30 million unwanted presents will be returned over Christmas, with the majority on Boomerang Thursday.
Although click and collect is on the rise, around 600,000 Christmas presents ordered for home delivery on Cyber Monday will need to be redelivered. An estimated 30million unwanted presents (worth over £0.5billion) will be returned over Christmas, with the majority on Boomerang Thursday (the first Thursday after Christmas).
These figures have been estimated by LCP Consulting a specialist consultancy in business operations and supply chain management strategies, who works with many of the top 10 UK retailers.
The consultancy says that this flood of returns and the need to double next day deliveries from December will put additional demands on retailers during their busiest online sales week of the year. It says that next day deliveries will be more prominent this year compared to 2013, as retailers have moved their last order dates further from Christmas.
Deliveries and customer complaints…
A recent LCP report – The Omni-channel dilemma - found that one third of UK retailers experienced an increase in complaints as customer expectations outpace retail fulfilment capability. The report also identified the need for retailers to understand where they sit in the marketplace, what they should focus on and the best model for them to adopt, using four Retail Archetypes defined by LCP. It highlights the area of customer convenience and fulfilment as of critical importance for retail leadership and differentiation.
Stuart Higgins, Retail Partner at LCP Consulting said:
“Retailers face a critical choice about where they should focus their investments to ensure success. They may attract customers by managing the front end, particularly during the critical Christmas period - but that is only half the story. How likely will they be to return when the experience doesn’t match the promise?”
Getting £0.5billion in refunds back to the customer…
Getting refunds back to customers in a timely way and the processes that are associated with these returns will also be a key challenge.
Phil Streatfield, Retail Partner at LCP Consulting explained:
“Based on these predictions, there will be over £0.5billion of refunds this Christmas - creating more pressure than ever for retailers to be slicker in managing their refund process. This will be a critical factor for future success, and become part of a new and increasingly complex battleground for differentiation.
Delivering greater convenience for customers is essential. What makes things more difficult is differing consumer definitions of convenience. For example, what is convenient for a largely home-based customer is markedly different to that for someone working in the city and restricted to office hours. This means that retailers need to create different value equations and service propositions.”
The LCP report also cites four capabilities as key for success, and of even greater importance during the busy Christmas period:
1. Consistent customer proposition - ensuring you have a uniform, aligned presentation of your offer and presence across all channels (in-store, online, mobile, app)
2. Seamless order management and customer experience - making it easy for the customer irrespective of what channel you see as a retailer (rather than what the customer sees), allowing them to process and manage their order the way that suits them in one place
3. Fulfilment excellence - how you make fulfilment consistently high quality regardless of how the customer chooses to shop and have their products delivered
4. Effective Personalisation - understanding the identity of the individual customer and being able to tailor your offer accordingly (both to their interests, the device they’re using and how they want to interact with your brand)