Returns capabilities in unified commerce

Dec 06, 2023

Key takeaways

Retailers that have both physical and online stores have a huge advantage with returns over online-only competitors

Many retailers incorrectly assume that returns and exchanges for online purchases rarely happen

In-store returns get online customers in stores, convert them to multi-channel customers and build loyalty

Business applications Retail Microsoft

According to the National Retail Foundation, online purchases were returned at an average rate of 16.5% in 2022. That’s one out of every six purchases. That’s a lot of expense in shipping, packaging and human capital. So, it’s easy to see why retailers that have physical stores have a major advantage over their online-only competitors.

Retailers that fully embrace unified commerce returns will have a further advantage. Having an in-store, low-friction return experience will drive traffic to the stores and reduce anxiety for online purchases. This can increase online conversion rates and drive brand loyalty. In addition, retailers have an opportunity to convert online-only customers to multi-channel customers. Customers that interact with a retailer in multiple channels are significantly more valuable. This might explain why so many digitally native retailers are opening physical stores. 

The multi-channel returns challenge

Of course, offering returns in-store for online purchases isn’t as simple as merely having brick-and-mortar locations. The process requires careful coordination across channels for payments, taxes, prices and promotions. Aligning these capabilities can make the difference between a siloed, clunky, expensive process and a seamless, low-friction experience that drives loyalty.

Unfortunately, most retailers keep their online returns process siloed and separate. This effectively defers capabilities such as exchanges and additional sales. Many retailers settle for this because they assume exchanges or additional sales rarely happen, so they don’t merit investment. But, by leveraging unified commerce, retailers can overcome these issues.  

The unified commerce opportunity

Retailers should look beyond just handling an exception process and see the real opportunity for creating a positive customer experience. A low-friction return experience will improve brand loyalty and reduce buyer anxiety when making an online purchase. Providing this capability is foundational to gaining the customer’s trust and brand affinity.

Once the capability to establish a low-friction returns experience is established, retailers will be well-positioned to further cement customer loyalty. Executing returns well will enable the ultimate goal: to convert an online customer to a multi-channel customer. Multi-channel customers are significantly more valuable and loyal. Focusing on multi-channel conversion is a worthy long-term objective and strengthens the competitive advantage of having physical stores.

What happens next?

Providing returns capabilities from unified commerce accrues benefits to both the online channel and the physical stores. Improving customer interaction in both channels will have benefits for the retailer as a whole. Retailers should be able to identify and encourage multi-channel interactions whenever possible. These interactions are opportunities to increase brand loyalty and are another way for retailers to benefit from having a store fleet.

Connect with our team for more information on returns capabilities in unified commerce.

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