The past few months have had a significant impact on economic development and people's behavior. Still, the exact extent of the devastating effects of the global crisis cannot be foreseen. Social distancing and enacted business closings during the lockdowns have forced retailers to break new ground. Brick-and-mortar shops had to try absorbing the losses with new models – with mixed success since many of these retailers just started out.
The best solution will most likely be achieved by linking brick-and-mortar retail and online businesses more closely with one another in the omnichannel world to be able to fulfill the expectations of customers, be more transparent, and to improve the consumer journey sustainably. Anyway, the purchasing behavior of customers has shifted more towards online shopping which triggered an increasing number of retailers to add an online shop to their portfolio.
Customers benefit from the fact that they can have almost everything conveniently delivered to their home, although often not particularly sustainably. Since the goods are only known from pictures, many online shoppers order their articles in different sizes and versions. For this reason, the number of returns has increased in parallel with larger order quantities.
Flagship stores might be a solution for more sustainability
One way towards sustainable omni-channel could be so-called flagship stores after the pandemic. The principle is simple: the dealers have a small local inventory of their goods in the shop, where customers can inspect, try on, and select. Once the choice has been made, the dealer orders the items from the warehouse and has them sent to the customer's home.
If the goods still do not meet the requirements, they can be returned both in the shop and online, creating more comfort for both sides. The customer can take a close look at the color, fit, and model on-site and make a targeted decision, reducing that way the number of returns sustainably. In response, retailers no longer need to hoard large stocks locally, but can leave them in the warehouse, saving retail space and costs.
Click & Collect probably isn’t the last word of wisdom
Even in times of a pandemic, "click & collect" offers retailers the opportunity to open their gates. Unfortunately, customers often complain about the lack of communication and the associated lack of transparency. The combination of online ordering and stationary collection is a step in the direction of omni-channel, but it is not yet fully developed.
The solution would be a hybrid approach in which customers have the choice of how they purchase and receive their goods and how they want to return them if necessary. However, this requires system updates at the cash registers on the retailer's side and it must be ensured that the flow of goods can be ordered both locally and online. At least, the employees would continue to work with the same POS system and could still handle all processes throughout the entire consumer journey.
A hybrid returns management system used in this context also allows more leeway: on the one hand, the consumer experience is positively influenced by better communication and increased transparency, which in turn guarantees higher customer satisfaction and loyalty; on the other hand, the dealers have more opportunities to deploy their staff profitably and generate more sales through higher customer satisfaction.
Complete transparency is no longer a voluntary approach
Particularly regarding customer satisfaction, the focus is increasingly on seamless transparency for dealers. Customers demand at best real-time transparency of the logistics chain – both in the delivery and in the returns process. To be able to guarantee this, however, modern IT platforms must be implemented through which these processes can be digitally mapped and managed. Conversely, digital returns management results in better communication with the customer, because all information the shopper needs for a possible return are given right away. Not to mention that retailers’ chances to find out whether a return can possibly be averted under changed parameters is much higher that way, such as for instance a discount granted on the items. Transparency and automation in communication can reduce customer service costs as well and contribute to a lower return rate.
The combination of brick-and-mortar and online retail in the omni-channel business can therefore have a lasting positive effect on the consumer journey. As a result, sales are increased in parallel to greater customer loyalty. A digital returns platform can be part of this omni-channel, reducing sales losses retailers can only dream of.
By Daniela La Marca