Shoppers typically think of a retailer’s ecommerce site and brick-and-mortar location as extensions of the same store. They may shop through a single channel or buy-online-pickup-in-store (BOPIS) or buy-online-return-in-store (BORIS). Regardless, they expect to have similar experiences whether they’re online or in-person. They also expect each transaction to feel like part of a single, ongoing conversation instead of disparate interactions.
Yet, many retailers operate their ecommerce website separately from their retail stores, offering a different assortment of products, pricing, and inventory online compared to their brick-and-mortar locations. They even manage the shopping data independently, adding complexity as each channel operates with limited visibility into a consumer’s complete transaction history. The result is a fragmented view of the consumer.
Let’s examine how a lack of visibility into omnichannel transaction data increases risk and complexity when managing all returns regardless of channel.
Returns Without a Receipt (From an Online Purchase)
Many consumers prefer to return an online purchased item in their local store rather than shipping it back to the retailer. This can present several challenges which are even more difficult when a customer has purchased the item online. Without a receipt, store associates may not be able to identify the date of a transaction, who made the transaction, the price paid, if any discounts were applied, or the payment type. Each of these elements can have a material effect on determining the appropriate amount of the refund. Confirming at minimum the date of purchase, can help determine the price the product was selling for on that day, but if the associate can only see the consumers in-store activity, they won’t have the details of the transaction. They won’t know if the consumer used any coupon codes, credits, or other offers to purchase the item at a lower price. With limited or no visibility into the shopper’s history, the merchant has no recourse but to refund the full retail price of the item.
Without a holistic view of consumer activity across channels, marketers lack an easy way to evaluate the true value of a shopper. Equally important, without complete transactions data, marketers are unable to tailor specific promotions that would inspire more frequent purchases, fuel higher conversion rates, or drive online buyers to use BORIS or BOPIS. Additionally, marketers do not have a way to flag and exclude shoppers with past abusive or fraudulent behavior from promotional campaigns.
Accurate Consumer Identification (Wherever They Shop)
Without common identifiers or technology systems across the channels, it’s complicated to reconcile consumer history. Basic identifiers for in-store and ecommerce are often different. While in-store has traditionally relied on name and residential address (validated by driver’s license or loyalty club membership), ecommerce businesses have utilized email addresses, unique user IDs, cell phone numbers or hashed account numbers. This has made creating an omnichannel profile much more difficult. Without a holistic view of consumer activity across channels, marketers lack an easy way to evaluate the true value of a shopper. Equally important, without complete transactions data, marketers are unable to tailor specific promotions that would inspire more frequent purchases, fuel higher conversion rates, or drive online buyers to use BORIS or BOPIS. Additionally, marketers do not have a way to flag and exclude shoppers with past abusive or fraudulent behavior from promotional campaigns.
Return Policy Enforcement
Return policies often vary for online vs. in-store shoppers. Shoppers may request an extended return period as a “loyal and long-time consumer,” but without a singular database of transaction data, neither an ecommerce service rep nor a store associate are able to see the shopper’s complete transaction and loyalty information. So, when the call center rep or store associate looks up the shopper, they are often limited to one view or the other, not seeing the full customer picture. Additionally, many retailers have cobbled together multiple systems, setting the stage for a complex omnichannel returns process requiring multiple steps.
Return Shipping Costs Add Financial Pressure
Given that over 66% of consumers are shopping with retailers through more than one channel, retailers need to understand the full picture of purchases, returns, and claims. Mitigating return shipping costs is essential for online retail – especially for the 49% of retailers that offer free return shipping. While brick-and-mortar retailers can promote buy-online-return-in-store (BORIS), pure ecommerce players have engaged in partnerships to use free drop off locations such as Kohl’s, Walgreens, and UPS. This increases the pressure for omnichannel retailers to reduce return shipping costs which cut into profits and are costly to the retailer’s bottom line.
Thus, retail finance departments seek ways to defray such costs without irritating consumers. A key point in these financial discussions is that 99% of consumers are honest and only 1% have fraudulent intent. CFOs want to move towards dynamic return policies to help prevent fraud while not losing good consumers with overly strict policies. However, retailers can only adopt consumer-based return authorization once they can consolidate omnichannel data to truly understand the value and risk of specific shoppers.
The Focus on Omnichannel Identification
Retailers can solve these (and other) challenges by using a unique identifier for each consumer that allows the authorization system to create a single view of all returns across channels. Some retailers adopt a “customer ID” while others create a loyalty program to track shoppers individually.
For BORIS, stores requiring credit or debit cards for returns can tie the information to the customer ID to create a return history. Other returns can link the forms of ID used in the various channels, such as ship-to-name and address. Retailers can also require online shoppers to create an account, which then links the purchases and returns to their account.
Reducing fraudulent returns is a complex challenge that requires tighter alignment of data across all channels. Deploying technology that allows you to identify shopper behavior and value across channels will enable better alignment and enforcement of return policies, reduced fraud, improve consumer experiences and protect the bottom line.
