Reducing ecommerce returns
Last week Oakdene Hollins International Director David Fitzsimons participated in the Reverse Logistics Association European Meeting in Amsterdam. Here’s his thoughts on the event.
Everyone nods in agreement when a colleague says we need to reduce packaging. But the next time you find yourself in a room of nodding heads remind yourself of some fine research from Dr Heleen Buldeo Rai from Vrije Universiteit in Brussels concerning 'Reducing ecommerce Returns'.
ecommerce returns have increased in Europe to €191 billion during 2022 according to Tony Sciarrotta of the Reverse Logistics Association. The environmental consequences of these ecommerce returns is significant. Free returns make it worse but greatly boost the sales numbers.
Methods to reduce returns whilst hitting sales targets are of interest to our clients at Oakdene Hollins. So how do you think we advise our clients in the light of this research finding?
ecommerce return rates fall by 6% when the product is delivered in luxury packaging. It seems that customers are disappointed when their on-line purchase arrives. The blue skies, models and attractive web design surrounding the product on screen contrast with the wet Tuesday evening when the package is opened after a long day at work. The luxury packaging helps to bridge the disappointment gap and thereby prevent a decision to immediately return it...for free.
But by introducing more packaging are we not contributing to a separate issue? Or does the benefit to reduced carbon footprint from reduced returns counteract this? The key here is not to solidify ourselves on a singular solution, we must explore all options.
In its nature, the circular economy can help to balance this issue by implementing sustainable returns practices. By encouraging customers to return items for reuse or recycling, you can reduce waste and significantly improve your environmental impact.
Take the mattress sector for example -whilst the 100-day comfort guarantee being used for mattresses caused a similar explosion in return rates. The outcome has been the invention of new processes to recover the value in the used mattresses. Simba are selling the returns at 80% of the original price. Therefore, whilst returns, and associated emissions are not mitigated, the returned product still has an economical value from resale albeit reduced.
But do we need to go further, do we radicalise the way we return products altogether? The message is clear- ecommerce returns are an issue environmentally and economically. Whilst there are methods to reduce returns and ensure that the returned product still withholds commercial value, there is still a way to go in mitigating the negative effects of ecommerce. We must continue to support the sector, innovations and circular economy practices to promote more sustainable ecommerce solutions. At Oakdene Hollins, we are advocates for a circular economy and are keen to support those wanting to learn more or implement circular practices- get in touch to find out more.
