Posti E-commerce Return Exp
Service Design
Overview:
This project is a service design project that aims to design a comprehensive E-commerce return solution for both customers and e-tailers. It is assigned by Posti as a 2-week design challenge. The final proposed solution is an integrated return service model designed for increasing customer loyalty to Posti's return service.
Year:
2020 (2-week design challenge assigned by Posti)
Focus:
Market research, UX Research, Service design, UI/UX Design, Prototyping
Skills:
Qualitative research (in-depth interview), Concept ideation, Visual communication, Consumer insight analysis, Synthesis, Storytelling, Wireframing
Design brief
How might Posti create one seamless experience of e-commerce return?
The initially given design brief of this 2-week design challenge was "How might we create one seamless experience around shopping online, receiving your parcels, and returning them if needed?" However, this design brief was too ambiguous and I decided to focus on E-commerce return, which is a relatively underexploratory area.
Brief interpretation
Offering a seamless experience of e-commerce return involves not only customers as service users but also e-tailers. However, as the figure below shows, customer satisfaction goes up while e-tailer satisfaction goes down when the e-commerce return experience becomes better. Therefore, my interpretation is how can Posti helps increase customer satisfaction of return services meanwhile facilitating the management of returned goods for e-tailers.
Figure of customer satisfaction and e-tailer satisfaction
Breaking down the process
The documentation of this project is illustrated with the 4-step Double Diamond design process – Discover, Define, Develop, and Deliver.
1. Discover
Context of e-commerce return
I conducted market research to understand the current context of e-commerce return for potential business values discovery.
Although e-commerce return is highly anticipated (41% of customers buy variations of a product with the intent of returning), nearly half of the customers (47%) are not satisfied with it (UPS Pulse of the Online Shopper research report, 2019). According to Donny Salazar, CEO of MasonHub, returns have historically been a “painful process for everyone.” Therefore, I decided to begin the research by investigating what are the painful factors on both sides of customers and e-tailers.
Customers' side
The main reason of poor returns experience comes from:
25%
Delay in getting a refund
24%
Having to pay for a return
21%
Delay in receiving an exchange or a replacement item
E-tailers' side
Key challenges of receiving online return to e-tailers:
64%
Managing defective or damaged goods
50%
Performing quality checks on returned goods for resale
41%
Optimizing and standardizing labor force activities
Reasons of return
Across all generations, only 10-15% of the purchased goods are returned because of the damage issue. This means 85%-90% of the returned goods are in good condition. However, the majority of them might end up in landfills, especially fashion products.
Moreover, In the U.S. alone, Statista (2019) estimates return deliveries will cost $550 billion by 2020, 75.2% more than four years prior. And that number doesn’t include restocking expenses nor inventory losses.
BigCommerse research (2019)
The motivation for e-tailers to offer a return service
According to Brody Buhler, the global managing director of Accenture, the people who return the most are the most profitable customers, with the top 5% of returners being 30% more profitable. And since returns have been proven to be a costly and inefficient process for e-tailers, it is fair to conclude that: Providing return services is not about profitability. It’s about managing customer loyalty for future purchases.
How do e-tailers handle returned goods?
It has been proven that this system is inefficient to e-tailers because they don’t know how to do with the returned goods. Intermec found 52% of distribution center managers don’t have the ability or resources to determine whether returned items should be sent to the vendor, moved into inventory, or discarded. E-tailers often choose to manage their returns through their owned store network and warehouses. Only a small proportion of the total return management is outsourced to 3PL providers.
UPS – Pulse of the Omni-channel Retailer survey (2016)
Benchmarking
There are startups that target return management as their business. These new solutions of e-commerce return are designed for e-tailers who do not have the ability to efficiently handle their returned goods.
Summary of the market research
From the market research, I concluded 3 key findings:
1
The interests of online returns pursued by e-shoppers and e-tailers are not aligned.
Providing a good return service and managing returned goods are unprofitable for e-tailers, but being able to return purchases and get the money back is exactly what customers want.
