Of course, as more consumers make more purchases, it’s likely that the current trends in the market—from an increase in returns to consumer sustainability concerns—will be exacerbated in upcoming years. But why should that matter to ecommerce brands?
Simply put, it’s an increasingly competitive landscape (it’s estimated that there are over 150,000 active ecommerce companies, and that number is likely to increase). Brands need to be keenly attuned to the evolving preferences of their consumers, especially when it comes to and If not, they’ll run the risk of being left behind in the dust.
Fortunately, you don’t need to do all the grunt work. At parcelLab, we’re proud to be the leading post-purchase software provider around. In fact, we’ve overseen the post-purchase experience for hundreds of brands all over the world, including Europe.
In this guide, we’ll use our experience to take a look at some of the top trends affecting ecommerce companies in Europe and provide our recommendations on how to stay competitive.
Retail returns in Europe: growth or contraction?
Average return rate of products purchased online among consumers in selected countries in Europe in 2021
| Young adults (18-24 years) | Adults (25-64 years) | Seniors (65 years and older) | |
|---|---|---|---|
| UK | 15.8% | 9% | 7.5% |
| Spain | 9.2% | 8% | 8.4% |
| Italy | 10.8% | 8.7% | 7.4% |
| France | 11.1% | 7.7% | 6.2% |
| Switzerland | 20.5% | 14.9% | 7.1% |
| Germany | 10.6% | 7.1% | 6.6% |
Product return rates across Europe are increasing significantly. The country with the highest return rate in Europe varies per study, but trends show that overall, it’s younger online shoppers aged 18-24 that return purchases the most, up to 20% in Switzerland.
According to another study, return rates skyrocketed by 95% between 2013-2018, with the Netherlands returning almost 29% of all purchases and Germany returning over half of all purchases, clocking in at the highest in the study!
With the increased interest in online shopping, more online retailers offering try-before-you-buy or buy-now-pay-later services, and the convenience of free returns, it’s clear that retail return rates will only continue to rise.
Recommendation: have clear return policies
The post-purchase experience is an emotional time for consumers, and If your brand provides a sub-par returns experience, chances are high that you’ll be losing customers.
Don’t try to confuse your customers and offer vague terms and conditions if you need to charge your customers for the returns, or need them to return it in person. Instead, be upfront and use clear, simple language so customers know exactly what’s expected of them like H&M does.
Trend: increase of cross-border returns
Source: Eurostat 2021: Percentage of Individuals Who Purchase Online in the Last 3 Months, via ecommerce Europe
Countries across Europe are becoming more globally interconnected, and the purchase experience is no different. While all countries have a high purchase rate from national sellers, one out of three purchases on average is made from a seller from another EU country, and it rises up to 40% when including all countries, EU or not.
This can be a trickier field to navigate for retailers, with concerns such as differing regulations per country, customs, shipping options, and tax issues. However, with more consumers shopping abroad, it’s important to find a balanced, cost-effective solution that centers the customer experience.
Recommendation: ecommerce companies in Europe should offer cross-border returns
If your consumers are making purchases between different European countries, it’s critical that your brand has a proper framework for offering seamless cross-border returns. But what could this look like in practice?
If possible, your brand could offer a local return address so consumers can easily ship or drop off their packages nearby. If opening a physical location isn’t possible, another solution could be to source partnerships with , which could reduce costs while providing a smoother post-purchase experience for your customers.
Trend: greener ecommerce
With the effects of climate change becoming more significant, urgent climate action is required on all sides. Combined with the EU target to reduce carbon emissions by at least 55% by 2030, sustainability has become top of mind for many consumers.
Data shows that over half of customers will wait longer for a package if it’ll come from a sustainable retailer, and 52% of consumers will pick another retailer if they offer greener delivery options. In other words, it’s time the ecommerce sector steps up its focus on sustainability!
Recommendation: emphasize sustainability
While the likelihood of having a fully circular or green supply chain for DTC brands isn’t very likely, it’s important to take concrete, actionable steps towards reducing waste and curbing back on emissions—
For example, you could consider using eco-friendly packaging (that’s either compostable, recycled, and/or reusable) to help contribute to a more circular economy.
Alternatively, you could focus on reducing the carbon footprint of your returns and offering recycling programs for returned products. For example, by offering consumers a discounted price on the return cost for choosing a more sustainable delivery time, you’re likely to have them opt-in with a low barrier.
Another potential idea could be providing fewer (if any) return labels with a package, and instead opting for a QR code for label-less returns. Not only are you reducing waste by printing less, it subtly allows customers to consider returning multiple items in one box as opposed to individually.
Whatever you go for, the key is to use effective, honest communication to show your customers the steps you’re taking to become more sustainable and to empower them to join in for a better planet.
Trend: no more “one-size-fits-all” approach
Consumers are not a monolith; having a rigid, limited set of rules will only spell trouble in the long run. European customers expect flexibility, such as extended returns in outstanding circumstances like significant warehouse delays.
This also varies between countries: for example, Germany or the Netherlands have higher-than-average ecommerce return rates, while countries like Albania and Turkey make fewer international purchases. There are also different barriers to online shopping: 70% of Portuguese people have concerns over payment security for online shopping, compared to just 8% in the Czech Republic.
But brands aren’t only being expected to segment their user base; the same goes for their marketplace. To ensure profitability, retailers need insight into the (post-)purchase experience. What kind of products are being sold? What items are being sent back? What methods are being used for shipping, and where are they going (to you, a distribution center, etc.)? To truly stay competitive, retailers not only need to be aware of European B2C macro trends, but also of the trends within their organization.
Recommendation: collect and analyze data for regional analysis
It sounds straightforward, but if brands want to truly succeed in today’s landscape, they need to collect as much data as possible to identify internal trends and areas of improvement. Some logistics performance analytics you or your should be tracking include return rates, reasons for returns, and customer feedback.
By segmenting the data by country, you’ll quickly be able to see where you’re doing well–and where you could improve for a better post-purchase customer experience. This way, you can adjust your strategy and communications per country, reducing returns rates, , and operational costs.
Final words: staying ahead of ecommerce market trends
While the world of ecommerce is constantly evolving, following the above recommendations will help keep you a step ahead of the crowd. Of course, it’s important to remember that eliminating product returns is impossible–but it certainly is possible to significantly bring that number down with clear post-purchase communication.
Worry not: you don’t need to do it on your own! parcelLab can help your brand provide personalized, branded touch points throughout the entire sales journey, keeping your consumers in the loop and enriching the experience. Even better, we provide powerful analytics to help your brand continually improve its offerings. The result? Increased sales and top-line revenue, and loyal customers for life.
Want to experience it for yourself? Contact us for a demo of our award-winning post-purchase platform today.
Read all of the Returns Management Playbook Chapters:
- Chapter 1 – What is Returns Management?
- Chapter 2 – Returns Management: Challenges and Best Practices
- Chapter 3 – How
to Reduce Your Return Rate: 11 Tips For Fewer Returns - Chapter 4 – What
is Self-Service Return? - Chapter 5 – Guide to
Retail Returns Management - Chapter 6 – The Best
Return Management Software - Chapter 7 – Understanding
B2C Europe Returns 👈 you are here - Chapter 8 – The
Complete Guide to Retail Returns Marketing 👉 read next chapter
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