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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

February 18, 2015



Logistics News: Frequent Shipping Errors Can Destroy Customer Relations

Satisfied Customers are More Likely to be Repeat Customers


Holste Says:

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Frequent errors, for whatever reason, have the potential to negatively impact customer relations and the company's bottom-line.
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Previous Columns by Cliff Holste

Logistics News : When Looking To Improve Operations, Shipper Can Tap Into a Variety Of Expert Resources

Logistics News : Shippers Take Advantage of Donating Excess Inventory to Non-Profit Organizations

Logistics News : Will DC Automation Drive Some Shippers to 3PL Service Providers?

Logistics News : Can a Custom Built DC Cost Less Than A General Purpose Building?

Logistics News : E-Commerce Verses Conventional Order Fulfillment

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We have all seen the TV commercial where a lady who ordered a pair of red high-heals received a black pair instead. She was not happy! However, after a quick and easy returns process, she was delighted to receive the red pair and was “happy, happy, happy”.


Depending on the company’s returns policy and practices, for many retailers returns are considered to be a consequence of errors. That is to say some combination of customer ordering error, a supply chain error, and/or order-fulfillment error. Frequent errors, for whatever reason, have the potential to negatively impact customer relations and the company’s bottom-line.


Research conducted by Voxware, a leading provider of voice solutions, presents a clear picture of how order fulfillment errors and the resulting returns process, is perceived by the customer. Highlights from the survey, which collected responses from 500 consumers, include:


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 54% of respondents stated that the reason for returning an item purchased online or by phone is because the item is the incorrect size or color.

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97% of respondents stated that the returns process is important to their future intentions to shop with a retailer.

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73% of respondents who receive an incorrect item after already returning it once stated that they are much less likely to shop with that retailer online or by phone again for future purchases.

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45% of respondents who have experienced continuous returns process issues with particular retailers stated that they have limited shopping with that retailer altogether (both online and in-store).

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26% of respondents expect the correct item to be shipped to them within one to two days after returning the incorrect item.

“This research proves that the majority of the time, consumers return products due to retailer error,” states Keith Philips, President and CEO, Voxware. Keith goes on to say, “Mistakes in the supply chain are happening all too frequently, which not only increase distribution costs, but also severely impact customer satisfaction, customer loyalty, and ultimately bottom lines. Online shopping and consumer expectations will only continue to increase. No question, the time for retailers to optimize their warehouses with wearable technology like voice software is now. Hands-free voice software has proven to significantly reduce warehouse picking errors, so retailers can readily get the right product to the right person and keep those loyal customers happy.”

The following includes the full results of the Voxware research:



Voxware Research Indicates That Most Online Purchases

are Returned Due to Retailer Error

 

Why and How Often Respondents Return Purchased Items

Respondents answered for what reasons they have returned items purchased online or by phone:

57% stated that the item is correct, but they did not like the item once seeing it in-person
54% stated that the item received is the correct item, but it is the incorrect size or color
25% stated that the item received was the incorrect item altogether


Survey participants were then asked which of the above reasons happens most frequently:

43% noted that more often, they return an item purchased online or by phone because they did not like the item once seeing it in-person
42% noted that more often, they return an item purchased online or by phone because it is the incorrect size or color
15% noted that more often, they return an item purchased online or by phone because it is the incorrect item altogether


Therefore, 57% of respondents replied that more often, they return items due to retailer error, whether the size/color is incorrect or the product is wrong altogether. Survey participants also answered what percentage of items that they have purchased online or by phone have been returned due to retailer error or dissatisfaction with the item:

63% answered that up to 10% of the items they purchase online or by phone are returned due to error or dissatisfaction
20% answered that up to 25% of the items they purchase online or by phone are returned due to error or dissatisfaction
8% answered that up to one-third of the items they purchase online or by phone are returned due to error or dissatisfaction


Experiences with and Expectations for the Return Process

When asked how important the return process is to their future intentions to shop with a retailer, 97% of survey participants agree that it is very important. The majority, 59% of respondents, stated that returning products bought online or by phone is moderately easy but annoying, while nearly 10% stated that the return process is difficult.

Additionally, nearly 20% of survey participants have, after returning an incorrect item, received the incorrect item for a second time. 73% of these respondents stated that they are much less likely to shop with that retailer online or by phone again for future purchases.

What’s more, 25% stated that they have experienced return issues more frequently with particular retailers, with 25% noting that they have to return items bought online or by phone more frequently when shopping with large versus small retailers. Of those who answered that they have experienced continuous return process issues with particular retailers, 50% have reduced shopping with the retailer online. Furthermore 45% stated that they have reduced their shopping frequency with that retailer altogether (both online and in-store).

Once respondents return incorrect items to the retailer, 26% expect the correct item to be shipped to them within one to two days, while 43% expect the item in three to four days.

 



Returns processing is a component of a much more comprehensive logistics strategy known as Reverse Logistics (RL). RL is primarily focused on quickly returning to the marketplace “must have” products that often have a relatively short life cycle that may be out-of-date in just a few months. To gain more insight into RL see – “Reverse Logistics – A Key Competency & Strategic Advantage”.


Final Thoughts

Industry experts agree that delighting customers is the clear determinant of online business success or failure. Online shoppers want their lives to be made simpler with the offline world as their benchmark. For the most part, their needs appear to be fairly simple: good secure service, fair pricing and timely, accurate order fulfillment. The companies that succeed in these areas have significant competitive advantages over their competitors and a business model that is best positioned for long-term success.

 

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