06 part 1: Understanding the international returns process for e-commerce businesses

Voiceover: 00:00:00

Welcome to Outside the Box with Asendia USA, a podcast educating US based e tailers on international shipping topics and how they can expand their global e commerce footprint.

John Walsh: 00:00:10

Welcome back to the Outside the Box with Asendia USA podcast. I'm here. I'm John Walsh. I'm here with my co host Nick Agnetti for episode six, Believe it or not already this year.

The topic today is EPAC Returns by Asendia. You know Nick and I have been in the business a long time. Returns is a huge part of any business in e comm environment.

But what you know is really is you got to be successful in the E commerce. What you got to have a.

I think the wording that we're seeing in a lot of presentations is some clarity on how the process works and how transparent it is for customers. It's a key factor in improving customer experience as well as maintaining customer loyalty I guess would be the word and improving it.

Those two factors are key to keep people from continuing to buy from you as a brand. Having your brand associated with domestic returns is one thing. Global returns is another, which is we're going to talk about today.

It's interesting to me and my background had been mostly domestic. I know Nick is primarily international but the domestic returns business is a huge business.

I know we're going to touch on some things that Nick highlighted for me earlier was obviously it's a pay for business and it's been free for a lot of years now. It's maybe paradigms maybe shift and we're going to cover that during the next 25 minutes or so. But there's a lot of changes in the return.

So we thought it'd be a good opportunity to bring on two fantastic guests to talk about this product.

We have Helen Schofield who is the CEO of Asendia Global Returns and we also have Ari Ohlone who is the EPAC returns manager for the Asendia US Group that Nick and I work with. We thought it would be great opportunity to have both of their expertise when we talk about what's going on in this, in this area.

But you know we're going to try to help you understand and the process of how returns work and assist you who have maybe already have global returns and looking for some advice or some clarity on how maybe to improve the process or if you're a brand or a company that wants to get into the providing global returns. So we think there's two things that we can help here.

But before we dive in, I pass it over to My co host, he had a couple things he wanted to cover before we went in I think are pertinent to what we're going to be talking about. You're up, Nick.

Nick Agnetti: 00:02:49

John. John, I want to thank you for that. That intro, that was first off, that was beautiful. Okay.

John Walsh: 00:02:55

And that's the first time you gave me kudos.

John Walsh: 00:03:00

Thank you.

John Walsh: 00:03:00

It's only six episodes in, but that's okay, I'll take.

Nick Agnetti: 00:03:04

Well, you gotta earn your keep, you know what I mean? So I mean that's just the way it goes. Okay. All right folks. So Helen and Ari, thank you so much for joining us today.

So I pulled some facts from random websites on the Internet. Completely uncredentialed. No, I'm just kidding. But I did pull some information. You guys being the experts, you may say, well that's not true.

My hope is that this lines up with just about everything that you're seeing out there too. So just to paint a picture for everybody, when we talked today, we're talking about the importance of international returns for E Commerce shippers.

So we at Asendia we do have a global product, our EPAC returns product which Helen heads up the entire model, the entire process and department if you will. And Ari works here alongside like John said in the Asendia USA side. And so fantastic resources for today.

But here's a couple of stats just in terms of highlighting the importance. Right.

So returns market data: 2024

So clothing or apparel has the highest return rate among all E commerce verticals with over 56% of total returns. Now I'm not sure if we're seeing that on the cross border side, but I think just in intra us those are numbers that they're pulling there.

I'm sure the number is very high for cross border as well. The average E Commerce return rate is between 20 to 30% depending on the industry.

And 27% of e commerce shoppers abandon their cart when the return process is unclear or complicated, which is one of the things that we're here to talk about. And you know, and the product that we put in put together which is EPAC returns.

trillion by: 2025

I don't know if we're seeing that, but all I know is that E commerce returns seems to be not only a hot topic but a bona fide issue and a need in the industry when it comes to E commerce logistics. So John, I don't know if you want to start and just if you've got anything that you've got teed up that you.

Any questions or things that you're curious about or I can get started, it's up to you. You're on mute, John. Sorry folks, technical difficulties here.

John Walsh: 00:05:45

All the things you say sound obviously you picked it from a lot of different websites. It seems to validate what everybody thinks is going on the market. So it sounds pretty accurate to me.

I would say in addition to that eShop world and Sandy had just put out this, I think they call it the Global Voices report that I know we were looking at yesterday. It's a lot of pertinent information in there that we could share with the audience if they wanted it. But what you're saying is interesting.

I think a couple of things that I highlight there were the. What did you say that if you left the shopping cart, was it 27%?

Nick Agnetti: 00:06:21

27% so over. So you think about that. That's one out of every what, four people? I mean that's crazy.

John Walsh: 00:06:30

Did you on off topic, I know you have some stats there. What did it say? If you didn't show what your clear process was, did it say was there a percentage of people? Is that the reason they left?

Because it may not have been free? Right.

