“customer-centric ecommerce –part 2” - postal vision 2020 · “customer-centric ecommerce...

“Customer-Centric eCommerce – Part 2”V. New Models: Returning

Moderator: Dr. Ian StanfordPublic Policy Analyst

USPS Office of Inspector General (USPS OIG)

Darren LambDirector of Research &

Business Development

The Colography Group

Tony SciarrottaExecutive Director

The Reverse Logistics Assn

Larisa SummersEVP of E-Commerce and Digital Marketing

Optoro

David LioneSr. Enterprise Account Director

OpenMarket

Returns ManagementA Pivotal Moment for the Package Delivery Industry

Ian StanfordPublic Policy AnalystU.S. Postal Service OIGPostal Vision 2020/7.03/22/2017

A Time of Transition

• In the past, large retailers relied heavily on liquidation.

• Current trends shaping the future of returns logistics

• Rising ecommerce volume

• Access to global markets

• Technology and data

• Shifting consumer preferences

How Most People Think Returns Work

CUSTOMER RETURNS

MAIL BOX STORE ?

How Returns Work

Source: USPS OIG, The Evolving Logistics Landscape and the U.S. Postal Service.

THE RETURNS MARKET

DELIVERY COMPANIES

3PLs

SOFTWARE DEVELOPERS

RETAILERS and MANUFACTURERS

LIQUIDATORSREVERSE SPECIALISTS

WASTE DISPOSAL

Critical Challenges

1. Cross border Returns

2. Integrating Omnichannel Returns

3. Efficient Routing and Return to Market

4. Linking Returns Costs to Customer Experience

5. Design with Millennials in mind

6. Corporate Reorganization

Source: Findings from USPS OIG Returns Forum, Aug. 2016

Source: LuxuryDaily.com

The E-Commerce Hangover: Reverse Logistics

Tony Sciarrotta

Executive [email protected] * 678-662-7767

The Reverse Logistics Associationwww.rla.org

Member Driven Global Trade Group For Returns Solutions

mailto:[email protected]

Overview

Make it easy for people to shop online:and oh, they will…

then returns will be 25-40% of sales vs. 8-9% in actual stores.

Landscape for Retailers

• Returns will continue to grow in volume and rate

• E-Commerce will grow as a % and drive overall return rates.

• Retailers will continue to enable returns with the customer

• OEM’s will look to limit their liability

• Regulations will become more onerous.

• Expenses will continue to grow

• Consumers desire for good secondary market product

The Next 5 Years

The Next 5 Years cont.…• Interactive Experience Predictor

(IEP)

• Out-of-Box Experience (OOBE)

• Human Factor Engineers (HFE’S)

• Net Promoter Score (NPS)

• The Reverse Logistics Association– Promoting returns solutions

Questions

Consumer behavior continues to shift:• Ecommerce growing 15% annually

• Ecommerce sales ~$500B by 2018

• 20-30% customer return rate

• Brick and mortar stores shifting to omni-channel

• Buyers expect no-hassle, cross-channel return policies

Customer Returns ~$450B in 2017:

• US GDP = $18T // US Retail = $5T

• 3% of the US economy // 9% of US Retail

• 95% sold on the secondary market

• 400M additional units returned in 2017 from ecommerce alone

RIPPLE EFFECT

What impact is this having on warehouse space? Human resources? 3rd parties? Technology developments? Tracking &

data analysis? Policies? Etc.

eCommerce Growth and Customer Demand Drive Need for

Returns Solutions

The Colography Group, Inc.

March 2017

Prepared ForPostal Vision 2020 7.0

The Colography Group, Inc. PostalVision 2020 7.0 | March 2017 | 2

Company Overview

• The Colography Group, founded in 1983, is a technical research,publishing and consulting company that specializes in the transportationmarket.

• The Colography Group conducts ongoing quantitative empirical researchon shipping establishments all over the world. Since its inception, TheColography Group has interviewed more than 600,000 facilities in 16countries to develop conclusions about the transportation market.

