Omni-Channel Returns – What is the true cost of a return?

Returns_150x150There are few retail sectors, if any, not impacted by the growth of online shopping and this growth is showing no sign of slowing down. A key question for every retailer paying high rents and rates for their bricks and mortars estate is to consider to what extent these stores are either an asset or a liability. One answer can be to see these stores as an asset, and a means by which they can fulfil their customer’s online orders faster, cheaper and easier. To this end, many retailers are now offering a Click and Collect service, using retail stores as a point at which the consumer can pick up their items ordered online.

By way of example, a European department store, part of a retail organisation with many formats and stores, offers their shoppers the option to collect an iPad, a suit, a pair of shoes etc that they order online at any one of their many, often more local and convenient, stores within their family, with no delivery charges.

For their online business and customers, this is a far more efficient, convenient and cheaper way to get what they want. For the stores fulfilling the department stores online orders, the hope is that when the customers collect their orders they will come into the store and buy other items.

For the marketing teams, this looks like a winning proposition. However, through the lens of those who run the stores and the loss prevention team, the list of risks and concerns is extensive:

  • How do I protect the items ordered online and sent to the store for collection from any vulnerability to theft & fraud?
  • How do I send goods not collected or returned to the store back to the distribution centre?
  • How do I know that these returns are not fraudulent or the goods not fake?
  • Who will train my team? How much time will this new process incur? Will I get more hours?

These challenges are significant and meaningful. One ECR group member shared that for these reasons they shut down one of their click and collect operations.

The aim of this study, led by Professor Lisa Jack, Dr Regina Frei and Sally-Ann Krzyzaniak at the University of Portsmouth, is to learn from retailers, via site visits, interviews and surveys, the extent of the risks and concerns relating to click and collect returns, the true cost of those returns and the best practices and controls that can reduce the cost of click and collect returns. The final report and best practice guides will be shared with the members of the ECR Community Shrink and OSA Group in December 2017.

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