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How online returns harm Australian retailers' image
Mon, 28th Aug 2023

New research from Manhattan Associates has revealed how online returns processes are detrimental to shaping Australian retailers' perceptions.

66% of Australian shoppers stated they had a less than satisfactory experience with online returns in the past year. Of those shoppers surveyed, 46% said they now negatively perceive a retailer following an online returns issue.

Within this group, 32% attribute these difficulties to inadequate communication with the retailer, highlighting a growing disparity between shopper expectations and their perceived experience.

Alarmingly for local retailers, the research also showed that 51% of shoppers were unlikely to continue shopping with a retailer should they encounter a complicated returns process. 

Raghav Sibal, Managing Director, Manhattan Associates, says: "With escalating inflation and rising interest rates causing people to reconsider discretionary spending, the returns process proves an increasingly crucial aspect of the online shopping experience, significantly influencing a customer's overall experience and their decision to engage with a retailer in future."

"In today's competitive landscape, retailers must recognise that every positive experience, including product returns, is a chance to connect with customers, strengthen brand image, and increase the chances of turning one-time buyers into long-term customers."

However, it wasn't just poor experiences that would turn shoppers away, but their satisfaction with the returns policy before purchase. 73% of respondents said the ability to return items purchased online to a physical retail store was important when deciding where to shop, highlighting the value of flexibility, choice, and a consistent omnichannel shopping experience. 

The research also indicated that flexible returns options significantly influenced purchasing decisions, with 39% of shoppers indicating a higher likelihood of shopping online if returns were free. This result emphasises the connection between low-risk shopping and enhanced customer confidence.

Raghav explains: "Empowering shoppers with a seamless and easy returns experience is not just about convenience; it's a strategic move to diminish the perceived risks associated with online purchases in an environment where people are increasingly scrutinising how they spend their money."

"By offering hassle-free returns, retailers effectively bolster consumer confidence, making online shopping an enticing proposition with reduced uncertainties." 

When asked which factor was most important when making a return, 47% of shoppers highlighted that an easy returns process was paramount, 25% stated the cost of return shipping, and 21% favoured the speed of the return.

Such is the importance that Australian shoppers place on a flexible returns policy that 48% of shoppers even expressed a willingness to pay a slightly higher price for a product if it meant they would benefit from a smoother returns process.

"The prospect of a challenging returns process adds an unwelcome risk for shoppers today, often deterring potential purchases. Retailers must recognise that a frictionless returns process isn't just a convenience; it can be the deciding factor in encouraging or discouraging a sale," says Raghav.

"To prevent negative shopping experiences, retailers need the right systems and technologies in place. Today's shoppers demand seamless experiences achievable only through strategic deployment of advanced technologies." 

"Manhattan Active Omni's order management and customer service reverse logistics optimisation capabilities can help retailers turn returns from sunk costs into a revenue differentiator in retail through return routing optimisation, omni returns capabilities and automated returns resolution," concludes Raghav.