Nick Agnetti: 00:06:46

27% of E commerce shoppers abandon their cart when their terms process is unclear or complicated.

John Walsh: 00:06:52

Gotcha. Gotcha.

Nick Agnetti: 00:06:53

Yeah.

John Walsh: 00:06:54

So that's validating what the shop world of sending report said, which is basically 20 to your point. I think you said 27. I think that was the highest number.

Some of the others were if you charged maybe the 20 some percent left but the highest amount was if it wasn't a clear process. So that's a good value. That's a really good call out by you. So what we'll do is.

I know we had some questions for you guys so why don't we break it down these four buckets and make it easier and we can weave the questions in Helen, if that's okay and Ari. All right, so the first topic would be what is your definition of easy returns? What does that exactly mean for a shopper?

Helen Scurfield: 00:07:34

Okay. I think for me, it's really about making it as simple as almost returning it to a store or that domestic experience.

I think there's a view that international returns is not simple. You've got customs in the way, items have got to travel a long way. It's. Then it's expensive and.

But really from a retailer perspective, it's selling to a consumer and then for that consumer just to be able to send it back, to be able to get their refund quickly, to be able to see that their item is making it back to the retailer because they just want the money back and then potentially shop again or whatever.

So the more barriers you put up, because maybe they've got to fill in paperwork or mail it back, you know, go to the post office and stick it in the mail and pay for it themselves, it starts to deter people and it's. It's really about making that experience just as easy as possible so that you can, you buy, you try on, doesn't fit, don't like it, and back it goes.

Really as simple as taking it back to the store.

Nick Agnetti: 00:08:33

Got you, John, real quick.

So, Helen, one of the questions I have written down, which is really interesting, was, number one, is why is returns transparency vitally important for online brands? And you just spoke to a ton of that too.

And one of the things that we have as a resounding sort of theme in many of our episodes that we drop is we're focused on how can online brands improve the customer experience. And that is, I think this is a huge point of contention in terms of returns being sort of a little bit of that sore spot sometimes too.

And you just brought up some excellent points with they want their money back, but also at the same time, the retailers, they want the goods back too. And so excellent information. Is there anything else that you could think of when it comes to.

Yeah, just the transparency when it comes to returns that you can speak on.

John Walsh: 00:09:32

Can I dovetail on that?

Nick Agnetti: 00:09:33

So get after John.

John Walsh: 00:09:38

The thing I was impressed the most was the dashboard. Right. So is that. And the customer facing tools because, you know, to your point and your next point is customers don't. They think it's difficult.

So how do you feel? The dashboard is fantastic. So I was just curious what your thoughts are on that and just a dovetail on what Nick said.

Helen Scurfield: 00:10:01

Okay, so I guess there's two sides of the transparency.

You've got the transparency from the shopper side, so being able to go onto a portal, be able to create that return, get a label or whatever, and then see where the parcel is, but just making it self serve and without too many steps. And then on the other side you've got the retailer transparency and that's the dashboard you were talking about.

So that's then having that analytics so that the retailer can say, okay, why am I getting returns back? You know, why is my return rate in Germany super high?

Have I got certain SKUs that are coming back all the time or for particular reasons maybe then I've actually got a problem in my supply chain perhaps as a quality issue with the product. It's really about giving the retailer that visibility into, into that returns piece and then understanding how they can improve it.

Because ultimately, yes, we offer EPAC returns, it's a return service, but really we're about helping retailers reduce returns. As a retailer, you want to sell it and want that product to stay with the consumer.

You don't really want it back because it is a headache for everybody.

And that's where I think the analytics and the power of those dashboards are really about helping the retailer gives them that visibility, gives them the transparency so they can then take action in terms of improving their offer to the consumers and getting that repeat business.

Nick Agnetti: 00:11:20

Yeah, that's John, real quick. I do want to highlight. Thank you, Helen, for that too.

So for the listeners that are listening and not watching, we, you know, John mentioned the dashboard, so we don't have anything up to show you right now what we're talking about. We're talking about if you're a retailer utilizing our product, the EPAC returns product.

What John was alluding to is there is a dashboard that you log into to be able to manage the returns process. It's quite robust.

And that's what Helen was talking about on the second end of what she was saying in terms of what the retailer experience is versus the consumer, meaning the person that purchased the goods. I just wanted to make sure that I clarified that before we got too deep into things here.

John Walsh: 00:12:01

The other thing on that, on the analytics is that done monthly, weekly, when we get into this with our potential shippers. How's that done? I'm just curious.

Helen Scurfield: 00:12:15

It's real time and it has filters on there so you can pull the range of data that you really want it to be look at and could filter it by country, by certain products or if you've got multiple brands. So it's really that flexibility to be able to drill into it on, on the scale that you need and on.

John Walsh: 00:12:31

The customer side, on the customer facing tools. Is there anything that stands out that differentiates us from other carriers or other providers that you can think of that would really help?

