As Apple Inc. (NASDAQ:AAPL) jettisons into the second spot in worldwide online retail sales, nudging out Staples and landing right below Amazon.com, Inc. (NASDAQ:AMZN), the company is cutting in half the time it takes to get refunds from their online store.
Customer service as customer battleground
The move is a significant upfront cost to Apple Inc. (NASDAQ:AAPL), but has potential for the firm to lure away customers from Amazon.com and Best Buy, a Reuters report noted, quoting industry experts.
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Customers who purchase a product from Apple’s online store now receive a refund in less than a week, down from the previous ten day average, according to StellaService, a retail intelligence firm. An investment in merchandise returns to boost sales is a noteworthy tactic. “This is the first time we’re seeing an investment like this on the returns side,” Kevon Hills, StellaSerive’s vice president of research, told Reuters.
Apple Inc. (NASDAQ:AAPL) is processing returns faster due in part to the use of expedited two-day delivery service from FedEx, according to the report. Customers ship returned items with prepaid labels to its warehouse in three days and have it back in their hands in four days.
If better returns are being used as a marketing tactic, why so quiet?
StellaService, with Amazon.com’s Zappos as an example of one retail client, first discovered the quicker return processing times this past November, but deduced it up to a temporary measure for the busy holiday season. The company purchases product from Apple’s website several times a day for its research purposes and first noticed the shift when packages were stamped with FedEx 2Day prepaid label.
“Speed is becoming a significant competitive weapon” in the e-commerce wars, Marc Wulfraat, president of MWPVL International, a logistics and supply chain consulting firm, was quoted as saying. Many e-commerce firms do not invest in making the returns process more efficient, as it does not serve the bottom line. Although the speedier customer service is being chalked up as a sales tactic, the fact the company did not inform customers of the quicker web site customer service stands at odds with common marketing principles. “Returns are viewed as a hidden cost, so many e-commerce companies make the process very difficult,” he added. “Returns are the first place to cut corners.”
The competition in customer service is tight, as Amazon.com, Inc. (NASDAQ:AMZN) offers instant refunds in some cases. Speed has its problems, as it puts the company at risk for fraud, the report noted, as some customers may not actually return the item.
Apple Inc. (NASDAQ:AAPL) saw a 24 percent increase in online sales in 2013 reaching $18.3 billion, Internet Retailer estimated.