A Tool That Could Help Level the Playing Field Against Amazon

UPS offers a way to simplify returns

Author: Andria Cheng

August 8, 2017

In retailers’ fight against Amazon, it looks like there will soon be a new weapon that could help level the playing field against the online retail giant.

UPS on Tuesday said it will introduce UPS Returns Manager, a free online tool that allows ecommerce retailers, especially less well-resourced small- and medium-sized merchants, to not only customize their own shipment rules, but also manage return shipments without having to integrate their own IT systems. 

For consumers, who in the past had to go to a retailer’s website to print a return label or use a label retailers include in package boxes, the feature allows them to now print a return shipping label directly from UPS.com’s tracking page both on desktop and mobile devices and through email alerts. Consumers can also print return labels at The UPS Store locations at no additional cost.

The service will be available in the US Aug. 14 and 43 other countries from UK to Brazil two weeks after that.

Why is this relevant? In the cutthroat ecommerce landscape where retailers are seeking to please increasingly demanding customers, the ability to meet the expectations of consumers accustomed to the straightforward return process available with retailers like Amazon can potentially affect shoppers’ purchase decision. It also gives retailers a better view of what’s being returned and plan correspondingly. Some retailers can also cut costs by skipping the need to place preprinted return labels in each box, UPS said.

It’s another arrow in the quiver to pull.

“The idea for this was spawned from identification of the gap in the marketplace,” said Derek Banta, director of digital channel and mobile applications at UPS, in an interview. “We are bridging the gap between sophisticated and unsophisticated online retailers. Returns in the ecommerce world are a necessary evil, but not every merchant has a streamlined process and has figured out a way to simplify the process. We do believe that a meaningful and impactful return policy can help them increase sales. It’s another arrow in the quiver to pull.”

Banta said some UPS customers don’t even have a return policy. Some require consumers to call first about making a return.

The new program is a potential business-builder for UPS, too.  Ecommerce shipment is a growing contributor to the company’s sales, and competition is getting fierce against rivals from FedEx to potentially even Amazon itself with its growing delivery ambitions. The Atlanta-based company said in July that US ecommerce deliveries fueled an 8.1% increase in Q2 domestic revenue to $9.75 billion. 

“Ecommerce shoppers value a simple return process,” Banta said, adding that small and medium-sized merchants also present “an attractive” customer space for UPS. “We want to be industry leading when it comes to the return process. We don’t want our customers to lose sales. The more we can simplify the return process, the more we believe that drives customers for us. As ecommerce is definitely driving returns behavior, returns become a component that helps us differentiate.”

Returns average 12% of US online sales, according to a National Retail Federation’s Shop.org study conducted by Forrester and published in January. The study estimated total online sales jumped 14% to $394 billion last year. Including physical store sales, returns alone totaled $260.5 billion, or 8% of US retail sales in 2015, according to a separate NRF study.

Three quarters of avid online shoppers have shipped returns back to the retailer they buy from this year, up 7 percentage points from 2016, according to The 2017 UPS Pulse of the Online Shopper study released in June.

Meanwhile, a Narvar study also released in June found that nearly half of shoppers in its survey said they returned an online purchase in the last year; 49% of respondents said they “actively check” a retailer’s return policy before completing an online transaction; and  two-fifths of them have bought multiple items expecting to return something. The study also found a great returns experience drives loyalty: 95% of those who are satisfied with the returns policy said they will buy with that retailer again. 

Photo by Mathyas Kurmann on Unsplash