Happy Holiday Returns: Convenient Process Offers Retailers a Competitive Edge; Newgistics' Third Annual Returns Survey Finds Direct Retailers Can Boost Sales and Secure Customer Loyalty With a Well-Executed Returns Program

Business Wire, Dec 12, 2005

AUSTIN, Texas -- This holiday season, online sales are expected to reach an all time high, which means retailers need to ensure customers have a convenient shopping experience, from start to finish. A majority of direct shoppers agree that a convenient returns process is a critical factor when deciding where to make a purchase. For the third year in a row, a survey commissioned by Newgistics, Inc. and conducted by Harris Interactive(R), shows that an overwhelming number of U.S. adults who have shopped online or through catalogs (92 percent) are somewhat or very likely to shop with an online or catalog retailer if the return process is convenient; conversely, 82 percent are not very or not at all likely to shop again with a direct retailer if the return process is inconvenient. Equally important this holiday season, 77 percent of U.S. adults report that return policies and processes are important or very important when deciding to purchase a gift for someone else. For a copy of the report on the data collected in this survey, please visit www.newgistics.com.

Capturing the Cyber-Shopper

Providing shoppers with an easy returns solution gives retailers the advantage they need to race ahead of the competition this holiday season. Moreover, the survey results prove the rise in gas prices is influencing more people to shop online. One in five adults (20 percent) say the recent change in gas prices was likely or very likely to influence their decision to shop direct -- that is online or by catalog -- as opposed to in stores this season. The survey also revealed that six out of 10 (60 percent) of adults have ever shopped online, up nine percent from last year's survey (51 percent)(1).

The results also show that it is more important than ever for direct retailers to differentiate themselves by providing a clear and convenient returns process. In fact, 75 percent of adults who have ever shopped online or through catalogs say it is important or very important to know a direct retailer's return policy before purchasing direct. In addition, the majority of direct shoppers cited a convenient (71 percent) and visible (68 percent) returns policy as important or very important in deciding to shop with an online or catalog retailer that they have never shopped with before. U.S. adults in general also report that they are somewhat or much more likely (61 percent) to shop with a retailer that offers customers the ability to create labels and track packages online than one that does not.

Making the Most of Returns

Returns are a fact of life for the retail industry, but retailers that recognize returns as a critical touch point for consumers can turn returns into a profitable component of the customer relationship process. According to the survey, half (50 percent) of adults report they typically buy additional items when returning merchandise to a retailer, regardless of whether they ask for a refund or an exchange. Retailers that implement targeted promotions during the returns process can actually improve customer loyalty and increase sales and multi-channel purchasing. When returning merchandise purchased online or through a catalog, 88 percent of online or catalog shoppers are somewhat likely, likely or very likely to take advantage of a discount on the next purchase (2).

A convenient returns process can also lead to greater operational efficiencies for the retailer by lessening the hassle of making returns and encouraging consumers to return merchandise to the retailer faster. More than four in five (85 percent) direct shoppers say they would return the merchandise purchased online or through a catalog more quickly if the return process is convenient, which means that merchandise gets back into the hands of retailers more quickly, streamlining the restocking process. Retailers that implement a convenient return policy this year may actually see more sales, more repeat customers and better visibility into operations.

About the Survey

Harris Interactive(R) conducted the telephone survey on behalf of Newgistics, Inc. between November 25 and 28, 2005 among a nationwide cross section of 1,061 U.S. adults ages 18 and over -- of whom 834 have shopped online or through catalogs. Figures for age, sex, race, and region were weighted where necessary to align them with their actual proportions in the population. In theory, with a probability sample of this size, one can say with 95 percent certainty that the results have a sampling error of plus or minus 3 percentage points of what they would be if the entire U.S. adult population had been polled with complete accuracy. The sampling error for the sample of U.S. adults who have shopped online or through catalogs is plus or minus 3.4 percentage points.

About Newgistics

Newgistics, Inc. (www.newgistics.com) is the leader in returns management solutions. Newgistics' patent-pending Intelligent Returns Management(SM) solution delivers the most convenience for customers while maximizing control of the returns process for retailers. Newgistics' SmartLabel(R) drives customer loyalty and increases profitability for leading retailers like Neiman Marcus, J.Crew and Abercrombie & Fitch.