With online ordering increasing, so is the number of returns retailers have to cope with. Dealing with returns is an expensive part of doing business, especially for online purchases. It’s the reason why the number of retailers charging return fees has risen, according to retail technology company Narvar. In an interview with Yahoo Finance Live, Narvar Founder and CEO Amit Sharma explains how returns could reshape the future of online retail. Sharma thinks there are a couple of things that could happen. One is “more balanced return policies,” where perhaps VIP or loyalty-program shoppers may get return-related perks that regular shoppers don’t. Another prediction from Sharma is that retailers will make exchanges easier so that they don’t lose out on the purchase altogether. Watch the video above to hear how Sharma thinks AI could impact the returns process.
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BRAD SMITH: What is that next leg of iteration, of growth beyond a company being able to add their own branding, their own experience into this logistical process that many consumers, they continue to track their packages and take part in?
AMIT SHARMA: No, absolutely. I think there are two things. When we’re talking about returns, we talk about the cost. And that actually impacts the bottom line of consumers, as well as for retailers, because consumers pay the price for paying for returns, and retailers see that operational overhead.
So we’re going to see a couple of things happening in the industry. First of all, today’s returns policies are one size fits all, which means you have X number of days to return either for a fee or at no fee, and then you can’t do much. What we’re going to see in the future is much more balanced returns policies, where if you are a loyal member or a VIP member for a brand, then you can have much more liberal returns policies, you may get your return refunds instantly. And if you’re not, then you may have to pay for return. So that’s one change that you will see, that retailers will tie returns more closer to their loyalty program, that’s number one.
Other thing that you will see is it’s not just about the returns, but how do you actually drive the exchanges, because if consumer has an intent and if they buy a product online and they want to return it because of a fit, or a size, or a color, how do you give them convenient options to actually exchange. That way, you can actually keep the share of wallet, versus completely refunding for that purchase that the consumer may have made. So we see a lot of opportunities for businesses to actually improve their returns policies.
And last but not least, technology, especially new AI and language models, will also actually offer more convenient options to actually figure out what consumer needs are so that when they are looking for exchanges, that way, they can get a better fit through the process.