Marketing

How environmentally friendly are returns? – eCommerce magazine

Sustainability is the order of the day and has not been a flash in the pan for a long time. This is also noticeable in e-commerce. Not just that 70 percent of Germans say that ethical consumption for them is an integral part of purchase considerations. According to the Otto Group’s 2020 trend study, 82 percent buy at least occasionally according to ethical principles. By the way, with ethical principles This means durable products that meet environmental standards and also take working conditions in the supply chain into account. The authors of the study come to the conclusion that ethical principles and sustainability in e-commerce (sustainable shipping for example) have what it takes to be a feature – something very special.

Sustainable shipping: that’s what consumers want

The more than 1,100 respondents for the trend study also have clear ideas about the return shipping process. 82 percent would like returns to be resold and not immediately recycled or thrown away. 63 percent are willing to pay more for climate-neutral shipping and 68 percent would boycott a manufacturer if it offered employees poor working conditions.

Resales market and returns

Companies that act sustainably can score points with consumers. This is particularly evident in the steadily growing resales market. Platforms such as Momox-Fashion benefit from the customers’ green conscience. As well as the uniqueness of the pieces.

But that doesn’t change the number of returns: “We offer all Momox fashion customers the option of returning items of clothing and accessories that do not fit or do not like, free of charge. Our return rate is slightly lower than in traditional online fashion retail. There are two reasons for this: On the one hand, we do not offer the option of ordering a product in several sizes. We deal with one-offs. This means that customers do not have the option of ordering the same trousers in three sizes or different colors. On the other hand, our articles cost less compared to new goods. The low prices mean that customers are more likely to keep the item. Even if the color of the T-shirt in the mirror at home might look a little different from the one in the photo in the shop.

Sustainable shipping
Heiner Kroke, CEO of Momox GmbH. Image: Momox GmbH

If customers decide to return an item, it is important that the original Momox fashion label is still attached to the goods. So we can offer these items again in our shop quickly and easily after they have been returned. After all, we want all items to find a new home and thus their life cycle to be extended. Items for which we have been looking in vain for buyers for two years are sorted out and recycled. Such goods are in the low single-digit percentage range, ”explains Heiner Kroke, CEO of Momox GmbH.

Although the resales market gives clothing or other products a second life, that doesn’t change anything in terms of the number of returns.

What can online retailers do to sustainably curb the return rate?

We spoke to someone who should know: Artjom Bruch, Managing Partner at Trusted Returns – a company that specializes in returns management.

What options do online retailers have to make returns sustainable?

Artyom Fraction: You have to be a little careful with this issue. Because it can quickly move towards green washing. When it looks like sustainability but it isn’t. Sustainability is not easy for online retailers as they are heavily dependent on third-party providers. For example, retailers cannot influence the last mile – it is in the hands of the CEP service providers. Online retail tends to act as an intermediary here. This means that he buys goods according to certain standards and has to ensure that the logistical process runs smoothly.

Now, however, areas come into play that were previously rather hidden in companies, such as logistics and supply chain. They are put outwards in order to present them in a positive light. Everyone who has anything to do with logistics knows that logisticians are very solid companies. The supply chain played a role primarily for the collection of internal key figures. But now it is also important for the consumer.

What’s different now?

To be honest, it’s a balancing act for online retailers. We do not yet have the situation in all areas where consumers are willing to pay more for sustainability. An example: Saturn’s advertising campaign, which was propagated in the early 2000s, is awesome. What was previously negatively affected was suddenly transformed into a positive image. With that, the company had really hit the mark. That changed the way people think. Greed was suddenly viewed positively. It is the same with environmental awareness. That is why it is now so important to actively manage sustainability. We see this above all in returns management.

Of course, it is positive if returns are prevented, especially when it comes to CO2 emissions. But the problem with this is that the return processes are still neglected. In some industries they make up a very large proportion of the total logistics costs. If around 60 percent of the packages come back, then that is not only environmentally damaging and not sustainable shipping, but also associated with high costs.

Sustainable shipping
Artjom Bruch, Managing Partner at Trusted Returns. Image: Trusted Returns

So what can online retailers do?

You have to examine exactly what is really sustainable. In the area of ​​returns management, it is precisely the prevention of logistics processes. However, if you ask a logistician whether they support this approach, they will answer “no”. Because he is preventing his business. The question now is how can we understand what consumers want in order to avoid returns. Because not every return that is sent today has to be one. If, for example, there is a return slip in the package, it is also very obvious to make a return from an ordered product. For every consumer it is of course more convenient to simply send a product back than to deal with it or to expect the retailer to deal with it. Most online retailers don’t do this because the service departments would have to be much larger. But it is important to find an individual solution.

Sustainable shipping: digitized processes help

Which path are you going with your company when it comes to sustainable shipping?

We can automate the standard returns processes to such an extent that the return rate can be actively controlled. By digitizing the process and evaluating the data streams and customer requests, you can offer what is really wanted. That is not always the return, but it can also be the case, for example, that a service technician has to be sent to the customer or perhaps has to be explained how a device is to be put into operation. Perhaps a direct exchange must also take place. Then the collection of the old product is also the delivery of the new one. Many dealers are not even aware of these options, as they would normally have to employ a large number of service personnel. This is not necessary with digitized processes.

Are there any ways to draw the customer’s attention to sustainable behavior during the online purchasing process?

You have to be very careful. In the fashion sector in particular there are now many tools, such as virtual try-ons. But when it comes to how a fabric is made, for example, you will not be able to avoid placing a selection order. At this moment, however, to persuade the customer to have a guilty conscience is rather the wrong approach from the point of view of brand building. You have to proceed in a dosed and individual manner. If, for example, a retailer finds that a customer is returning a lot, they should not threaten to block their account, but rather communicate with them. Customers who behave very differently and return very little could, for example, be rewarded. But not quietly and secretly. Bonuses should be actively marketed.

But there are already retailers who point out to consumers how much CO2 is produced when they buy. Those who come to consumers with restrictive return rules are more likely to put them off and they will wander off. Much of what initially seems logical, such as pointing out the customer’s return behavior, can be critical. Because those with whom online retailers make good sales should not be punished. Care should be taken when avoiding the volume of returns.

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