A significant majority of retail businesses in the UK leave peak returns planning late and miss out on revenue as a result according to a new survey of retail decision makers by the returns management platform ZigZag. 73% of retailers struggle to prioritise returns planning before peak, despite 86% feeling they would benefit financially from finalising returns strategy earlier in the year – rising to 92% for those that only finish planning by the end of Q3.
Responses revealed the operational gridlock caused by rushed returns strategies and the knock-on effect this has on both consumer satisfaction and sales volumes during peak. Late or poorly co-ordinated returns planning has caused challenges during peak season for 87% of retailers, the top consequences being delayed refunds (39%), higher return rates (27%), and an inability to be flexible with returns policies (26%). With peak season return volumes through ZigZag typically climbing 5-10% each year, pressure is mounting on teams processing returns. 81% already agree that delayed returns planning puts unnecessary pressure on customer service and operations, a problem that is almost unanimous (97%) for smaller or independent retailers.
This operational strain, described as ‘significant’ by three quarters of retailers (74%), costs retailers in lost customer reputation and sales opportunities. 64% of businesses have missed peak season revenue opportunities by failing to offer an alternative to refund – smaller businesses were 31% more likely to feel this impact than larger enterprises (1,001+ employees). Retailers that don’t have a tried and tested returns policy in place risk basket abandonment, as ZigZag’s own data shows 49% of consumers have cancelled a purchase due to a poor returns policy.
As for why returns are infrequently prioritised, retailers are most often unclear on the return on investment (36%). Most are considering at least one alternative returns method ahead of peak – exchanges (65%), instant refunds (52%), return to store (50%) being the most popular options – but the fact remains that leadership teams commonly don’t see the value of prioritising returns planning. ZigZag’s proprietary data shows a missed resale opportunity. 71% of customers spend more than the original balance of a gift card when offered one after a return, with an average overspend of an extra 47% on the next purchase.
ZigZag has pinpointed the date to finalise returns planning as June 30th, based on these responses and 10 years of data from managing returns through peak season. Meeting this deadline allows most retailers enough time to A/B test their returns policies, select carrier partners before they stop onboarding new clients, and avoid operational crunches when activity ramps up for peak. As the survey demonstrates, retail leaders are aware of the financial and operational benefits of early returns planning but find it difficult to put it front of mind. Finalising returns by the end of Q2 is considered a safe target for optimising returns performance.
Peak is always a dog-fight, and retailers need support to ensure they are primed for returns during the busiest retail moment of the year. Marginal gains make all the difference, but the information we’ve gathered from the industry suggests that many retailers are kicking themselves when they come to peak if they haven’t prioritised returns. Most retailers know that operations are more difficult and opportunities to test revenue-saving initiatives are difficult if returns are left to the last minute, and this study shows clearly that this is not just individual disorganisation – it’s felt industry-wide. It’s faster and simpler than ever before to onboard a retailer to a returns portal, which is why it’s so important for retailers to spot early if late returns planning is a drain on resources. As partners to our retail clients we’ve done the legwork and pinpointed the 30th June as the date to aim for, to help retailers get the most from peak season.
– Al Gerrie, CEO, ZigZag
