Key Points:

  • 60% of U.S. consumers say they visit physical stores less than before the pandemic
  • 66% percent of shoppers say they favor brands that offer more shipping options
  • In 2020, US consumers returned a staggering $428 billion of goods for a return rate of 10.6%, according to McKinsey

The pandemic pushed the shopping experience online, making shipping and returns both an essential form of customer service.

According to the EY Future Consumer Index, 60% of U.S. consumers say they visit physical stores less than before the pandemic. Forty-three percent say they now shop online for products that they would have previously purchased in person.

Without stores to visit, receiving and returning items becomes a more significant experience for shoppers. It's no secret that premium shipping is a make-or-break feature for many. Free returns are now increasingly in-demand as part of a service experience that hinges on convenience.

Merchants have adopted obliging shipping and return policies to win over shoppers. Problem is, the economics of free shipping and returns will eat into your bottom line if you’re not careful.

It’s important for businesses to optimize their shipping and returns processes for both customer experience and cost. This balance is difficult to achieve, as the shopping experience is digital – but the new dual pillars of customer service take place in the real world.

Use this article to learn how to optimize your shipping and return service for cost and customer experience, and get a competitive edge.

Table of Contents

Shipping is Customer Success in eCommerce

Shipping is a core service channel in the era of coronavirus shopping, and a brand's worthiness is often gauged by its quality of delivery. For example, 66% percent of shoppers say they favor brands that offer more shipping options. Another study found that 60% say they fall in love with a brand after quality service.

Shipping is a lever for customer success, in other words. This means you can differentiate yourself with a next-level shipping service. Effectively, this translates to:

  • Offer a range of shipping options: Appease your audiences’ desire for free, fast, and varied delivery times (as much as you can afford). This is most easily done with real-time courier rates in your checkout.
  • Deliver on time: Shoppers are happy to abandon companies that fail to deliver on time.  One study found that 69% of shoppers abandoned a brand after delivery was two or more days late.

The challenge is, shippers today are vying for limited shipping capacity caused by simultaneous freight disruptions and surges in online coronavirus shopping. Meanwhile, FedEx and UPS have introduced new surcharges and suspended delivery guarantees for certain services. Unfortunately, research shows that only 1 in 5 shoppers forgive brands of service disruptions due to Covid-19.

To win over customers with reliable delivery, you can improve your shipping service in the following ways:

  • Automate tracking: Nearly all shoppers say they want to be able to track shipments from purchase to delivery. Be sure to share tracking links with buyers immediately after the sale, which can be sent by triggered email from your eCommerce platform. If your eCommerce site lacks this capability, shipping platforms like Easyship make it easy to automate this key customer outreach and keep customers happy. If you do, you can redirect shoppers to a personalized, professionally designed tracking page instead of the clunky courier website.
  • Fix delivery issues fast: Some 5-15% of shipments get lost, stolen, or damaged transit. When this happens, it’s important to be responsive to customers and remedy the situation at once. Since couriers can take days to locate packages, resending the item is best. For best results, send the replacement via expedited service to show customers you care.
  • Offer transparent shipping: Shoppers prefer to buy from brands that provide shipping options that match their budget and timeline. In other words, buyers want to see real-time rates and accurate delivery lead times. Retailers like Amazon offer a mix of choice and transparency within a seamless checkout to achieve high conversion rates.

Takeaway: Quality shipping is the end cap on a satisfying and retentive customer experience.

Returns: The New Pillar of eCommerce Customer Service

Returns are increasingly prevalent in coronavirus-era shopping, making them a vital service channel for merchants. In 2020, US consumers returned a staggering $428 billion of goods for a return rate of 10.6%, according to McKinsey. Nearly a quarter of returns volume was from eCommerce.

With free returns now commonplace, online ordering has become a discovery process rather than a final decision for shoppers. Customers are leaning on the goodwill of businesses to find that perfect item, which is costly for sellers. Profits on returned items can be as low as 1% according to Easyship data.

Lenient return policies do help companies to acquire customers, though. Seventy-four percent of first-time visitors said that if the site's returns process was easy, they'd be more likely to purchase with that retailer again.

The promise of return service coaxes many prospects to purchase, so it’s unsurprising that up to 70% of surveyed businesses say they offer free return shipping on all or some items. That said, smaller merchants may not be able to offer free returns, or only on items that cost little to ship.

It’s important for brands of all sizes to balance the costs of returns against customer-friendly return practices. A good first step is to factor in the average cost of returns into your shipping costs. This provides a sense of your profitability at the current rate of returns.

If you use Easyship, you can look at your shipping analytics to view return rates, and identify which items are coming back most often. Be sure to account for peak seasons and holidays as well, as returns spike during these periods.

Better returns management helps you to reduce costs and improve consumer loyalty at once. Here are a few tactics to improve the economics of returns for coronavirus shopping:

1. Mitigate returns in store

Helping customers pick the right products reduces the likelihood of returns.

This is especially important for apparel brands that endure high rates of returns. McKinsey found that 70% of apparel returns were caused by poor fit or style choices, suggesting that in-store shopping tools can help prevent returns and improve the customer experience.

Website elements like customer reviews, size guides, high-resolution photos, and chatbots all help customers buy right the first time.

2. Accelerate returns

Reverse logistics is the process of returning items from customers to your location to be resold. The longer this process takes, though, the more costly returns are.

You can reduce costs by pushing customers to return items swiftly and via your most cost-effective channels, including:

  • Promote third-party drop-off locations: Customers want their return experience to be as seamless as the shopping experience. Use your post-purchase messaging to point buyers to local drop-off locations that handle returns, such as UPS Drop Boxes and Amazon lockers in Whole Foods. These third-party locations make it convenient to execute a return during the daily routine without adding a trip to the post office. Similarly, you can instruct buyers how to arrange for package pickup at their home or office through the courier.
  • Ease returns by mail: Sixty-three percent of shoppers say they want to return items by mail, while 13% say they want to return items by hand. To assist, you can include return shipping labels with all orders or those containing your most-return items. This helps to shorten reverse logistics, streamline the customer experience and minimize service requests. A frictionless returns experience comes at the expense of providing free returns labels, though. With Easyship, however, you can auto-generate all return labels with your shipping labels to save time on both shipping and returns.

3. Analyze returns to improve operations

More than 4 in 5 of businesses surveyed by McKinsey say that returns are a concern for probability. This suggests that brands should work to lower the costs of returns by identifying the causes of returns using their inventory management system.

Ask yourself – What are your return rates by category? How many returned items get resold? What are your returns processing costs?

If this is all new to you, you’re not alone. Returns are exposing the shaky foundations of fulfillment in many companies. These weaknesses can become a real problem as you scale, and even during holidays. It's important to first understand the drivers of returns, then work to reduce costs by improving returns management with the operations team.

Agile technology that fuses inventory management and shipping capabilities can help you gain visibility and better orchestrate reverse logistics to lower costs. Easyship, for example, provides automated returns capabilities with triggered communications, real-time inventory updates, and robust analytics within one easy-to-use dashboard.

Shipping and Returns are Key Service Pillars for Coronavirus Shopping

The customer experience has narrowed during the shift to online shopping and changed what matters in customer service. Shipping and returns service are the two core pillars of customer experience that are driving revenue for brands. Buyers are prioritizing brands that excel in these service areas, making it critical to invest accordingly – or risk getting left behind.

Want to try Easyship for free? Simply create your free account. You’ll instantly access discounted shipping rates plus automated shipping and returns features. It’s the fastest way to get a leg up in customer experience.