There’s been so much talk about the state of returns, but maybe not nearly enough around shipping. But both services are becoming equally important.
The concept of shipping and returns has evolved into an immersive experience. Shipping has influenced the decisions of many shoppers considering whether to engage with a retailer. Returns have also emerged as a pivotal determinant.
Earlier this month, PYMNTS talked with Loop’s CEO, Jonathan Poma, about the status of returns and what retailers must contemplate to recoup their expenses.
“If you want to charge you better be damn sure you’re delivering an exceptional returns experience and exceptional purchase experience,” he said.
For Poma, returns have evolved into a crucial aspect of a transaction. When executed correctly, they can motivate consumers to revisit, make additional purchases and foster loyalty.
Read more: Loop CEO Says Returns Experience Now Drives Brand Loyalty
But the same can be said for shipping, in which retailers have increasingly removed their “free shipping” perk that dates back to the early eCommerce boom.
To maintain competitiveness, retailers have adopted the practice of offering complimentary shipping. As indicated in a study conducted by PYMNTS and sticky.io titled “Subscription Commerce Readiness Report: The Loyalty Factor,” 42% of participants said discontinuing free shipping would motivate them to terminate their retail product subscriptions. This percentage exceeded the portion of respondents who pointed out any other rationales for canceling their subscriptions.
Read more: 42% of Retail Subscribers May Bail if Merchants Ditch Free Shipping
Nevertheless, more retailers are choosing to implement fees for exchanges, refunds, and store credit. According to Poma, 57% of merchants have introduced some form of return fee. This is a reaction to the fact that U.S. customers return about 3.5 billion products every year, but only 20% of these items are actually defective.
Interestingly, Poma said, this hasn’t changed consumer behavior. Customers seem to comprehend the merchants’ need to recover expenses and are prepared to pay return fees, provided they continue to receive an outstanding returns and purchasing experience.
“I think there’s like a quid pro quo that is, ‘Hey, as long as I’m getting a great experience, I don’t mind paying,’” Poma said.
Taking consumer sentiments and the state of shipping and returns into consideration, online retailer REVOLVE has introduced several incentives to encourage customers to choose deferred shipping instead of their standard two-day air shipping, which remains free.
Customers who opt for the three-to-five-day shipping option will be rewarded with 100 loyalty points.
This motivates customers to enroll in the REVOLVE loyalty program and establishes a program applicable across REVOLVE’s eCommerce platforms, REVOLVE MAN and FWRD.
Beyond encouraging sign-ups, the move could be a cost saver as fast shipping costs more. Furthermore, consumer behavior and preferences are evolving. Many shoppers prioritize convenience, but there is also a growing segment that values conscious consumption, thoughtful decision-making, and sustainable practices. By offering different shipping options, retailers cater to varying consumer preferences.
Another way to combat shipping prices is buy online, pick up in-store (BOPIS). In May, PYMNTS reported that when it came to delivery versus pick up, it came down to money.
As of the end of 2022, an average of 131 million individuals throughout the nation received monthly online retail deliveries, as indicated by PYMNTS’ “12 Months of the ConnectedEconomy™” report. More than half of the consumers making purchases on a retail merchant’s website chose the option of having their orders delivered to their homes.
The percentage of U.S. online shoppers who chose BOPIS and curbside options for their latest purchase increased from 23% in 2021 to 32% in 2022.
Read more: Delivery Versus Pickup Preference Comes Down to Money
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