Reducing costs and increasing sustainability through good product detail pages in online retailing

Relationship between sustainability and the number of returns

If product detail pages or product data sheets are faulty, the risk that the customer will return your product increases. Whether the customer will order from you again or switch to another online store next time due to dissatisfaction is also the question. If the data is incomplete or not particularly detailed, it can quickly happen that the product is returned because the customer could not have known that the product had certain characteristics he did not want due to a lack of information before the purchase was made. For these reasons, many products are returned or in some industries, customers make "selection orders," meaning they deliberately order more than they need in order to return the rest after selecting the items that suit them.
The costs that online retailers incur as a result are enormous. So what's important to reduce these revenue-eating returns? - The information on your product detail pages must be complete, detailed and accurate - as we explained. You can achieve this high quality of product data through the successful interaction of a Product Information Management system like Akeneo, with a Data Asset Management system like our TESSA DAM software.
By reducing the number of returns in this way, your company will have lower costs and a higher profit.

However, a decrease in the number of returns has other benefits for the online retailer that are often not directly considered: Fewer transport emissions are caused and the consumption of resources is reduced. If you manage to reduce the number of returns of your products, you pay for the sustainability of your company. This is especially important in light of the fact that more and more companies want to become more sustainable, perhaps even set up sustainability strategies or public welfare balance sheets, etc., and the legal regulations in this area are becoming stricter. If the company succeeds in reducing the number of shipments and returns, it will also no longer have to deal with so many employees processing returns or sending out unneeded products in advance - in times of a general shortage of skilled workers, this is a major advantage. After all, there is also a shortage of skilled workers in warehouse logistics, for example. We would like to explain all these contexts in more detail here.

Reducing transport emissions in online retailing also benefits the environment and climate

Reducing transport emissions is an important aspect of protecting the environment and the climate. Online retailing plays a major role here: e-commerce has increased rapidly in recent years and will continue to grow in the future. As a result, the number of returns is also increasing. Every returned product was initially shipped unnecessarily and then has to be transported back to the seller, causing additional and actually unnecessary transport emissions. The leverage hidden here for the companies involved can be very large indeed. The topic is so important that science and the media also deal with it again and again. The University of Bamberg has set up a research group specifically to address this issue appropriately: The returns management research group says that in some cases well over 50% of all orders are returned. The proportion of returns is particularly high in product groups that are strongly influenced by fashions, such as clothing: Here, rates of 70-80% can be reached. However, a considerable number of ordered products are also returned in other areas such as electronics (10-18%).
Handelsblatt also emphasizes how environmentally damaging returns are, because they lead to an increased volume of transport, which makes the roads even more congested and releases CO2 emissions, which in turn damage the climate.

Reduction of resource consumption has a cost-reducing and sustainable effect

The reduction in shipments and returns has another positive sustainability effect: if consumers order less but keep more items, then logically less packaging material is needed. Companies that engage in e-commerce therefore have fewer expenses at this point. But there's another benefit here, because the supply chain difficulties we've been experiencing for a number of years are also having an impact on the supply of packaging and transport materials: Cartons and foils and even pallets have been difficult or delayed to get and have become more expensive. Reducing the returns rate therefore also makes sense from this perspective.

Less employees required in logistics for returns processing

Not only the returns themselves need to be processed and handled commercially, but also the dispatch of the numerous products to the customers. In a company that operates e-commerce on a large scale, a lot of people are involved in sending out products that have to be processed again afterwards as returns. Since we are living in a time of a general shortage of qualified employees, it is not at all easy to keep enough suitable personnel on hand for these tasks. In some cases, it is even impossible, because it is often difficult to find qualified employees even for commercial tasks and in warehouse logistics. Added to this is the lack of driving staff: there are already simply too few truck drivers, and in the next few years this shortage will become even more critical. Such developments contribute to the positive impact for online retailers of reducing their returns rate by optimizing their product detail pages, ultimately making their businesses a bit more resilient to the current challenges.

So, reducing the number of sends and returns is a good thing in many ways - not only from a cost reduction perspective, but also in terms of sustainability and resilience. To arrive at a solution that lasts, the long-term improvement of your product detail pages through excellent product data from a PIM is the fundamental basis, supported by assets - images, videos, documents - from a DAM like our TESSA.