• The methods developed and used to amass shipping data represent allshippers proportionally and is arguably the industry’s most robust set ofdata on the shipping market.

• Our years of experience in sampling the transportation market results, inany given year, statistical confidence levels greater than 90%.


How are goods returned?

• Of returns that were originally shipped to the customer, 60% of the returns are shipped back either to company or to a 3rd party.

• A large portion of customers make use of taking returns in person to a business location -accounting for 40% of returns.

60%Shipped

40% In Person

Source: The Colography Group’s Business Returns Market Survey ©2016 CGI all rights reserved.


Where are the shipped returns going?

• The retail industry accounts for a majority of all returns with 55% of the returns being shipped back to retail businesses.

55%Retail

45% Other: Mfg., Whl., Other




What are the reasons for returns?

40%

exchange

20%15%

10%

ordererror

damage/defective product

other

15%

repair/ maintenance

• The most likely reason for having a return is to exchange an item purchased.



• For the majority, the business selects the shipping provider for returns.

• Most often, the company considers the reason the item is being returned to determine who pays for the return shipping.

Business SelectsShipping Provider

Customer SelectsShipping Provider

25%

75%

Reason Is A Factor

80%

Reason Is Not A Factor

20%

Who is controlling and paying for the shipped returns?


Example Of Retailer’s Return Shipping Policy: Williams-Sonoma

Damaged or incorrect items Buyer's remorse

Who determines

return shipment carrier

Return shipment

carrier options

E-Mail return

label option No No

Carrier pickup

return shipment option Yes Yes

Who pays for

return shipment Recipient

Recipient return

shipment charge N/A

$6.50 for small packages

$13.25 for large packages

Reasons for returning an online order

Source: Williams-Sonoma.


Returns Trends

Large retailers would prefer returns be taken to a retail store.

Items with a low price point are not worth returning.

Some etailers offer cheaper prices in exchange for not

allowing product returns.

Using the offer of free returns helps businesses to promote

certain products. FREE

$


Thank You

Darren LambThe Colography Group, Inc.

47 Perimeter Center East, Suite 600Atlanta, GA 30346

678.385.2500www.colography.com

[email protected]

© 2017 Optoro, Inc. Proprietary & Confidential

DISTINGUISHING FACT FROM FICTION IN RETAIL RETURN TRENDS

P O S T A L V I S I O N 2 0 2 0

March 2017

Larisa Summers, SVP eCommerce & Digital Marketing, Optoro

P O S T A L V I S I O N 2 0 2 0

WHAT’S A FACT, AND WHAT’S FICTION?

© 2017 Optoro, Inc. Proprietary & Confidential 2

Millennial shoppers

have unique needs

Liquidation solves

returns problems

Omni-channel leads

to complications

Amount of returns is

increasing

Preventing returns

is a priority

P O S T A L V I S I O N 2 0 2 0

AMOUNT OF RETURNS IS INCREASING


Fact

E-COMMERCE HAS MUCH HIGHER RETURN RATES … LEADING TO HIGHER RETURNS VOLUMEReturn rates, bricks vs eCom1 Returns value as % of total retail sales2

Brick & Mortar

5% - 10%

eCommerce

18% - 35%

7.6%7.1%6.7%6.4%6.0%

20182016 202020192017

Retail leaders and investors note growing focus on the

cost of ecommerce returns…[and] the need to minimize

the cost of returns without losing the customer. - Goldman Sachs

Seventh Annual dotCommerce Takeaways, 6/17/16 1Multichannel Merchant and The Retail Equation2Optoro analysis

http://multichannelmerchant.com/opsandfulfillment/growth-ecommerce-returns-will-drive-facilities-demand-15032016/

https://www.theretailequation.com/Retailers/IndustryReports

P O S T A L V I S I O N 2 0 2 0

“OMNI-CHANNEL” CAUSES COMPLICATIONS


Fact

42%online orders shipped from store

Source: Wall Street Journal

90%online orders returned at store

http://www.wsj.com/articles/home-depot-touts-use-of-stores-for-online-fulfillment-1471550919?

