Helping manage the returns challenge with drop2shop

Dave Field, Founder and Chief Operations Officer at Coll-8, writes about how the company is helping retailers tackle returns congestion during peak and beyond.

“Most of us know that the continued rise in online sales has been transformative for many businesses over the course of the last decade.

The revenue which e-commerce has generated has enabled companies in retail, logistics and a host of associated industries to improve what the concept of good customer experience looks like in practice.

At the start of last year, for example, Coll-8 Logistics launched drop2shop, the simplest, greenest and most cost-effective returns platform available in the Republic of Ireland – one of the fastest-growing e-commerce markets in Europe.

We followed that by creating a purpose-built customs clearance system which makes the process of shipping goods to Irish consumers even easier for major brands in the UK and much further afield.

There is an even greater premium on that kind of innovation due to a dramatic surge in orders since the start of 2020.

That is because the increase has highlighted a subtle change in how consumers shop which is already having significant consequences for the entire supply chain.

Lockdown’s enforced closure of high street stores drove more customers online but also meant that unwanted purchases could not be taken back to ‘bricks and mortar’ premises.

Additional volumes of returns have coincided with external challenges that have greatly impacted those brands with large numbers of international customers. Chief among them is Brexit, which has added successive layers of complexity to outbound and inward shipments.

That is, though, of little consideration to consumers who simply want to be able to buy what they want, when they want and send back what they no longer need however they wish.

Outside of the annual peak shopping and shipping season that presents a sizeable issue.

Yet when you consider the sheer amount of goods bought in the month before Xmas – and the goods returned at the start of the New Year – it is no wonder that some retailers have been eager to find ways to deal with returns more efficiently.

One of the most dramatic findings in a white paper (‘Going back: Tackling e-commerce returns in the first post-Brexit parcel peak‘.) which we at Coll-8 Logistics have just published is that as much as £1.1 billion worth of clothing and footwear bought online during November and December is likely to be sent back to UK e-commerce brands in early January.

Such ‘fast fashion’ items are by far the most frequently returned purchases. Although estimates vary between retailers, a conservative 40 per cent of clothing and accessories ends up back with the retailers from which it had been bought.

On top of the astonishing value of refunds which have to be made can be added the cost of processing returns. Whilst each domestic return costs roughly £4 (€4.69), the average outlay for returns from customers in the EU or further afield is approximately 50% higher (£6 or €7.04).

Some retailers claim that they have been prepared to spend the sums involved in order to keep shoppers happy, especially those in a country like the Republic of Ireland which is familiar with UK brands and entirely comfortable with the idea of cross-border buying.

Retailers know that ensuring easy returns is one way of building customer loyalty and developing repeat business.

Others have been very clear about the importance of making the returns process more efficient, something which has opened up new commercial opportunities for innovations capable of challenging the time-honoured way of confronting the problem.

Within the last year, for example, we have seen a threefold increase in the number of returns being routed via our drop2shop system.

The convenience stores which form the drop2shop network are the very same premises which are so integral to the way that Irish communities function within and outside the country’s major conurbations that they are visited by one million people every single day.

Deliveries are made on the same vehicles which take stock to the stores, while incoming vehicles carry any returned items. With no need for a second, dedicated fleet, drop2shop is both easy to use and very environmentally friendly.

In addition, the customs clearance system which we devised has proven so effective that it has been handling nearly 30,000 declarations each day during the current peak season.

Drop2shop is one example of the returns solutions which specifically exist to provide the three key components of an effective returns strategy: convenience, certainty and economy.

Just as in households across the Europe, Christmas indulgence often leads to a series of resolutions to improve things come January.

Bearing in mind the extensive research which has formed the basis of our new white paper, I have little doubt that the New Year will bring a renewed vigour from retailers to ensure that they are even better prepared to tackle the challenge of returns congestion.”