The growing population of the MENA region is buying more products online than ever before, but as this shopping trend grows, so does the volume of e-commerce returns. Every marketplace, online retailer and brand has its rate of return.
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These rates vary considerably by location and product category. However, it is estimated that around 30% of all consumer items purchased online in the MENA region are returned each year. Local studies from the Dubai Chamber of Commerce and Industry put the return rate of e-commerce at between 15 and 40 percent, depending on the category. In the MENA region, this equates to approximately $4 billion worth of goods that are returned and refunded each year.
Returns are an increasingly important touchpoint for brands, as the process is critical to purchases and consumer loyalty. Refining the returns process to make it smooth and simple can help brands improve profitability. Research from Statista, among other studies, suggests that around half of shoppers in the region prioritize ease of returns and refunds, with free returns being particularly crucial.
But other global studies by Invesprco have revealed why people are returning items. Sixty-five percent of the time, returns happen because of the fault of the merchant. Twenty-three percent of products are returned because customers received the wrong item, and 22% said the product they received was different from what they ordered. In comparison, 20% identified damage or a defective product as the reason for the return, which is unacceptable to customers.
Businesses need to address these return-before-purchase issues by improving the e-commerce journey. On marketplaces, online retail stores and brand websites, improving the accuracy of item descriptions, images and size charts is a useful exercise in ensuring customers know precisely what they get. Advances in technology can also enhance this experience with innovations such as virtual try-on improving purchasing decisions in fashion and beauty. Augmented reality video shopping and even the metaverse could provide a concierge experience for online customers and help reduce returns.
Behind the scenes, efficient, professional warehousing and inventory management reduces the likelihood of customers receiving incorrect or damaged products by 90%, with a high-quality, fast delivery process acting as the critical link between brand and product. consumer.
Historically, the MENA region has built a strong bricks-and-mortar ecosystem. The acceleration of the COVID-19 pandemic has pushed more businesses online, forcing the pace of transition of these brick-and-mortar retailers to embrace digital commerce. Yet that same physical infrastructure does not necessarily translate into e-commerce. Many digitization challenges are entirely different from in-store retail and require expertise. As Liam Neeson might say, it requires a specific set of skills.
Some brands that are struggling to break into online retail or trying to enter the MENA region from international markets are turning to managed e-commerce. This is where brands employ a specialist provider to manage and manage brand websites and offer seamless marketplace administration. The effects are immediate and online businesses can quickly reduce their rates of return to less than 1%. Economically it is much better, and there is also an environmental benefit. Reducing the return rate can help reduce carbon dioxide emissions, with fewer trips for trucks and vehicles collecting items. Likewise, by reducing the number of returned products, fewer items end up as waste in landfills.
Ultimately, brands have a choice when it comes to digital commerce and returns management: either create and grow their online retail infrastructure and returns processes, or partner with a dedicated expert who can optimize and manage returns. To provide an analogy, it’s like deciding whether to climb a mountain on your own or do the climb with an experienced guide. Although both companies can reach the top, the latter option offers a faster path to success through proven strategies.
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The opinions expressed by the authors in this section are their own and do not reflect the views of Al Arabiya English.