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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.
Trending in Operations
The partnership brings together subscriptions and shoppable content.
Roku and DoorDash are teaming up to connect TV and food delivery in one experience.
The news: Roku and DoorDash announced a new partnership that will allow people to order food delivery from a shoppable ad on their TV. Along with the capabilities being put in place by the tech platforms, Wendy’s is also adding shoppable content that will provide a discount on ordering at launch.
How does it work? For Roku account holders, there are three parts to the partnership:
DashPass: DoorDash is providing a complementary six-month DoorDash subscription. Called DashPass, this provides $0 delivery fees on orders from restaurants, grocery and retail stores on DoorDash’s marketplace.
Shoppable ads: Roku viewers will be able to click from their remote to order straight from ads on Roku via offers provided through DoorDash. For the first year, DoorDash will be the exclusive ad solution provider for restaurants on its marketplace to buy shoppable ads on Roku. With this, restaurant advertisers will also be able to work with DoorDash to attribute, target and measure TV streaming ads.
Wendy’s: The companies said Wendy’s also upped its digital capabilities as part of this partnership. The chain will make offers available through the shoppable ads. At launch, it will provide $5 off any Wendy’s purchase of $15 or more.
Key quote from Rob Edell, GM and head of consumer engagement at DoorDash: “While this offer unlocks DashPass benefits and perks for Roku users everywhere, it also provides our merchant partners with an opportunity to promote DoorDash offers through TV streaming. Consumers can conveniently and affordably get the best of their neighborhood delivered to their door, while brands can reach diners at the right time and drive instant conversion from the comfort of the living room.”
What it shows about commerce
The partnership is a sign that several different strategies being employed in digital media and commerce are converging:
Streaming and delivery: Watching TV and ordering food is a common behavior. In fact, Roku research indicates that one in three users order takeout or food delivery weekly. The partnership shows how there is room for the platforms that provide each of these distinct services to work together. It's a reminder not just to monitor how customers use your product, but what other products and services they use with it.
Shoppable ads and subscriptions: As digital commerce grows, there’s interest in reducing the steps between when a user thinks about making a purchase, and when they actually click “Buy.” This partnership does that in a couple of ways. With shoppable ads, Roku viewers can order directly from their TV, and even within the show they are watching. Switching devices may be a barrier, however small, to a sale. On DoorDash’s side, putting a subscription in place means users don’t have to think about logging in or consider delivery fees. This shows how introducing more interactive capabilities to streaming can open up new opportunities for commerce. Roku data shows that 36% of its users are interested in receiving interactive offers, such as a scannable QR code or text message. Such capabilities allow users to take action without switching screens.
Retail media and CTV: On the advertising side, the partnership is connecting DoorDash’s ad network with Roku’s content capabilities. DoorDash operates as a marketplace, while Roku serves ads during streaming content. Both have powerful customer data. DoorDash has purchase-level, or first-party, data. Roku has data on millions of customers, and the ability to reach them while they are doing the common activity of watching TV. The platforms also both have the ability to target users and measurement capabilities that can make this whole system even more powerful. While this partnership sets out one way the companies will work together immediately, it’s a safe bet that the partners will find other areas of mutual benefit to explore.
Further reading: It’s just the latest move by Roku to bring shoppable content to the platform. Last year, the streamer partnered with Walmart to pilot direct ordering straight from shoppable ads.
Is Amazon next? Break down the individual parts of this partnership: Subscription, delivery network, marketplace, streaming platform, advertising capabilities. Amazon owns each of these, and it even has a restaurant delivery partnership with Grubhub. Will it put these parts to work in a similar way? The better question may be, how long until it does so?