Guest blog by Oren Levy
In years past, traditional shoppers may have been loyal to a certain channel, but today’s consumer easily transitions from one shopping channel to another. Many shoppers choose to check prices online or via their smartphone and then pick up their purchase in a brick-and-mortar store. But the opposite is also true – shoppers may see something they like in a physical store but only complete the purchase online or via their mobile phone.
Furthermore, due to the blurring of boundaries between the online and offline channels, returns have become a key issue for both retailers and customers. Shoppers expect to be able to return goods at all of the retailers’ channels regardless of where the purchase was made.
What Motivates Today’s Omni-Channel Shoppers?
According to a 2014 study titled “BOPIS and BISBO Will Propel Retail into Orbit,” consumers are driven primarily by convenience, price and incentives. The study showed that 63% of shoppers buy online and pick up in-store at least a few times a year. Among the respondents, 82% stated that they would consider shopping this way if they received a $10 rebate on a $50 item or prepaid reward cards. Prepaid reward cards branded with the store’s name alongside a special offer actually drive double-digit spending in-store.
Improved digital experiences, particularly in mobile, have become a significant deciding factor for purchasing online. But many shoppers still enjoy visiting physical stores, which increasingly play the role of showrooms for web-only shoppers. Buyers can browse, check out a color or try something on.
Retailers Roll with the Punches
It wasn’t all that long ago that retailers were able to draw a clear line between online and offline operations; each sector was operated separately. But this type of separation no longer meets the requirements of today’s consumers, who demand immediate gratification. A recent study indicates that an overwhelming 70% of retailers said they have adopted an omni-channel strategy to link shoppers’ in-store experiences with e-commerce, mobile and social media platforms.
This kind of basic rethinking and the subsequent restructuring can be costly. But according to industry analyst firm eMarketer, by stepping up omni-channel efforts, retailers can ultimately reduce costs. Allowing shoppers to return online purchases in-store, and enabling them to use the store as a delivery hub for items purchased online can actually result in savings.
Macy’s recent announcement about the merging of its online and brick-and-mortar merchandising teams is a prime example of this kind of metamorphosis. Macy’s chairman and CEO Terry J. Lundgren stated, “Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones. We must continue to invest in our business to focus on where the customer is headed—to prepare for what’s next.”
Macy’s declared that it will create “one unified merchandising and marketing organization—a hybrid of store and online buying.” This new direction includes combining the retailer’s merchandising and marketing teams into single units, instead of having separate teams buying and marketing for the web and stores. As a result of the new visibility into companywide inventory in stores and distribution centers, Macy’s is also testing same-day delivery of online orders.
Other leading retailers whose consolidation centers have been traditionally separated by channel, including Home Depot, are also merging facilities. Target says that it is integrating two different channels to streamline operations, and it has reduced the cost of returns by leveraging return-to-store.
Managing Returns on Multiple Platforms
Returns are an inevitable component of the purchasing cycle. Rapid and seamless returns processing is no less important than a gratifying initial purchase transaction. Today’s market weighs in favor of the customer due to multiple available commerce options and social sharing. Many dissatisfied purchasers will go straight to Facebook or Twitter to express annoyance with a product. The very fact that a consumer chooses to return a purchased article signifies dissatisfaction. Therefore, the return process is often the last chance for a retailer to appease the buyer and recover customer loyalty.
Although returns often occur via a different channel than the original sale, today’s consumers expect retailers to have immediate access to every transaction, no matter where it took place. Due to the fact that many buyers do not bother to keep receipts, the retailer must also have the ability to locate the original transaction by searching for the customer’s name or other identifying data.
The rise of e-commerce has been accompanied by a surge in returns, forcing retailers to change the way they are handled. Returns have grown particularly in the areas of apparel, furniture and other items that people prefer to experience in person. It is not uncommon for customers to purchase several similar items with the intention of keeping only one of them. Many e-commerce retailers have started offering returns via parcel, and they often provide a return shipping label in the box. Return forms included in the supply package feature bar codes enabling rapid transaction call-ups.
Return Data Helps to Keep Customers Happy
Return data enables retailers to track returns by channel in order to identify problems. For example, if a certain item sold via ecommerce is returned more often than the same item when it is purchased in a brick-and-mortar store, the problem may lie with the way the product is being presented on the website.
Return data also helps retailers to flag “serial returners.” Return reports enable the discovery of customers that are abusing return policies so that future returns from them can be denied.
Multi-channel sales and returns are crucial elements in a constantly evolving retail experience. Customer loyalty depends increasingly on the retailer’s ability to seamlessly glide from one channel to another and back again without any hiccups. The bar is set pretty high, so the retail journey promises to be exciting, eventful and maybe even bumpy in the foreseeable future.
Oren Levy is CEO of Zooz