Metapack’s Delivery Conference was held at the Business Design Centre in London February 7th.
Clear Returns’ highlights of the day included an insightful introduction from Andrew Starkey, IMRG ’s Head of E-Logistics. Some key statistics came to light from his presentation including:
– 671 million online retail orders were made in 2012
– Click & Collect use may increase to as much as 50% of orders by 2015
Mike Newnham, Chief Customer Officer from the Royal Mail then revealed the results of their survey conducted over the Christmas delivery period. Some interesting insights into customer behaviour during this time surfaced from their findings.
– 15% of online shoppers return Christmas items
– 71% of customers think free delivery would encourage them to shop more
Towards the end of the day we heard from Clare Gilmartin, VP Marketplaces Europe, Ebay. Her insight into changes the e-commerce industry will go through was also a terrific presentation. Her predictions include:
– Mobile connections will surpass PC connections globally
– China will surpass the US in terms of e-commerce growth in the next 3 years
Clare also highlighted that flexible returns play a role in purchasing decisions. She stated that 63% of online shoppers look at return policies prior to purchasing and 50% shop more often with a retailer and are more likely to recommend a friend to that retailer if they have a lenient return policy. This seems like a rather risky message to send.
Nick Gomersall, Innovation and Communications Director at Metapack , delivered another brilliant presentation. His focus on back-end fraud enlightened the audience to the news that this cost is currently not being measured, which can be as much as 1-2% of total turnover.
Retailers throughout the day were being encouraged to offer free, fast, convenient delivery and lenient, flexible return policies to satisfy customer’s demands. They were also told that if customers overbuy they often end up keeping more items than they intended to. Furthermore fraudulent customers who claim their parcel wasn’t delivered tend to get the benefit of the doubt and receive another parcel immediately.
Our research shows that customers often exploit lenient returns policies to overbuy and use their bedroom as a fitting room or engage in ‘wear and return’ behaviour. If free delivery is added into the mix this kind of behaviour will almost certainly be encouraged.
Retailers need to be extremely careful and cautious before they deploy these types of strategies. Even though free delivery and returns may encourage greater sales, the true cost of around 30% of these items being returned, repackaged, reshipped and restocked must be considered.