DC Velocity - November 2017

( 55 percent) and fees for delivery in general ( 41 percent). Far fewer were willing to take this route for returns: Less than a third ( 30 percent) said they charged customers for returns shipment, and only 20 percent charged fees for returns processing. (See Exhibit 3.)

That raises the question of how all this affects profitability. As it turns out, many respondents had only limited insight into the matter. When asked about their ability to track returns-related costs, far less than half ( 42 percent) of respondents said they were able to measure the full financial impact of returns. Another 32 percent said they had only a general idea of that impact, while 27 percent admitted that they could only guess at the financial impact of returns or could not measure it at all. (See Exhibit 4.)

ASSEMBLING THE
OMNICHANNEL MOSAIC

As for why many retailers struggle with the economics of returns management, part of the explanation may lie in the complexity of the omnichannel model itself. To begin with, “omnichannel” means different things to different players, with each individual retailer offering a different mix of service options. For instance, when survey respondents were asked what omnichannel capabilities they supported, the answers ranged from “order at store, fulfill from warehouse” to “order at one store, fulfill from another store.” (See Exhibit 5.)

Another complicating factor is the number
of players involved. In an omnichannel world,
by definition, transactions aren’t confined to
a single conduit. Where once a retailer might
have required that items bought in a store be
returned to that same location, the field is
wide open today. For instance, nearly half of
respondents ( 45 percent) now allow custom-
ers to return merchandise bought in a store to
a DC or processing center. As the number of
players grows, so does the likelihood of com-
plications.