Curing The Holiday Hangover: Descartes, Swanky and Starshipit on The Future of Returns in Ecommerce

This panel, “Welcome to the Holiday Hangover: Handle Your Returns Like a Pro,” brought together three seasoned experts for an insightful conversation:

• Sean Clancy, Managing Director of Swanky’s ANZ office, a full-service Shopify Plus agency dedicated to helping brands scale.
• Hakan Steele, Partner Manager at Starshipit, ANZ’s leading integrated shipping and returns platform.
• AJ Lockington, Marketing Director for Ecommerce Solutions at Descartes.

The discussion focused on the challenges and opportunities of managing ecommerce returns, particularly during the holiday season, the mismatch between consumer demands and operational realities, and finally the trends we are likely see in the space moving into 2025.

Why is this such a relevant issue?

Ecommerce returns, with rates as high as 40%, are a costly challenge for online brands, compared to the 8-10% return rate for in-store purchases. The holiday season magnifies this, with up to 60% of returns occurring after peak shopping periods. Factors driving up the financial burden include:

• Rising transportation and labor costs
• High customer expectations set by industry leaders like Amazon
• Liberal return policies and free returns
• “Bracketing”—purchasing multiple sizes with plans to return some
• Increasing fraudulent returns

Aligning customer expectations with operational realities

Modern customers demand the world when it comes to returns: free returns, extended windows, omnichannel options, instant refunds, and real-time updates. However, retailers face serious hurdles trying to meet these expectations such as legacy IT systems, manual workflows, high reverse logistics costs, and a lack of real-time inventory visibility.

What can retailers actually do?

The panel highlighted strategies for reducing costs while maintaining customer satisfaction:

• Adopt technology: Returns platforms (e.g., Starshipit, Loop) and warehouse systems (e.g., Peoplevox) automate workflows and provide actionable data.
• Optimize warehouse operations: Implement paperless processes and train staff to accelerate returns and restocking.
• Innovative solutions: “Try before you buy” models from the likes of Try With Mirra and international returns hubs cut shipping costs and improve convenience.
• Transparent communication: Keep customers informed with clear updates and flexible refund options.
• Analyze returns data: Identify root causes (e.g., unclear product descriptions or sizing issues) and implement improvements.

The trends we are likely to see next

The trio move on to identify emerging trends that ecommerce brands could leverage:

• Instant refunds to boost loyalty and repeat purchases.
• “Try before you buy”: Reduce purchase friction and returns.
• Streamlined international returns: Use 3PLs to cut costs and improve efficiency.
• Circular economy: Invest in repairing, refurbishing, and recycling returns to reduce waste.
• Order editing: Allow customers to correct errors pre-shipment, reducing unnecessary returns.
• Empowering customers: Self-service options like order edits enhance the experience.
• Paperless returns: Boost efficiency and accuracy.
• Personalization: Customized products reduce return rates and enhance brand loyalty.

Our Big 5 Takeaways

1. Returns are both a challenge and an opportunity. Use them to build loyalty through stellar service and communication.
2. Technology is key to optimizing returns. Automation improves efficiency and data-driven insights.
3. Warehouse efficiency is crucial. Quick returns processing supports resale and inventory management.
4. Innovate to reduce costs and enhance customer satisfaction. Solutions like “try before you buy” and returns hubs are game-changers.
5. Future returns processes must prioritize the customer. Flexible options, clear communication, and empowering self-service will drive success.