With the rise of e-commerce, returns have become an integral part of the digital customer experience. See how dynamic friction control and dynamic routing control can transform this experience and improve operations.

1. RETURNSTHEVALUE
CONUNDRUM
Accenture Post and Parcel
Industry Research 2018

2. Copyright © 2018 Accenture. All rights reserved. 2
With the rise of e-commerce, returns have become
an integral part of the digital customer experience.
Customers expect disposable digital, want
access to the New and are time poor.
This has led to significant disruption in how
consumers shop and a growing demand for fast,
free & frictionless returns.
THE RETURNS STORY

3. THE CONSUMER STORY
Copyright © 2018 Accenture. All rights reserved. 3
EXPECTATIONS ARE EVOLVING
Of consumers
review a return
policy before
buying
Were deterred
from making the
purchase by an e-
tailers return policy
Are satisfied
with retailers
returns policies
Of consumers
consider the returns
policy to be important
when making an
online purchase
60% 49% 28% 82%

4. 83%
74%
51%
25%
22%
Return characteristics that prevent purchases
THE CONSUMER STORY
Copyright © 2018 Accenture. All rights reserved. 4
EXPECTATIONS ARE EVOLVING
Restocking fees
Return shipping fees
Short time limit for return
Requiring a return authorization
Not being able to return to store

5. Common reasons for returns
THE RETAILER STORY
Copyright © 2018 Accenture. All rights reserved. 5
59%
42%
29%
35%
Product not needed anymore
Product was misrepresented
Other
Defective
Most returned goods by online shoppers
growth in e-commerce
reverse logistics costs20%
more likely to return online
purchases than those made in-store3x
75%
33%
32%
18%
13%
12%
Clothing and
accessories
Electronics
Shoes
Food
Beauty & Personal Products
Outdoor & Sports Gear
Source: USPS OIG Report, Statista; Accenture analysis.

6. The categorization of retailers below is based on orders placed
on Cyber Monday 2017 in the United States
THE RETAILER STORY
Copyright © 2018 Accenture. All rights reserved. 6Source: USPS OIG Report, Statista; Accenture analysis.
RetailerValue
Customer Experience HighLow
LowHigh
56%
Customer Pays
for Return
19%
Free & Easy
Returns
25%
Free Return, But
Difficult to Process
19%
Customer
Keeps Items
STUDY AVERAGE
Average days to process a
unit’s return—from the date
the package is placed in the
mail until the credit posts
11.4 DAYS

7. EXAMPLE EXAMPLE
MODELS ARE CHANGING…
Copyright © 2018 Accenture. All rights reserved. 7
Circular supply chains
involving scheduled,
guaranteed reverse logistics
operations
Delivering more than needed
to consumers to enable them
to try and the select the best
suited product
Analytics driven models
sending curated selections
at regular intervals
RENTAL MARKET HOME TRY
ON PROGRAM
SHOP AT HOME—
CURATED BOXES
Rent the Runway
Over 8 mn customers
and began making profits
in 2016
Amazon Prime Wardrobe
Allows customers to order
8 items to try for 7 days
before their being charged
Trunk Club
It scored the highest in
customer experience for
returns in Accenture’s Love
Index
Source: Press Releases, Annual Report, Bloomberg, Accenture analysis.
EXAMPLE

8. Copyright © 2018 Accenture. All rights reserved. 8
CONSUMERS ARE
CHANGING TOO…
SUBSCRIPTIONS RENTAL BRACKETING

9. SUBSCRIPTIONS
Copyright © 2018 Accenture. All rights reserved. 9
Imagine your favorite apparel/accessories/footwear
retailer sent you items that they think you might like
based on your shopping or browsing activity. You
could choose to pay for and keep the items that they
sent or simply send the items back at no charge to you.
If this were a way for a trusted retailer to personalize
your shopping experience, would you be interested
in that service?

