Navigating the Challenge of Returns

Navigating the Challenge of Returns

In the ever-evolving landscape of online retail, minimizing returns has become a top priority for businesses operating in Germany, Austria, and Switzerland (DACH). This concern is shared globally, as highlighted in a study conducted by the German retail institute EHI. While the DACH region grapples with return costs averaging between 5 and 10 euros per item, a similar challenge is faced by online retailers worldwide.


Return Landscape in DACH

The EHI study reveals that online retailers in the DACH region are actively addressing the impact of returns on their operations. With return percentages varying across industries, fashion and accessories take the lead, with return rates ranging from 26 to 50 percent. The intricate nature of the fashion industry, where customers often order multiple sizes for selection, contributes to this trend. This selection process is acknowledged as part of the business model, with many fashion players accommodating and even facilitating it.

Return costs also exhibit a wide range, with the home and interior category experiencing return costs that can double the average. The study emphasizes that, for 64 percent of online retailers surveyed, covering the costs of return shipping is the norm. However, major players like H&M and Inditex (Zara) are gradually shifting this paradigm by reversing the practice in certain countries.

Key Measures to Tackle Returns

To mitigate the impact of returns, online retailers in the DACH region are implementing various measures. Detailed product information is identified as a crucial tool by 86 percent of respondents, enabling customers to make more informed purchase decisions. Additionally, secure packaging, contact options for personal advice, and address verification are recognized as essential components of the strategy to reduce return percentages.

A significant portion of online retailers (70 percent) actively tracks the reasons behind returns to tailor appropriate countermeasures. The inspection and quality control of returned items emerge as the primary cost driver for 56 percent of respondents, highlighting the importance of efficient post-return processes.

Global Trends in Online Returns

While the DACH region grapples with these challenges, global online retailers face similar issues. The GfK survey indicates a shift in consumer behavior, with Germans spending 17 percent less online compared to the previous year. This shift may be attributed to a preference for in-person shopping, suggesting a dynamic interplay between online and offline retail experiences.

In conclusion, the impact of returns on online retailers is a global concern, with the DACH region serving as a microcosm of challenges faced by businesses worldwide. By prioritizing detailed product information, efficient post-return processes, and proactive tracking of return reasons, online retailers can navigate the complexities of returns and enhance the overall customer experience. As the landscape continues to evolve, adapting strategies to address return challenges will remain a critical aspect of successful online retail operations.

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