Returns Avoidance and Gatekeeping to Enhance E-commerce Performance

Licentiate thesis, 2010

The mail order business was once a traditional method of selling and distributing clothes, and other commodities, to customers. Now, the e-commerce trend, with more sophisticated techniques of marketing, selling, and distributing goods, has not only challenged the traditional mail order system, it seems also that the traditional retail chain and even fashion chains are being challenged. This change not only affects how sellers compete (be they long-distance or not), it has probably affected us as consumers - our requirements and how we purchase. This work contributes to this development through extensive empirical investigations into how and why customers return what they have previously ordered. The primary conclusions are that consumer requirements tend to vary, and therefore the standard solution of delivering goods to a vast variety of consumers without engaging in discussion about the individual customer service requirements (et cetera) is most probably the central cause behind the increasing return trends seen in the business. The purpose of this thesis is to identify and to characterise important factors causing returns. Further, to assist the development of Returns Management research, the intention is to develop a theoretical model of a Supply/Demand Chain returns system that incorporates an application of avoidance and gatekeeping in a distance sale context with the aim to improve overall systems performance. The research design used in the thesis was a case study performed at one of the largest mail order organisation in Sweden, with a long tradition in the business. The main data used in the thesis has been collected from interviews, a questionnaire, and secondary data exported from the case organisation. Sales and returns data covering approximately one year of sales and returns in the Swedish market was quantitatively analysed, and the results were regularly discussed and presented to key informants at the case organisation to substantiate authenticity and trustworthiness. The overall conclusion is that the distance-sales trade is affected by the trends that are seen in other areas, namely increased competition - not only from within the distance trade but also from the traditional retail trade. This is probably due to the ease of shopping via e-commerce, and the vast supply of products that even exceeds that of the retail chains. This attracts new customer groups with new demands and requirements. This, in many ways, is an archetypal difference between today’s e-commerce business and yesterday’s mail order business, and could explain why customers from the different channels behave and return differently. The use of the Internet affects how we purchase, and therefore the result of the purchase. It is quite likely that we are far more spontaneous when purchasing over the Internet in comparison with telephone and mail orders. Key words: Returns management, customer service, demand chain management, e-commerce, avoidance, gatekeeping