When a smart, cost-efficient returns strategy drives loyalty

While consumers continue to seek the in-person experience of visiting actual stores, many are now willing to forego ‘destination shopping’ in favour of the ease of ordering online. A recent study of ten markets in the Middle East and Africa, including the United Arab Emirates and Saudi Arabia, revealed a sharp uplift in e-commerce in the region with up to 40 percent of respondents now shopping online more than ever. Crucially, the majority of these respondents also said they will maintain their current shopping behaviours.

The unprecedented rise of e-commerce in the region will have a significant impact on SMEs. To keep pace, companies will need to develop an in-depth understanding of the changing consumer trends that are driving online sales and adapt accordingly, taking into account the global context of the virtual marketplace. They will need to be able to compete with well-established online brands, providing exceptional online service to meet today’s heightened consumer expectations.

Underpinning all e-commerce is a need for trust. Trust that the product will live up to its online description, trust that it will arrive where and when it was promised and, crucially, trust that it can be returned without a lot of hassle if it isn’t right.

So it follows that one of the most critical marketing element brands should consider when building a successful e-commerce business is its return policy. According to the global UPS Pulse of the Online Shopper study, 73 percent of online shoppers say the returns experience affects their likelihood to buy from a retailer again.

Companies entering the online space for the first time need to be aware that making a mistake with the returns process could have significant impact on the success of its e-commerce strategy and its overall performance. Online shoppers do not want to risk being stuck with a product that doesn’t match their expectations and the risk is higher because they cannot see or touch it first. The guarantee of easy, cost effective return services and an efficient refund process reassures the online buyer, accelerates the decision process and drives repeat sales.

However, returns are also costly, and businesses need to think about how they mitigate this to remain performant in the increasingly competitive virtual market. Directing returns to local centres, from where they can be sent out to new buyers nearby instead of back to the main hub is one clever way of reducing costs.

A more sustainable and strategic way is to look at developing a robust, seamless and efficient return service as an opportunity - to bolster brand loyalty, ensure return custom and cement long term growth - rather than solely optimizing the costs. Gaining customer confidence by providing convenient solutions throughout the entire journey is a strategic advantage. Getting it right can be the key to success, a critical investment in the future.

Global logistics provider UPS offers what they call their Store 360 Returns program, which enables small businesses to get items returned to a designated location in a simple, cost-effective way. Their customers just have to drop the return off at one of the many UPS locations and UPS will ensure the packages are delivered correctly. Costs of shipping and/or packaging can either be billed on a monthly basis to the business directly, or alternatively the customer can be required to pay for the service at the time of the transaction.

“We understand that for consumers, a positive returns experience is a clear driver of engagement and loyalty and that’s why we have made it our mission to simplify the process,” said Renzo Bravo, UPS head of strategy and marketing in Indian Subcontinent, Middle East and Africa. “By offering our small business customers an effective and straightforward way to handle their returns, we can also help them reduce both the time and cost normally associated with this crucial aspect of e-commerce.”

He continued, “Making life easier for customers is part of our ethos - we are continually striving to find new and innovative ways to help improve our services for the good of the communities we serve.”

This is good news for small businesses who, in today’s increasingly online world, are likely to face tricky decisions about how to augment their e-commerce strategy and where they can find efficiencies. Our advice: partner with a provider who can help with a 360 solution to not just manage returns but also create a strong and sustainable e-commerce business.