2023 Retail delivery and returns landscape

Category: Operations
2023 Retail delivery and returns landscape

Carmen Carey, CEO at Sorted, shares her thoughts and expectations for the 2023 retail delivery and returns landscape:

There has been an emergence of marketplaces and brands diversifying to become marketplace orientated

“2022 has seen the emergence and increasing prevalence of marketplaces, and retailers adopting a marketplace model. We’re now seeing so many brands forming partnerships and, often, the mechanic that sits behind that is dropship. This is a great way for brands to access new channels, but also for retailers to diversify their product mix and reach new segments to grab market share and retain customers.”

We are beginning to see retailers find a better way to manage their returns problem

“Returns have always been a headache. In fact, most brands see around a 25% return rate (even higher for some fashion brands), which significantly impacts their bottom line. As such, we’re seeing an interesting shift towards charging for returns – this not only prevents returns as a behavior, but it protects margin as well.

Plus, with brands recognising that the return journey is just as crucial as the initial front door delivery, we’ll see retailers invest more into how they can better manage the returns process. This means better exchange experiences and tightening rules without compromising flexibility for customers. Every return brings the opportunity for an exchange. So, brands need to offer quick, automated, and frictionless exchanges through digital channels if they don’t want to lose out. If brands get this part of the journey right, seamless exchanges and returns will be more of a competitive advantage than free ones.”

Brands will focus on streamlining processes to reduce WISMO

“A staggering 97% of consumers we surveyed stated that knowing where their delivery is, is important. Customers want to be able to access delivery or returns tracking information, and if they can’t find this easily, they’ll be reaching out to the retailer. That’s why taking steps to reducing WISMO and WISMR will be front of mind for lots of teams internally, from customer service teams dealing with the enquiries to the logistics and carrier teams responsible for a smooth final mile delivery. As we know, 2023 is the critical turning point for customer loyalty – ensuring you send proactive updates to customers and have self-service tools in place are just some of the ways to reduce WISMO. In turn, freeing up staff resource and getting customer queries closed quicker – both of which equals pounds saved.”

Post-purchase software is the key to saving money, and making money

“With the economic crisis, the year ahead will be more focused on protecting margins. That’s why more retailers are realising the potential of post-purchase in both saving and making money, while keeping customers happy. Post-purchase communications help ensure first-time delivery success as the customer is kept informed on status, therefore keeping carrier costs in control. Plus, given that post-purchase tracking keeps customers coming to your site for parcel updates, retailers can reap the benefits of upselling and capturing more sales.”

Customer retention will be a key focus on 2023

63% of consumers say poor delivery service would stop them purchasing from a company again. As such, the delivery experience must be seamless. So having choice at the checkout, getting the delivery on time, and receiving effective communication throughout that process is crucial. This is especially true given the recessionary economy. Earning loyalty will be imperative for brands, so providing delivery experiences that keep customers click-happy will constitute a successful retail model.”

The cost-of-living crisis will make consumers more cost-conscious than ever

“Consumers are going to be so much more deliberate in how they choose products when buying online, so retailers need to have the right mix of carrier services and delivery options at the checkout. Customers will be less likely to pay a premium for next day delivery, so we may see an increase in the consumption of standard services or nominated day services instead. Choice will be a key thing for retailers to get it right at the checkout.”

Sustainability will be key for retail next year

“Innovations in sustainability in the world of carrier management have started to gather pace in 2022. But no major mainstream retailers are truly adopting the power of sustainability as a customer loyalty mechanism. There are some specialist brands, like Patagonia, that are purpose driven at the core of what they do. There are many others that have put it on the agenda, but they haven’t taken real action yet. This will change drastically in the coming year as sustainability becomes a key focus for consumers. Retailers will need to find a way of offering cost-effective options, but sustainably.”

Post-purchase software market can unlock more cost efficiencies

“There’s a lot of potential in the post-purchase software market for retailers to unlock cost efficiencies in their business. A great example is where retailers experience challenges with large volumes of shipments that are crossing borders. There’s a lot of data that’s flowing through tech platforms that can be used to give retailers a predictive view of what might go wrong. This data can then help them unblock a problem, saving on unwanted costs in the process. With disruption always around the corner, more retailers will begin to use data in the year ahead to avoid unnecessary roadblocks.”

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