail could look like when stores reopen
- USA Today | 14 retailers with flexible returns policies during the coronavirus pandemic
- The Verge | Amazon is temporarily extending its return policy due to the pandemic
The big picture
Retailers are hurting, and the ones hurting the most are those that don’t have ecommerce channels and ship-from-store capabilities. With mass store closures and consumers diverting spending from non-essentials to essentials, retailers have begun furloughs, deferred rent, and shuttered arms of their businesses.
That being said, retailers are holding on tight to lines of business that may offer their best opportunity to drive revenue. My expectation is that while you will see massive furloughs happening across retail, the last thing many retailers will cut are their IT teams and ecommerce teams, because of the shifting priorities to digital.
We are seeing three key themes emerging as they relate to retail returns during this time:
- Supply chain pressure and disruption
- Challenges with trapped inventory and the need for recommerce
- Investments in ecommerce experiences
Within the supply chain, the online shift paired with store closures is putting pressure on operations, both forward and reverse. These pressures are coupled with supply chains experiencing disruption due to COVID-19. In order to handle this, retailers should invest in processes and technology to more efficiently manage large volumes and provide flexibility for handling disruption.
Recommerce is also important to focus on in this COVID-19 world. With stores closed and unable to sell excess and open box goods, and many outlet channels shut down, it is important for retailers to have online recommerce options available to resell customer returns, excess and open box products.
Finally, slow processing of returns and store closures are causing slow refunds and poor customer experiences. Retailers have a real opportunity to gain new customers during this tough time, but have to remember to focus on improving the returns experience.
Ecommerce returns are more important than ever
With lower overall sales and a shift to online purchases and returns, retailers will need to make sure their online returns experiences and capabilities are providing maximum value to customers and their bottom line.
Retailers who can transform a customer return into a returning customer, will fare much better than those who can’t.The data shows that a good returns experience can increase customer loyalty and reduce call center contacts, which are two things retailers should prioritize at this time. As we’ve shared before, 97% of consumers will continue shopping with a retailer who provides a positive customer experience. I’ve outlined some ways retailers can improve online returns below:
What retailers can do NOW to improve ecommerce returns:
- Provide a user-friendly online returns initiation portal so customers can quickly and easily start a return online.
- Update current return policies with flexibility in mind. Extend return windows and provide prepaid shipping labels to account for customers not being able to return items to brick and mortar stores.
- When possible, offer customers easy exchange functionality in your online returns system or other “recommendation” type features to save the sale.
COVID-19 has changed daily life significantly in a few short months, and the world of retail is no different. However, I believe that these steps can help mitigate some of the stress felt by retailers when it comes to shifting focus and priorities to ecommerce. For more information around this topic, see the video below!