Online shopping, already popular before the recent pandemic, has become a permanent purchasing medium for many customers. Online sales topped $211.7 billion during the 2022 holiday shopping season, a record reflecting the centrality of online shopping and its impact on the retail ecosystem.
The rise of online shopping has been a boon for retailers, allowing them to cater to an expansive cohort of digital-first consumers, including the one-third of adults who say they are online “almost constantly.”
It also presents unique challenges as providing incredible customer experience, including offering and managing returns, which are costly and more likely to impact products purchased online. U.S. shoppers returned more than 25 percent of the value of their purchases last year, costing retailers billions of dollars in the process.
Here are four ways location data helps improve the customer return experience for businesses and buyers.
#1 Cultivate Customer Confidence
Since most shoppers buy online because the experience is easy, convenient, and straightforward, it’s only natural to make the return and exchange process an extension of this ethos.
According to one survey, returning items adds extra stress to shoppers. It’s a hated part of the online shopping experience, as customers stress about paying for shipping, having the item lost or not arrive at its destination, or traveling to a carrier drop to ship an item.
In order to buy online with confidence, shoppers require the flexibility that an easy return policy offers. Utilizing the power of location data is an effective approach to streamline the returns process and avoid wasting time, effort, and money. Location data encompasses more than just a physical address, including email addresses and phone numbers, which are critical in establishing a customer’s digital identity.
#2 Simplified Reverse Logistics
Contrary to the purchase journey, where items are delivered to your doorstep, the returns process operates in reverse.
When a customer initiates a return, the organization updates its online system, generating a return slip and shipping label. Once the returned goods are received, they undergo processing and inspection before a refund is issued.
However, shipping issues may arise, particularly if the customer opts to purchase a shipping label directly from a carrier instead of using the label provided by the seller. If customer data is unverified, refund payment delays can arise regardless of whether you handle the fulfillment process internally or through a third-party logistics company (3PL).
Since 62 percent of customers’ expect an exchange or refund within 30 days of purchase, simplifying reverse logistics helps ensure that returns and exchanges are executed as quickly, efficiently, and accurately as possible.
#3 Optimize In-Store Returns
Shoppers want to make purchases online, but they often want to return items to physical stores. In fact, the ability to return items in person is frequently a differentiating factor for customers making a purchase decision. Sixty-two percent of shoppers say they are more likely to buy something online if they can return their purchase to a physical location.
However, two-thirds of customers remain skeptical of this experience, dreading the return line and its inevitable frustrations.
That’s why companies that work to change this narrative can increase customer satisfaction and differentiate themselves from the competition. Equipped with high-quality data across all points of sale, companies can make returns friction-free by ensuring that return information matches the data captured during purchase, decreasing wait times, minimizing the chance of fraud, and delivering a better customer experience.
#4 Guard Against Fraud
Certain customers may attempt to exploit complicated return procedures by falsely claiming that all items were included in their shipped package or by using deceptive tactics during in-store returns. While measures are in place to prevent fraud, they can often be overly intricate and time-consuming, which may deter convenience-seeking shoppers.
These losses add up, collectively costing retailers $15 billion annually.
In other words, retailers have a bottom-line imperative to balance security and convenience without compromise.
Retailers can onboard new customers in a way that is fast and secure by using proof of address, email address, or phone number as a form of identity verification. This reduces fraud without negatively impacting the customer experience.
Today’s Returns are Tomorrow’s Repeat Customers
According to one consumer survey, 40 percent of shoppers are not likely to shop with a retailer again after a poor returns experience, underscoring the importance of return management this year.
With the help of location data, retailers can simplify the returns process, cultivate customer confidence, optimize in-store returns, and guard against fraud. By improving the customer return experience, businesses can increase customer satisfaction, drive competitive advantage, and turn today’s returns into tomorrow’s repeat customers.
