Returns Culture: How do you build it into your online business model?

This article is brought to you by Retail Technology Review: Returns Culture: How do you build it into your online business model?.

By Jon White, MD at InXpress. 

In the last few months, online retail giants ASOS and Amazon have made headlines for announcing that they may start blacklisting ‘serial returners’ from their websites. 

Serial returners, or intentional returners, are described as those who buy clothes online, wear them, return them and add more complexity to the process, because the clothes can smell, be damaged or just be clearly worn. 

That said, returns in general are often unpredictable, and can be the difference between a business making or losing money. Couple this with the fact that the average e-commerce returns rate is around 30%, compared to bricks and mortar stores which is much lower at 8.8%, and you can see the essentiality in making returns as efficient and cost saving as possible. 

Some retailers have even started allegedly checking the social media of serial returners. What is the best advice for online retailers to get the most out of the returns process? 

Gain Rich Customer Insight

As online shopping has seen its popularity rise and rise, try before you buy services have started dominating the atmosphere, reducing the gap between online and brick and mortar stores. Apps like Klarna, which works with retailers to allow the user to order for free and only buy if they like it, are good for fraud risk but also enable more insights into your customers. This can be used to customise key metrics, so you can stop guessing what customers want and improve selling. Return data can ultimately help you to better your business and services to boost your conversions. 

Returns can help to better your business, and data can give you a huge amount of insights into your products, your customer preferences and how successful your marketing is. Make a point to gather feedback every time you process a return, and you can find out information that may mean you make better marketing or purchasing decisions in the future. 

No-nonsense Returns Policy

Your returns policy could be the make or break between a customer buying from you, so make sure it’s easy to understand. It needs to be clear, concise and easy to find, so user experience does not cause miscommunication or lost sales. 

Use Online Fitting Tools 

Clothes sizes vary across all stores and can be the same online. By offering online fitting tools where users can specify their measurements and be ‘fitted’ virtually will reduce the chances of them returning it due to poor sizing. Fit Assistant, powered by Fit Analytics that ASOS uses, asks shoppers simple questions that supports their user experience and helps to make sure that they fit into the clothes first time around. 

Convert Returns to Sales

When a customer makes an in-store return, they are often met with rails of clothes and merchandise which can tempt them into making an exchange or sale to accompany their return. But when it’s online it’s more difficult, as they don’t even need to go onto the website to make the return. 

Just because someone buys 10 items and returns 8 doesn’t mean they aren’t still a good customer. They are still profitable customers, you just need to work out what you can do to turn more of  those returns into permanent sold products. Instead, once you have processed the return, consider sending a follow up email with a feedback form and suggestions of similar things they might like based on your research and customer insights. This can also further help you to create a strategy which prevents returns in the long term. 

Free Delivery isn’t the Devil

The delivery service between yourself and the customer is a trust exercise, and your returns policy will often define whether or not they buy from you. A comScore survey found that 82% of customers would be more likely to make a purchase if they could return the item to store or have free return shipping. Online shopping is a crowded market, so consumers have other options if your business doesn’t offer the shipping needs they have. That also includes the quality of the delivery - if delays happen or they associate your business with a delivery service that is unreliable, it could affect their decision to buy from you. Even if they return an item once, if they have a good delivery experience, this is likely to turn into customer retention and attraction. Make sure you approach a respected enterprise shipping specialist, that works with you to determine the right carrier for your requirements.

Use Software on Serial Returners

As mentioned earlier, you can’t penalise someone for constantly returning stock online if it’s in good condition, but you can use technology to find problematic shoppers who return stock worn or damaged. Some stores have implemented a risk rating from The Retail Equation  which keeps track of customer returns and detects fraudulent behaviour. When a return is made, software can scan the sales receipt to provide a data-driven decision on the validity of the return - is there a red flag? Data helps to identify serial returners with much more accuracy than guesswork. 

Online shopping is a huge boon for the 21st century, but the returns tsunami is a tough nut to crack. Don’t miss your chance to wow customers and impress with your products and your returns customer service, as otherwise the shopper may take their business elsewhere. But an organised returns process can prevent them from taking advantage and help you build a more strategic returns culture in your business model.