10. Copyright © 2018 Accenture. All rights reserved. 10Source: Accenture Global Consumer Shopping Survey 2017, Accenture analysis.
SUBSCRIPTIONS
Interest in Monthly Curated Subscription
Programs —Global Consumer Survey
59%
46% 44% 42%
35%
66%
48% 49%
39%
34%
73%
56% 53%
40% 38%
Fashion Consumer
Electronics
Health and
Beauty
Household Goods/
Home Improvement
Grocery
Old Millennials (28-37)
Young Millennials (21-27)
Gen Z (18-20)

11. RENTAL
Copyright © 2018 Accenture. All rights reserved. 11
Now there are more and more opportunities to rent
items instead of buying the item outright.
How likely are you to rent an item
in the following categories?

12. 14% 15%
17%
10% 9%
11%
1% 1%
2%
RENTAL
Copyright © 2018 Accenture. All rights reserved. 12Source: Accenture Global Consumer Shopping Survey 2017, Accenture analysis.
Likelihood to Rent Items—
Global Consumer Survey
Older
Millennial
Younger
Millennial
Gen Z
Fashion Consumer
Electronics
Health and
Beauty
Household Goods/
Home Improvement
Grocery
10%
12%
15%
7%
8%
11%
10% 11%
15%
6%
7%
9%1%
2%
12% 13%
16%
7%
8%
10%
0%
1%
2%
13% 13%
15%
7% 7%
10%1% 1%
2%
Likely
Very Likely
Currently
Renting

13. 48%
46%
42%
27%
24%
BRACKETING
Copyright © 2018 Accenture. All rights reserved. 13Source: PostandParcel, Statista; Narvar Consumer Survey Returns, Accenture analysis.
THE PRACTICE OF BUYING MORE ITEMS THAN
NEEDED TO TRY AT HOME
Most common goods bracketed by U.S. shoppers 2018
Apparel
Footwear
Home Products
Consumer Electronics
Other

14. BRACKETERS MATTER
Copyright © 2018 Accenture. All rights reserved. 14Source: Narvar Consumer Survey Returns, Accenture analysis.
Shoppers who have purchased multiple variations of an
item with the intention of returning some (bracketed):
IncomeAge
45%
41%
34% 34%
21-29 30-44 45-59 60+
30%
48%
>=USD
100k
<USD
100k
Gender
30%
44%
FemaleMale

15. RETURNS=PROFITS?
Copyright © 2018 Accenture. All rights reserved. 15
Source: “Perceived Risk, Product Returns, and Optimal Resource Allocation: Evidence from a
Field Experiment” by J. Andrew Petersen and V. Kumar*, Accenture analysis.
The power of effectively managing returns
increase in profit per
customer on average
over six months
22-46%
increase in profit per customer
over a three year span than the
firm’s normal strategy
29%
How they do it
12-25%
increase in
profit from
additional
purchases
26-50%
reduction in
lost profit from
returned items
18-39%
decrease in
marketing
costs

16. THE OPPORTUNITY
Copyright © 2018 Accenture. All rights reserved. 16
Solutions that dynamically
manage the consumer experience
• Cost: free—paid
• Speed of refund: immediate—
receipt of goods
• Convenient Locations: home—shipper
• Convenient Methods: label-less—
request authorization
• Digital: app—social
• Time to Return: unlimited—short
DYNAMIC FRICTION CONTROL DYNAMIC ROUTING CONTROL
Solutions that dynamically return
operations and associated costs
• Location: DC—local store
• Quality Check: local—central
• Induction: pickup—drop-off
• Disposition: secure destruction—
wholesale
• Dynamic Label: label-less—fixed
disposition
• Refund Processing: at induction—at DC
Source: Press Releases, Annual Report, Bloomberg, Accenture analysis.
To win in returns:

17. FOR MORE INFORMATION
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BRODY BUHLER
Global Managing Director,
Accenture Post & Parcel Industry
@brodybuhler
robert.b.buhler@accenture.com
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