Any doubt about the seismic scale of the digital shift was put to rest this week as Walmart (up 75 percent) and Target (up 141 percent) reported earnings that showed clear spikes in eCommerce as a result of the pandemic.
But as anyone that has tried to catch up with the suddenly online consumer will attest, what goes out must sometimes come back.
The issue at hand is returns. As eCommerce revenue has risen, so has the need for consumers to return their purchases, sometimes surprising retailers that might not have seen the order scale they’ve seen for April and May. As digital revenue goes up, so do the costs of shipping and returns.
But returns can be managed, and Narvar aims to help. The company combines expertise in eCommerce, supply chain management and customer service to amplify the all-important customer experience. At Narvar, returns are more of a post-purchase customer strategy than a drain on cash flow.
“The specific reason we do that is because we know that before they even consider a purchase online, consumers are consistently checking order, shipping and return policies and comparing them between companies,” said Narvar CEO Amit Sharma. “They are investigating their options, and if they’re not clear on what will be done in the case of a return, they might not even place the order. So, shipping and returns definitely impacts the customer experience, the customer strategy and even the top-line sales. If you don't send the expectation around shipping and returns, they might not even place the order.”
Sharma said his company has seen several changes as the COVID-19 pandemic started and then proliferated. The first was from retail clients. As the pandemic started and eCommerce spiked, retailers moved quickly to adjust to the potential problems with returns, and many extended their return window as much as 90 days. That kind of flexibility, he said, is critical as the digital shift accelerates.
The second change was the evidence of the digital shift on the Narvar platform, which saw an 80 percent jump in activity from its clients.
The third was in QR code usage, which was up 70 percent at Narvar during the month of April. Because printer ownership among consumers has decreased, consumers were not printing and packaging shipping labels, opting instead for the QR code.
Perhaps most importantly Narvar also saw an increase in consumers who wanted to drop their purchases off at a physical location. With self-serve kiosks for FedEx and UPS either closed or overrun, Narvar was perfectly positioned for the drop-off trend with its concierge program. With the launch of Narvar Concierge last April, shoppers from Levi’s, Cole Haan and Urban Outfitters were able to visit their nearest Walgreens or select Nordstrom stores to facilitate pick-ups and returns.
Narvar Concierge has experienced a 50 percent uptick in activity in April compared to February given many retailers had to close their physical storefronts.
Seeing the success of the Concierge service, Sharma and his team then turned to the retailers that were not yet on its platform; retailers who might need some help dealing with the deluge of eCommerce orders. It created Simple Returns (and a URL of the same name) at the end of March. It is essentially a free online returns portal that retailers can implement quickly, which makes it easy for customers to return online or in-store purchases, reducing support calls and giving retailers visibility into what's coming back. REI is one of the brands currently using Simple Returns.
Sharma, an 18-year veteran of supply chain management, said he is aware that brick-and-mortar based brands will need to master the post-purchase customer experience as much as eCommerce pure plays.
“When I look at where we are right now, I think it’s more important than ever that a retail brand offer a unique value proposition,” he said. “That proposition has to resonate both emotionally and through the incentives that are offered to make a purchase. Look at Patagonia. It’s a very strong brand because they lead with the company's charter first. They focus on what they stand for, what their values are, and then they get to the products and merchandise later. So, companies will survive and hopefully thrive post-COVID. What do you really stand for? Are you able to appeal to consumers emotionally?”
Sharma and his team put a lot of effort behind retail advocacy. A project on retail sentiment, executed with Forrester Research, showed that retailers seem to be optimistic about the post-pandemic recovery, with 40 percent of them expecting recovery by summer. Apparel retailers are more pessimistic, with 37 percent expecting it to take six months or longer. The research also found that retailers have adjusted their sales forecasts down, 20 percent of them as steeply as 25 percent or more. About half of department stores and luxury retailers are lowering their forecasts by 25 percent or more.
Other content projects have been delivered with McKinsey and a blog penned by Narvar staff and execs. It’s part of an attitude at the company that puts Narvar on the side of the retailer. For example, Sharma is not among the industry observers who think retailers need to set the bar at “free” for returns.
“It does not have to be free,” he said. “We just have to make it transparent to the customer, and that’s important. I’ll give an example. Anytime when you buy an item, if its personalized, or maybe it has custom embroidery, or maybe even if it’s a piece of furniture, those are not free returns today. Maybe if a customer is a VIP, or maybe if it’s on a special item, returns can be free. What we tell retailers is that the flexibility to make changes is the key.”