By Jake Novick, Senior Research Associate, StellaService
On Bright, we’ve frequently documented the importance of speed in both the delivery and the return side of the online shopping experience. We’ve shown data on how some retailers are upgrading their standard shipping service and, on the other side, how Apple had started to use expedited shipping for its returns in recent months. However, until now, we haven’t analyzed the combination of the two. So, which retailers are investing in speed across delivery and returns?
Enter a new StellaService metric called Order Life Cycle.
We define Order Life Cycle, or OLC, as the sum of Total Days to Delivery and the Total Days to Refund Processed for a given order. The impetus for tracking this metric was to get a more holistic view of the fulfillment process from the shopper’s perspective. While many retailers are beginning to understand the value shoppers place on fast shipping with programs imitating Amazon Prime, and some have started to focus on the returns process (as highlighted in our Q2 report on fulfillment trends), few have put the two together and analyzed the order and return process as one and the same.
Why should a retailer care about Order Life Cycle? Shoppers place value on all interactions that they have with a retailer. While retailers commonly view a returned product as a lost sale, in reality, this is just another great opportunity to impress the shopper. Measuring the the lifecycle of an order allows us to see which retailers are focused on providing a quick and painless return process for their customers, not only to “wow” them, but also to get shoppers’ money back in their pockets so they can make another purchase. Further, looking at this from a cost reduction perspective, having fast and seamless delivery and refund processes is likely to lower the incidence of the dreaded “Where’s my order?” or “Where’s my refund?” calls and emails, which plague contact centers and drive up costs.
So, let’s dive into the data.
Definition: Order Life Cycle = Total Days to Delivery + Total Days to Refund Processed
- Total Days to Delivery: Days from submitting the order online to receiving the package at our doorstep
- Total Days to Refund Processed: Days from shipping the return back to the retailer to when a refund is posted on our credit card statements
- More than 5,000 orders placed and refunds received by StellaService Analysts
- Time period: July 2013 through June 2014
- 138 enterprise retailers covered
- Orders where the refund was not credited to our Analysts’ bank accounts within 28 days of the return being sent back to the retailer were excluded
Top 10 Retailers
- Hewlett-Packard – 6.3 days
- Amazon – 6.3 days
- Staples – 7.7 days
- Diapers – 8.2 days
- Vitacost – 8.7 days
- RevZilla – 9 days
- Wayfair – 9.2 days
- Zappos – 9.4 days
- Lowe’s – 9.5 days
- BodyBuilding – 9.7 days
Average of 138 Enterprise Retailers = 15.8 days
Top 5 Categories
- Office Supplies – 11.4 days
- Computers / Electronics – 11.7 days
- Auto Parts – 12.6 days
- Vitamins / Supplements – 13.5 days
- Mass Merchants – 13.8 days
Some of these should come as no surprise – Amazon, HP and Wayfair (all in the Top 10) are known to refund their customers prior to receiving items at their warehouse. What was most surprising, however, was the differential between the top performers and the Enterprise Average: half of the Top 10 had Order Life Cycles that were a week (or more) faster than the average.
We also wanted to look at which retailers offer free return shipping to their customers and see whether that correlated to faster OLC. While some retailers with publicly lax return policies like L.L.Bean and REI did not crack the Top 10, four who offered free return shipping on every order we placed were among the fastest – HP, Zappos, Lowe’s and BodyBuilding.
Digging deeper on this, StellaService data shows that 35% of retailers offered free return shipping on all orders we placed. Continuing with that distinction, retailers offering free returns had Order Life Cycles that were 2 days faster and refund speeds that were more than a day faster than those that charged shoppers to return items.
Taking a step back, we see that there are a handful of retailers who recognize the growing importance that speed on both ends of the process has on developing a positive and long-lasting relationship with customers. They are focused on providing quick deliveries across all regions of the country, as well as ensuring that when a customer is dissatisfied, they are able to get their money back quickly and without fuss. I can vouch for this personally, having just bought six pairs of shoes from Zappos with the intention of returning the five I did not like. Not only did knowing their return policy entice me to make the purchase, but my satisfaction with the ease and speed of both sides of the transaction has turned me into a repeat customer.
Jake Novick is a Senior Research Associate at StellaService. Connect with Jake on LinkedIn.
Previously on Bright:
- Shipping Race: Retailers Expedite Standard Orders to Speed Delivery Times
- Apple Is Expediting Return Shipping To Speed Refunds
- 3 Retailers That Refund Customers Before Items Are Received at the Warehouse