Online retailers know there’s no way to completely avoid returns, they are a part of the online shopping experience. How you choose to manage (or battle as some would say) them can have a drastic impact on the success of your business.
But before we go too far down the road of how you can handle the dilemma of returns, let’s take a quick glance at the numbers provided by the National Retail Federation.
- An estimated $428 billion of merchandise was returned in 2020
- $102 billion of merchandise returned in 2020 was originally purchased through online retailers
- 12.2% of merchandise returned in 2020 was apparel
While it may be difficult to embrace the situation, online retailers don’t have much of a choice. So let’s see if we can find some potential ways to at least ease the effect.
Customer Personas
In every business you have personas, right? Let’s look at some of the different personas that exist for your shoppers who make returns. We can place similar shoppers into buckets or audiences to help us designate which persona that most align with.
- Unhappy with the product received. We hope this is a small audience for you. Ideally you want every customer to love everything they buy on your site, but sometimes that’s not the case. However, you can keep this audience small by producing high quality products and ensuring the images and descriptions provided on your retail website are accurate.
- Not sure about sizing. You can provide all the sizing charts in the world and shoppers will still be unsure which size is going to fit them best. Maybe they’re in between sizes or more comfortable in a smaller/larger size depending on the style of clothing they’re purchasing. You know you have customers who will buy multiple sizes of the same item, fully intending to return at least one of them.
- Items received were damaged. We know sometimes this is out of your control. If the service delivering the items isn’t careful or leaves the package sitting in a puddle and it ruins the contents, you can’t control that. However, if the item is damaged at the warehouse during fulfillment, you may have a situation you need to address.
So now that we know who is returning their purchases, what next?
Strategies to Reduce Return Rates
Develop Optimal Return Policies
If you’ve heard us say it once, you’ve heard us say it 100 times. Technology. By collecting the data from your buyers and their activity you can formulate the optimal return policy available for your online shoppers.
Yes, you could create a return policy and just wait to see how it works. But why waste your time and possibly your profits? Whether you purchase the technology directly and have your internal team analyze it or you hire a third-party partner to help, you have the data you need. You just need to get access to it (if you don’t already) to make an informed decision.
Predictive Analytics
All right, that was just one way you can use technology on your retail website to help alleviate the burden of returns. With the use of predictive analytics you can customize the experience a customer receives.
Identify online shoppers who have returned more items than they’ve kept. Or new shoppers you may want to entice into placing a purchase with the offer of free returns. Or shoppers who have a high rate of returns, but also keep more than they return.
Some retailers, Zappos for example, have found that customers who return the most also purchase and KEEP the most. According to the authors of “Business Ethics: Ethical Decision Making & Cases” Zappos states their customers with the highest return rates are also their most profitable customers. In Zappos’ case, they’ve opted to keep free returns for all customers based on this data.
You’re not the only one who knows returns are going to happen, so does your shopper. According to the Narvar Consumer Report, Making Returns a Competitive Advantage, 95% of respondents said they would shop at a retailer again after having a positive returns experience. The only thing worse than online shoppers returning purchases is online shoppers returning purchases and then never returning to your retail website to make another purchase because they had a negative experience making a return.
Creating a positive return experience doesn’t have to be painful for you either. Retailers who have built their online retail site on Shopify have a variety of applications to choose from that can help!
Improve Sizing Accuracy
The last idea we want to discuss is reducing the amount of returns based on sizing issues by improving the accuracy of a purchase. We know this won’t completely eliminate the return of items that don’t fit correctly, shoppers return items due to fit even when they’ve had the chance to try them on before they purchase them. But let’s see if we can at least reduce the number of returns.
Try going beyond the typical size chart with a fit quiz. Based on the knowledge you have about your products and how they fit, build out a quiz that asks questions that go deeper than simple measurements to help shoppers better decide which size would be best for them.
This could also be a great solution if you’re a CPG retailer. By incorporating a quiz into your shoppers’ buying experience, you can help guide them to the right product. Again, you know your products best, help your shoppers find the item (or items) that will fill their needs by asking them what their needs are.
Returns will continue to be a part of the shopping experience, you and I are guilty of it as well. However, implementing one or two new strategies can help alleviate the pain for both you and your shopper.
