The three key battlegrounds set to make or break retailers and carriers: Returns, friendly fraud and parcel theft

Online retail just keeps getting bigger. Since the boom of online shopping in the pandemic, we’re seeing a steady year-on-year increase in customers flocking to digital channels to meet their shopping needs. Even with the cost of living crisis rumbling on, the value of customers’ online spending last year was up 16.4% compared to pre-pandemic times.

Consumer habits appear to have changed for good, so retailers and carriers can feel confident investing time and resources into perfecting processes for selling and fulfilling online orders. As fulfilment strategies continue to mature and evolve, three key battlegrounds will play a crucial role in determining the success of retailers and carriers moving forward.

• Retailers will have to rethink their returns strategies.

As a ‘buy, try, return’ culture has become commonplace, we saw many retailers introduce return fees last year, in an attempt to stem the tide and try to recoup at least some of the cost. However, the current economic situation means many people would likely choose a retailer offering free returns over one that will charge. To avoid losing customers, retailers need to explore ways they can make returns convenient and accessible for customers, and as cost-effective as possible for the retailer.

Almost three quarters (72%) of customers are open to using smart parcel lockers, which allow customers to have deliveries sent straight to store for pick-up – or to a locker near their home, work, or local high street. If fashion retailers allowed customers to have their clothes delivered to a locker in-store, they could have the opportunity to try them on in the shop and return straight away, if they would like. Many stores don’t have the floor space to carry all of their items in every shop, so this offers customers more options.

Or, if the customer chooses to have their delivery sent to a locker near their home, they can simply return the parcel to the locker, where a courier will collect it – cutting queuing time and allowing customers to drop off items 24/7. Both of these options reduce the cost of returns, as the courier only needs to collect parcels from one location, rather than visiting multiple home addresses. If they choose to do so, retailers can then pass this saving back to customers.

This is also especially useful in the fashion space – where, when it comes to returns, time is money. The quicker a parcel gets back to the warehouse, the quicker the customer has the money back in their account and can repurchase the item in a different size or colour. Plus, if it takes too long for an item to get back onto the warehouse shelves, it’ll be ‘last season’s’ stock, which could mean it needs to be marked down. Parcel lockers speed up the returns process – making life easier for customers and driving profitability for retailers.

• Retailers and carriers should be prepared to combat ‘friendly fraud’.

Carriers often leave items on doorsteps and ‘safe places’ without collecting the recipient’s signature. In effect, this means there is no proof that the parcel was actually delivered into their hands. When this happens, sometimes recipients do not realise an item has been delivered, and mistakenly request a refund or replacement from the retailer. They could even potentially pretend they didn’t receive an item when they did.

These problems are called ‘friendly fraud’. To prevent them from happening, retailers and carriers should favour last mile options that increase the likelihood and accuracy of tracking deliveries. As part of the mix, parcel lockers can keep a digital record of every parcel that has been delivered by a driver and collected by a customer. Recording as much delivery detail as possible enables retailers and carriers to fight back, giving them confidence about genuine reports of missing parcels – and helping them stamp out false reports (whether through mistakes, or attempted fraud).

• Parcel theft will double this year – retailers and carriers must act fast to avoid lost revenue and frustrated customers.

Into 2025, we will unfortunately see parcel theft rates continue to rocket. Quadient’s recent FOI request to UK Police forces revealed that incidents of ‘porch piracy’ have risen 500% since 2019. Particularly in peak periods – like the January sales – deliveries will be split between ‘regular’ delivery drivers, and temps who might not be familiar with the area, or know ‘safe places’ to leave items. In turn, many parcels will simply be left on doorsteps, where they are vulnerable to ‘porch pirates’.

Parcel theft rates can be eased by offering a range of delivery options, including parcel lockers. They offer a high level of security, with the customer receiving a one-time access code to retrieve their parcel whenever is convenient for them. Many lockers can also track collection times and capture images of the person collecting items. Savvy retailers and couriers will begin to offer these solutions to help ease the burden of parcel theft and avoid the cost of stolen parcels being passed back onto them.

Delivering another year of growth

Retailers and carriers need to keep their wits about them to emerge victorious from three key battlegrounds: returns, friendly fraud, and parcel theft. With online spend still growing, winning these battles will pay dividends. This is not a time for standing still – those who refuse to evolve will be left behind as online retail and fulfilment continues to mature.