2
Most of the e–tailers don’t have the tech and ability to profit from managing and reselling the returns.
The current online return model is inefficient. Frequently, e-tailers will store the returned goods in their warehouses for a long period and have to lose money to get rid of the returned goods.
3
Startups in the return business have been successful, and Posti has a good logistics foundation to scale those successes.
With the 700K-user base on OmaPosti, local network, and 400+ years of logistics experience, Posti is able to connect with customers and e-tailers physically & digitally.
Posti's opportunities
Based on the summary of market research, Posti’s two potential roles in the e-commerce return business were identified: 1) Customer-centric return experience provider, and 2) Resell process facilitator.
Posti’s roles & the journey of returned goods
Research questions
After having the basic understanding of the context of e-commerce return, the research questions of this project were redefined as follows:
* Considering this is a 2-week design task with a limited time frame, I will only focus on the first research question in this project.
How can Posti create an integrated solution of e-commerce return that:
-
provides a customer-centric return experience for e-shoppers, and
-
facilitates the resell management process of returns for e-tailers
User research
To answer research question 1, I conducted 6 in-depth interviews with 5 e-shoppers and 1 e-tailer who had experience in returning and receiving returns in Finland. Although interviews with the Posti management team and staff were not conducted due to the limited timeframe, their perspectives and insights are valuable to business objective validation and design execution. and should be included in future studies.
Ideal interviewee mapping
2. Define
Customer insights
3 themes and 6 key insights were generated to highlight the pain points of customers. The analysis process was interpreting quotes collected from interviewees to insights with the validation of market research. Then these insights were synthesized into three themes, which are Simplicity & intuition, Standardization for trust, and Sense of transparency.
Customer profiles
Besides customer insights, three customer profiles were defined in customer research. These three profiles are identified based on different customer lifestyles such as general lifestyle, busy lifestyle, and restrict mobility lifestyle.
Customer journey map
To visualize the negative emotion areas, I used the customer journey map to map out the emotional journey of the three customer profiles. As the graph below shows, the most negative emotion areas are Print out the return form, Pay for the return fee, and Wait for the return result.
Reframing design brief
Combining the outcomes of market research and customer research, I then reframed the design brief as "Design a customer-centric return service that aims for increasing customer loyalty of Posti's e-commerce return experience." This will be achieved through the following 3 goals:
1. Intuitive simplicity
Provide an effortless experience and reduce cognitive load during the return process
2. Standardized process
Establish a universal & easy-to-follow return process to build trust between e-shoppers and e-tailers
3. Sense of transparency
Ease customers’ uncertainty and anxiety during the return process
3. Develop
Ideation
I came up with 9 ideas about digital and physical experience. Then I quickly evaluated these ideas with interviewees to receive feedback. Although some ideas have new business potentials such as the Posti flea market, more research is required to back up the ideas at the current stage. Therefore, ideas with pink color are representing that it has potential but requires more validation, and ideas with blue color are those implemented in this project.
4. Deliver
Return service model
A return service model that offers an intuitive, standardized, and transparent return process for all 3 parties that are involved.
This service model aims to increase customer satisfaction, thereby cultivating more loyal users of OmaPosti.
User scenario map
Two channels of e-commerce return are designed in this return service model. The first channel is a physical channel (top row of the user scenario). By following the instruction on the attached form that is delivered with the purchase, it doesn't require customers to involve in any digital process. The second channel is a digital channel. Customers have more flexibility to manage their return process based on their needs.
Service blueprint
This service blueprint illustrates the critical requirements of the frontstage, backstage, and support process during the whole customer journey. I consider this blueprint as a boundary object that creates a universal language and can be used to communicate between departments in Posti.
MVP: OmaPosti return function
The minimum viable product in this return service model is the return function on the OmaPosti application. I used wireframes and wire flow to explain how customers can navigate their return process by using Posti's application. The purpose of creating this MVP is to validate the concept of the return service model with future usability testing.
