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Post-Holiday Returns Will Look Different This Year

This holiday season is significantly different due to Covid-19, as customers indicate a growing preference for online and contactless shopping. This is evident by the 15.1% YOY increase in spending by shoppers on Cyber Monday (According to Adobe) and the 73% of U.S. customers who will opt-in for the contactless gift shopping experience (According to Deloitte's 2020 Holiday Retail Survey). However, one post-holiday event is expected to remain very store centric, the kick-off of holiday returns on December 26th.


Traditionally, December 26th ranks as one the busiest days (3rd) for retail in-store traffic, with millions of customers looking to return gifts from the holiday season. Typically, retailers would be ready with a standard game plan to handle the increased traffic, but with the increase in Covid-19 restrictions, it is a different challenge this year. Last year saw around 70% of holiday returns being transacted within stores, according to Narvar. So, even though that number might decrease this year, it is still not hard to picture throngs of customers at stores the day after Christmas. Even with Covid-19 protocols, customers will always expect a hassle-free and now potentially contactless return experience. A lot is at stake, with 33% of customers who encounter a challenging return likely not shopping at that retailer again (Narvar's Consumer Study State of Returns: New Expectations).


"A positive returns experience is critical to retaining newly-acquired customers and limiting existing customer churn."


Little has been discussed on how retail stores plan to address a more significant challenge this year, which is surprising since a positive returns experience is critical to retaining newly-acquired customers and limiting existing customer churn. So how should retail stores be preparing for the upcoming returns storm? Below are some alternatives that we believe retailers should be considering.


Offering Alternative Drop-Off Locations

Some retailers are looking to partnerships with third-party vendors like Happy Returns and Navar to set up pop-up and offsite locations for processing returns. According to CNBC, even mall owner Simon Property Group will accept returns at their concierge desks at some of their properties. Hopefully, these partnerships will help reduce some of the return foot traffic.


Curbside/Drop-off Returns

Just as retailers have transitioned to offering curbside pickup to provide a contactless shopping experience, the same could be done with returns. Allowing customers to quickly reference the receipt and at least start the return process, which is then concluded with aid from store employees once they arrive at the store. This could require adjustments to business processes, customer/employee journeys, and technology to enable curbside returns.


Customer/Employee Journeys – Anticipating and documenting the expected customer and employee journey maps is essential to achieve the desired outcome and ensure that business processes, technology requirements, and necessary change management are accounted for within those journeys.


Business Process – To minimize fraud and errors, retailers must evalute the best way to integrate and adapt an organization's returns procedures into this service, all while providing a convenient experience for the customer.


Technology – A wide range of applications and tools could need to be added or altered to support this type of initiative. This could include updating mobile app/e-commerce, returns management, CRM capabilities, mobile staff tools, and customer communication.


"Retailers should be looking to improve upon the experience by leveraging available technology options."

Enhancing the In-store Returns Experience

Even though the numbers may be down this year, customers entering stores to process a return will never disappear, so retailers should be looking to improve upon the experience by leveraging available technology options. Just as brands look towards new applications and tools to enhance stores' sales experience, there is no one-size-fits-all path for retailers to follow. Below are a few ideas worth considering to help improve the in-store returns experience.


Virtual Queue/Reservations - Taking a page from Disney and Universal Studios would be allowing customers to opt-in to select a specific timeframe or enter a virtual queue using a retailer's mobile application. To help ensure success, stores could leverage marketing/communication tools to educate customers on this feature and provide in-store status updates.


Line-Busting/Mobile POS Solutions - Taking advantage of the staff's mobility by implementing a mPOS and allowing staff to process customer's returns while waiting in line. As wait-times increase during peak times, back-up trained employees can be ready to jump in and help medicate the growth in return traffic.


Opt-in Self-Serve Exchanges/Returns via Kiosks – Allowing customers to utilize kiosks to self-serve returns/exchanges could help reduce returns traffic build-up, especially for those who have opted-in to a brand's loyalty program. Only allowing this option to loyal participates would likely help limit fraudulent activities and provide added value to the program.


Self-Serve Returns via Smart Lockers – Using Smart Lockers in which customers can safely and securely drop off the items they wish to returns, which will be later processed by staff. In theory, these returns could be initialized in many ways, whether using kiosks, the brand's website, or mobile application. This option would require an investment by retailers, but this asset could also be leveraged to help enhance any BOPIS or contactless initiatives as well.


Even with stores utilizing some new approaches this year, the final result will likely be a year of lessons learned for retailers, encouraging business leaders to focus on improvements to their returns customer journeys. Just as Covid-19 has accelerated changes to other aspects of the shopping experience, returns are an additional area of opportunity. Luckily, many retailers are increasing their focus on customer experience in this climate, making it an optimal time to further explore this area.


RCP has successfully worked with many forward-thinking brands to help define their post-holiday returns process and we can help with designing, developing and implementing those initiatives. Reach out to us at info@retailconsultingpartners.com to learn more about our innovative returns strategy experience and proven strategy methodologies.

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