With the holidays moving to the rearview and a new year upon us, returns season is in full swing. As the refunds and exchanges come in, the companies that power ecommerce are rolling out new ways for customers to more easily send items back.
Returns have grown right alongside ecommerce over the last several years. While the National Retail Federation projected a decrease in the online return rate for 2022 from 20.6% to 16.5%, there are signs that the 2022 holiday shopping season is bringing an influx. Salesforce predicted a returns “tsunami” for the season, while Loop saw DTC brands using its platform saw records.
Returns are a tricky area for brands. On the one hand, offering flexible policies like free returns and home try-on allows brands to offer a great experience. But returns also present logistics challenges and can eat into profitability. Hanging over all of it is the environmental consideration of using less packaging, reducing waste and lowering transportation mileage.
With innovation, the goal is to strike a balance between these interests. Below are three examples of how ecommerce platforms and logistics companies are creating new ways to make returns, and what they mean for consumer, business and climate imperatives.
DoorDash: Package Pickup
The details: On Wednesday, on-demand delivery marketplace DoorDash debuted its hack for returns: A driver will bring a prepaid package to a local UPS, FedEx or USPS location. Called Package Pickup, the feature is accessible on the DoorDash homepage, and the service will deliver up to five packages per $5 order.
What it addresses: For consumers, this is all about convenience. They already didn’t have to leave home to shop for an item, and now they don’t have to leave home to make a return. On the logistics side of the equation, it positions DoorDash at a point between carriers and consumers. Undoubtedly, the service is helping DoorDash unlock new ways to use its platform. But it also could help to solve problems for carriers and logistics operations that are facing heavy volumes of returns.
FedEx: No-box, no-label
The details: Starting this year, FedEx will allow consumers to drop off items at one of 2,000 FedEx Office locations without a box or label. Returns will be processed using a QR code. Called FedEx Consolidated Returns, the option will be available through participating merchants. FedEx will consolidate the items with returned products from others, then routed to send back to merchants.
What it addresses: For consumers, this removes two steps from the returns process: packing a box and printing label. In the case of finding a box, it also removes what is usually a hassle. For brands and retailers, FedEx touts that it is a low-cost returns service that provides a way to offer a good experience to merchants. By putting returns together and optimizing transportation, it could also use less energy than a single-package return.
Amazon: Box-free returns at stores
The details: As the market share leader in ecommerce, Amazon has also made logistics a key part of its operations. It has continuously innovated to balance customer experience, and solve its own challenges in the movement and delivery of goods. In a recent post, the company shared its own existing box-free return program that is activating its network of stores, and partnering with others. This service allows consumers to get a QR code through the Return Center on its site. Then, they can drop off an item at Amazon physical stores, Whole Foods, Kohl’s or UPS Store locations. Some Staples locations were also added as a drop-off point over the holidays.
What it addresses: Amazon was one of the earliest companies to offer free returns, and box-free returns only adds to the ease of that process. It’s worth noting that there are actually two returns innovations here: box-free returns and expanded drop-off points to stores outside of Amazon's network through partnerships. Customers benefit from both in the form of easier returns. Meanwhile, stores get a visit from shoppers who may be apt to buy something else as they make a drop. This means retailers may have opportunities to merchandise around the dropoff points. Call it buy online, drop off in store.
The bottom line
Innovation will keep pushing consumer expectations forward. Free returns were already becoming table stakes. The latest developments indicate that a wider number of options to get items back to retailers – particularly box-free returns – could follow.
