Pitney Bowes Survey: Returns Cost US Online Retailers 21% of Order Value
April 14 2022 - 9:00AM
Business Wire
While more than two-thirds of retailers are
taking action to lower transportation and processing costs,
decision-making authority for returns improvements is split inside
retail organizations
Pitney Bowes (NYSE:PBI), a global shipping and mailing company
that provides technology, logistics, and financial services, today
released new findings from its BOXpoll surveys, indicating that US
online retailers face significant logistical and financial
challenges due to the high cost and increasing number of ecommerce
returns.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220414005151/en/
BOXpoll: Returns are eating into retailer
costs (Graphic: Business Wire)
According to the BOXpoll survey of medium and large-size digital
and omnichannel brands, online returns cost retailers an average
21% of order value, with several brands reporting ratios
considerably higher. The financial burden is compounded by the fact
that ecommerce return rates are at historic highs—an average of
20.8% in 2021 versus 18.1% in 2020, according to the National
Retail Federation.
“One of the grand ironies of ecommerce is that both retailers
and consumers struggle with returns because each sees the other as
making the process more difficult,” said Vijay Ramachandran, VP
Market Strategy for Global Ecommerce at Pitney Bowes. “Three
out of four consumers say their recent returns experiences have
been inconvenient. At the same time, more than two out of three
retailers say they’re actively trying to lower the cost of returns.
This means brands have yet to find an effective balance between
returns convenience and cost. Dialing up the ‘right’ balance will
be different for every brand based on what they’re selling and who
they’re selling to. This is what we’re working with our clients to
solve using market intelligence from our BOXtools platform.”
According to the BOXpoll survey, 70% of retailers say they are
actively trying to lower the cost of returns by addressing
transportation and/or processing costs. However, this goal is
complicated by shared accountability for returns strategies. The
survey found that while 42% of retailers give their
logistics/operations leaders final authority on selecting a returns
transportation vendor (with the remainder split between customer
care, ecommerce, procurement, marketing, and IT functions), only
25% give operations leaders the same authority for selecting
returns technology vendors. This division of responsibility is more
likely to create gridlock when it comes to decision making.
“We know from listening to our clients that our uniquely modular
combination of returns technology and logistics services gives
brands the flexibility to find a better balance for their returns
strategy,” said Ramachandran. “Our research has found that
software-only or logistics-only point solutions create wedges
inside organizations by fracturing decision-making among different
functions. These teams could collaborate more effectively with
holistic, modular returns solutions that can be configured to
satisfy cross-functional needs—such as offering your most loyal
customers more convenient options or opportunistically expediting
only the return of items with limited stock. After all, consumers
don’t differentiate between software and logistics services—they
only see ‘experience.’”
These findings lay the foundation for a forthcoming series of
BOXpoll surveys of both online retailers and consumers that will
explore the best balance of convenience and friction for returns
processes.
The BOXpoll retailer surveys are conducted by Pitney Bowes with
Cipher Research. The retailer trends outlined in this release are
based on a sample of 168 US online retailers surveyed in February
2022.
Consumer Perceptions of Delivery Speed While the
significant increase in online shopping due to the pandemic has
impacted return rates, it has also influenced consumers’
perceptions of delivery speed. To understand how consumers’
perception of speed has changed over the past two years, Pitney
Bowes launched several BOXpoll consumer surveys, revealing:
- In October 2020, shoppers had come to expect delivery delays
due to COVID-19, and their definition of “fast” shipping was slower
than it had been pre-pandemic.
- By late April 2021, consumers’ definitions of “fast” had slowed
further, extending by about one-third of a day for most product
categories.
- As of February 2022, BOXpoll surveys had found the definition
of “fast” has shifted back to similar expectations from October
2020—but remains slower than pre-pandemic expectations. The
current definition of “fast” is 3.1 days for all products in
general.
Methodology BOXpoll by Pitney Bowes, part of the BOXtools
insights platform, is a weekly survey on current events, culture
and ecommerce logistics. Morning Consult conducts weekly consumer
polls on behalf of Pitney Bowes among a national sample of more
than 2,000 online shoppers. The consumer interviews were conducted
online, and the data were weighted to approximate a target sample
of adults based on age, educational attainment, gender, race, and
region. Results from the consumer surveys have a margin of error of
+/- 2 percentage points. Cipher Research conducts periodic surveys
on behalf of Pitney Bowes among a national sample of more than 150
digital and omnichannel brands fulfilling more than 25,000 online
orders per year. The results included in this press release are
extracted from surveys conducted over the past two months. Visit
www.pitneybowes.com/boxpoll for the latest BOXpoll findings.
About Pitney Bowes Pitney Bowes (NYSE:PBI) is a global
shipping and mailing company that provides technology, logistics,
and financial services to more than 90 percent of the Fortune 500.
Small business, retail, enterprise, and government clients around
the world rely on Pitney Bowes to remove the complexity of sending
mail and parcels. For the latest news, corporate announcements and
financial results visit
https://www.pitneybowes.com/us/newsroom.html. For additional
information, visit Pitney Bowes at www.pitneybowes.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220414005151/en/
Brett Cody, Pitney Bowes, (203) 218 1187, brett.cody@pb.com
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jul 2023 to Jul 2024