Helen Scurfield: 00:12:41

I think it's partly. It's around. It's a white label solution so it is fully branded as a retailer.

It looks like it belongs to the retailer site with the logos, the fonts or whatever. And it is simple. You put in your order number and your email, you're selecting what you're returning and you're getting your label.

You can choose where you're dropping it off, you can get a QR code. So it's just simply takes a couple of minutes to just run through the process.

John Walsh: 00:13:06

Gotcha. Okay, Nick, anything else on that you had a couple of questions around enterprise, middle market, that kind of thing. Do you want to touch on.

Nick Agnetti: 00:13:17

I only have maybe 20 to 30 questions guys, so get ready. No, I'm.

John Walsh: 00:13:21

We're only on topic. We're all on topic number one, by the way. But that's okay.

Nick Agnetti: 00:13:24

What do you say?

John Walsh: 00:13:25

Topic number one, there's four main topics but this is the longest. But please go on.

Nick Agnetti: 00:13:31

I'm going to continue. So Helen, when we're talking in terms of our listening audience is going to be primarily US based from a US based seller or consumer.

One thing we talk about the experience.

Free returns have been the norm and there's a very large marketplace out there with that mentality in terms of they've been the norm for years in E commerce, free returns.

But it's costly, it impacts profitability and so what are some things brands can do to help, you know, in terms of the mindset shift in terms of getting away from, you know, free to, you know, it's okay to have paid returns and here's why it's okay.

Helen Scurfield: 00:14:12

Okay. So I think firstly it will vary by market. So some markets are more receptive to paying for a return, others less.

So there are things that sellers can do around perhaps even monitoring their consumers. So ASOs for example in the UK are tackling serial return by either preventing them or levying an additional charge.

We've seen retailers introduce the concept of a membership fee. You know, you pay premium service, you may get free delivery for your outbound and maybe it gives you free returns as well.

You could, you can offer choice.

So maybe sending back the return through the postal service could be funded by the retailer, but if the consumer would like it get, get it back quicker so they get their refund quicker, they could pay to upgrade and access the likes of a FedEx or a UPS type service. I think you've got. There are a number of options but it is also very much about understanding the market and the demographic you're targeting.

Because in the reports that John referred to earlier, statistically we've seen like baby boomers are less likely to want to pay for returns, whereas Gen Z are willing to do so. So it's who you're selling to, what country you're selling to, even what goods.

So potentially with the higher value goods, again you might want to maybe levy a bit more of a charge because you're accessing the express service. So there's a number of factors to take into consideration. So it's possibly not one size fits all.

But then the ability to do localization, targeting your returns policy by country does give you then that flexibility as a retailer.

Nick Agnetti: 00:15:44

Helen, I want to thank you for that, but also I'm a little upset because you stole my Thunder on my 3 out of 20 questions that I know. That's okay. No, my next question was simply is there any distinct or clear differences, you know, specific to shopper demographics?

I said as it relates to return cost methods, ship methods and you know, in terms of, and Ari, you might be able to speak to this in terms of, you know, how things are handled when it comes to the return, if not necessarily if something's undeliverable, but let's say that, you know, they don't want it back. So are there any changes there when it comes to the demographics of the shoppers? Eleanor? Aria, you know, it's either way.

Ari Aloni: 00:16:28

I mean we do offer, you know, a bunch of alternative, you know, options for the retailer to pick besides just the standard return from our return center.

So you know, to Helen's point, the consumer just wants to have, or the shopper in this case just wants to have the refund and that's like the first smile piece. So you know, the rest of the process really is just up to the bait for the retailer to pick.

So when it comes to like the processing at the return center and also you know, the last mile move for us to return the goods, that that's the retailer's choice to the, to their, to their warehouse in the U.S.

so you know, sometimes the retailer may not want to like even deal with that last mile move and they'll want us to have a alternative to, for us to get the return and process and taken care of.

But they want more of, you know, they want to avoid the shopper to keep the goods for a reason that is like for example, a lot of like cosmetics or beauty related verticals, those type of goods. Typically they don't want them to be returned.

They just want us to receive the goods from the shopper and they want us to, you know, destroy or, or donate them for that matter, pending risk and legal requirements so they can have the goods back. And that kind of reduces some costs for the retailer side as well.

Typically those type of moves can be something a little bit less costly than the last mile, typical last mile move that we would see for the retailers.

Nick Agnetti: 00:18:00

Okay, interesting.

John Walsh: 00:18:03

Can we move on? Let's move on to convenience. Alan and Ari right. Hey, thanks everybody.

Thanks for joining today and we look forward to continuing the conversation on a returns topic on our next podcast, which will be June 19th.

Nick Agnetti: 00:18:17

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John Walsh: 00:18:22

That helps us get the word out and we really appreciate it.

Helen Scurfield: 00:18:25

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If you want to learn more about today's topic, email us at ecommerce USA@asendia.com and check back frequently for new discussions on Ecommerce shipping to Canada and worldwide.