• Make more purchases online

• More likely to interact with brands across

multiple device types (PC, smartphone,

tablet)

• More likely to make a new purchase when

processing a return on the web

P O S T A L V I S I O N 2 0 2 0

MILLENNIAL SHOPPERS HAVE UNIQUE NEEDS


Sources: Pew Research, UPS Pulse of the Online Shopper

Fact

These ‘tech natives’ will become even more prevalent in

years to come, as Generation Z emerges with even

more of the same tendencies.

- UPS Pulse of the Online Shopper, 2016

http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=FactSheets&id=1465325363052-863

Loyal Customers

Other Customers

80%

20%

Revenue

P O S T A L V I S I O N 2 0 2 0

IT’S IMPORTANT TO PREVENT RETURNS WHENEVER WE CAN


82%

92%

More likely to makeinitial purchase if

there are free returns

More likely to makefuture purchase if

initial returnexperience was easy

The top reason why consumers who shop only at physical

stores do not shop online is the perception that the returns

process will be a hassle.

– The Evolving Logistics Landscape and the U.S. Postal Service

RETURNS EXPERIENCE CREATES

CUSTOMER LOYALTY

AND LOYAL CUSTOMERS ARE

BETTER CUSTOMERS

FICTION

Sources: USPS Research, Loyalty

https://www.uspsoig.gov/document/evolving-logistics-landscape-and-us-postal-service

http://loyalty.collectapps.io/customer-loyalty-guide

P O S T A L V I S I O N 2 0 2 0

INVENTORY LIQUIDATION SOLVES RETURNS PROBLEMS


MYTH

Less than 40% of returns end up being liquidated… … remaining inventory has tremendous hidden cost

Liquidation Other RTV RTS

~ 25% of

value

Sources: Optoro market research and analysis

P O S T A L V I S I O N 2 0 2 0

WHAT’S A FACT, AND WHAT’S FICTION?


Liquidation solves

returns problems

Millennial shoppers

have unique needs

Omni-channel leads

to complications

Amount of returns is

increasing

Preventing returns

is a priority

P O S T A L V I S I O N 2 0 2 0

WHERE CAN RETAILERS FOCUS TO SUCCEED?


• Embrace e-commerce as a growing trend

• Consider how RL can help with omni-channel fulfillment

• Remember the importance of returns for CX and sales

• Keep the full cost of returns in mind, not just recovery

Postal Vision 2020

March 22, 2017

David Lione

OpenMarket PowerPoint Template 2

80% of companies believe they are

providing a good customer experience

Only 8% of consumers agree

Source: Harvard Business Review


Mobile has fractured the consumer journey into hundreds of real-time, intent-driven micro-interactions.

SMS, better known as text messaging, is the only channel that’s optimized for this challenge

The first phase was P2P (person to person) - texts to family, friends, or colleagues, which have been growing steadily for over a decade.

Now, we’re in an enterprise shift, where A2P (application to person) SMS delivers automated text alerts at precisely the right time for literally hundreds of use cases, across each industry vertical.

We call it The Empathetic Interaction, and it’s changing the way companies engage with their customers.


EmpatheticInteractions

The Empathetic Interaction is all about seizing the countless invisible opportunities to help your customers whenever they need to know, decide, remember, or do something just when they value it most.


That moment when…

…You saved your customer a

trip to the post office because

you let him redirect the

package to his neighbor –

with a simple text.


Virtually all We read 95% Millennials

95%

77% of consumers like companies that text!

mobile plans include SMS

of text messages within 3 minutes

text more than they call or email

is overtaking voice for customer service

SMS

Businesses can text-enable any 800 number, so consumers get quick answers and call centers reduce costs

Thank You

[email protected] pvsurvey to 10991 to win a $10 Starbucks gift card!

[email protected]

“customer-centric ecommerce –part 2” - postal vision 2020 · “customer-centric ecommerce...

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