Although online sales grew 15% from 2010 to 2011, many retailers’ online ordering, shipping and returns processes failed to keep pace, according to management consultancy Kurt Salmon’s rankings of 50 retailers.
Only three retailers, Amazon, Sephora and Saks Fifth Avenue, achieved Kurt Salmon’s highest ranking. The highest-ranked retailers offered easy online shopping and checkout experiences, on-time shipping, great presentations, and a simple return process—all of which set them apart.
But most retailers have room to improve, especially on how they handle returns, which the National Retail Federation expects to have increased 4% during the 2011 holiday season, to $46 billion.
“We found that many retailers got high marks in shopping and shipping, but fell short on returns,” said Kurt Salmon retail strategist Megan Donadio. “Some retailers required the customer to fill out tiresome paperwork and wait in line at the post office, while others failed to provide any type of tracking method or took weeks to process refunds. As more and more retailers offer free shipping, returns are only going to increase and retailers without a quick, hassle-free return process are going to see a lot of disappointed customers. Customers have higher expectations every year and long memories for holiday season letdowns.”
Kurt Salmon purchased products—one with gift-wrapping and one without—from 50 retailers across multiple segments the day after Cyber Monday, when they were most likely to be overloaded with online orders. Each retailer was rated on a scale of 1 to 5 on their online shopping experience, receiving the gift, and later, the return process.
The average overall score was 2.5, with home furnishings retailers and online-only retailers scoring highest and mass-merchant retailers the lowest. Luxury department stores scored 3.7, while department stores targeting middle-income consumers scored 1.8.
A few standout retailers earned high marks for sending small extras with their gifts—Williams-Sonoma attached a small whisk to its gift-wrapping, while Gymboree included certificates for free classes at its stores.
“These bonuses make the gift feel all the more special because they’re unexpected,” said Kurt Salmon retail strategist Vinod Rangarajan. “It makes for a fun moment when the gift is opened, but can also translate to brand advocacy as recipients tell their friends and family about the experience.”
Other retailers set themselves apart with the quality of their gift-wrapping. Only 60% of retailers studied offered gift-wrapping on all their products. And only 50% of recipients felt that gift-wrapping was worth the extra cost.
“Saks really carried the luxury experience throughout the purchasing and receiving process,” Rangarajan said. “They charged the same amount for gift-wrapping as many other retailers, but they not only let customers choose different wrapping paper for each gift box, they also used very high-quality paper and ribbons. Some retailers skip gift-wrapping because it’s very labor intensive, but it can really make a gift feel customized and special. Modern shoppers are seeing gifts from multiple retailers during the holiday season, so shoddy really stands out, as does breathtaking.”