Procurement · 18 May 2016

Online retailers grapple with the rise of the “serial returner”

Online shopping
Spending via digital channels grew by 14.1 per cent year-on-year in 2015, making the serial returner a pressing issue for online retailers

Britain’s smaller online retailers are struggling to cope with the pressures on business caused by “serial returners” – those consumers who deliberately over-order on goods and return items.

These consumers take advantage of free returns policies to the extent they ultimately put small online retailers at a disadvantage, as business owners struggle to strike the right balance between remaining competitive and protecting their profit margins.

New research conducted by Barclaycard found that nearly six in ten online retailers were negatively impacted by customer returns in the last 12 months, whilst one in five admitted to having to increase the price of products to counteract the cost of returns.

The increasing rate of returns has presented a number of challenges for online retailers, just as the popularity of online shopping continues to rise. Spending via digital channels grew by 14.1 per cent year-on-year in 2015, compared to just 1.1 per cent in-store.

Attracted by the speed and convenience with which items can be bought and returned, 30 per cent of online shoppers admitted to being “serial returners”, while nearly 20 per cent said they had ordered multiple versions of the same item to make up their mind at home.

The ever-growing number of ways shoppers can choose to conveniently return items, such as the hourly drop-off services of some retailers and local drop-off points, has also added to the trend.

Customer solutions director at Barclaycard Global Payments, Sharon Manikon, said that smaller retailers faced a “dilemma” as the need to keep pace with consumer demands meets the need to protect the business’s bottom line.

“It’s hardly surprising that this new breed of online shopper – the serial returner – is starting to emerge. There is light at the end of the tunnel with many ways retailers can streamline the returns process. From developing universal sizing to offering virtual dressing rooms, the key for business owners is to determine which innovation works best for them – while ensuring they don’t lose out to more savvy competition,” added Manikon.

Britain’s small online retailers are falling behind their European rivals in terms of international sales. Read on to find out why.

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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