SKOPOS - Internet research / panels



The Problem with Online Sales Returns
18/5/01



The number of online returns by consumers in the US could reach as many as 90 million, representing some US$5.8 billion, by 2005. This is according to new research released recently by Jupiter Media Metrix.

These latest findings reveal that, as the volume of returns drastically increases, retailers that concentrate solely on improving returns processes will miss significant cost-saving opportunities. To realise any financial benefits, Jupiter analysts believe that companies must maximise the value of reclaimed goods by improving all their reverse-logistics systems, including the collection and analysis of consumer data.

Other key findings in the report include:


  • The first step in creating an effective reverse-logistics program is to collect the data necessary to understand a consumer's reason for a return. Retailers must collect well-structured and consistent data regarding the reason for the return and the condition of the product.
  • Companies need to maintain policies that treat all return reasons uniformly, or they will risk damaging the quality of the data they collect.
  • Effective reporting and analysis of consumer data are the keys to identifying trends early in the reverse-logistics process. Improved data reporting and analysis will eventually lower the rate of returns.


"Numerous out-sourced solutions have emerged to address consumers' concerns for increased convenience and speed in dealing with returns," said Darren Bien, Jupiter analyst. "While these solutions address consumers' dissatisfaction and desires, retailers must look beyond the returns process to realise significant cost-savings. They should focus on the cost-saving benefits of an improved reverse logistics system that includes three key elements: data collection, redistribution of goods and effective reporting. Companies need to learn more about why their consumers are returning goods. The data they collect will be the only way for them to reduce returns, identify trends, and most important, quickly redistribute the goods."