The rate of returns is expected to continue to grow as ecommerce grows. According to the National Retail Federation, the median return rate across all industries is 10 percent. However, this number varies from vertical to vertical. Drug/Pharmacies and Beauty have the lowest return rates, with the former at 1.98 percent and the latter at 7.04 percent. The Auto Parts industry holds the highest return rate of 22.78 percent, followed by Apparel at 12.69 percent.
We’ve discussed the cost of returns and how to use the return to experience to compete with retail giants, but how can you proactively prevent returns? While you will never eliminate returns 100 percent, there are features and content you can add to your site to reduce the return rate.
Leverage the Return Policy
Too often, we see brands hide their return policy in the footer of the ecommerce site or under the Customer Service page. While it might seem counter-productive to promote your return policy when you’re trying to prevent returns, the extra transparency will give customers confidence and peace of mind when purchasing an item online.
In addition to promoting your return policy, consider adjusting the policy to be more customer-centric and lenient. A recent study proved that more liberal return policies will reduce the return rate. In particular, the researchers suggested lengthening the time limit on returns to 90 days rather than 14 or 30. One reason that may be behind why an extended return period leads to a reduced return rate is the “endowment effect.” The longer someone has something, the more attached they feel to it.
Images, Videos, and Product Descriptions
Images and videos are a great way to provide the customer with a full view of the product, but the type of content you produce will vary by industry. In the apparel industry, for example, videos of the model wearing the clothes and walking around would show the customer how the item is worn, how it moves, and how it fits. To take it one step further, brands will use more than one model on the product display page to show how an item would fit on different body types. In addition to using multiple models on the PDP, Madewell, a women’s apparel store, provides the measurements for each model.
However, a home decor shopper wouldn’t need to see a model walking around with a lamp to see how it works. In the home and hardware industry, videos demonstrating how to use the product, the size of the product relative to other items, and its applicability would be helpful for the customer to determine if it’s the right fit for their needs. In the product description, information around specs, measurements, and product background (where it was made, the purpose, etc.) reinforces what they see in the product images and videos.
Most shoppers know that a size small in one store may not fit the same as a size small at another store. By providing a sizing guide on the PDP, shoppers can determine which size would best fit their body based on their measurements. If you have international shoppers, include sizing metric equivalents based on which country the customer is from. For example, a woman’s pant size 4 would be equivalent to a size 8 in the UK and a size 38 in France. Some brands will ask customers what sizes they wear at similar brands and use that information to provide a size recommendation for the item they are considering.
Apparel isn’t the only industry in which sizing guides are useful. Le Creuset, a French cookware manufacturer, found that many customers were returning their items with the reason being the product size was not what they expected when making the purchase. Initially, quarts was the only size metric the manufacturer provided on its site. Unaware of how many servings a quart produces, many customers would purchase a size based on a guess or assumption. Believing this to be the cause for the high return rate, Le Creuset worked with Blue Acorn team to determine a solution that would reduce the rate. They decided to add how many servings the pan or pot size would produce to every PDP, providing the customers a more relatable metric than quarts.
Customer Reviews and User-Generated Content
If you don’t have the resources or time to create images and videos for each product, user-generated content (UGC) is the best avenue. Typically in the form of customer reviews, UGC provides customers honest feedback about the product that they can leverage during the buying journey. By allowing your shoppers to upload images along with their reviews, customers can see how the product looks in “real-life” and how other buyers use the product. For example, if it’s a cookware item, customers could provide a review about how they cooked or baked with the item.
Additionally, you can use the reviews to feed information into the sizing guide. Based on the reviews, you can add copy to the PDP noting if the item runs large, small, or true to size. If it’s apparel, reviews will answer user questions around the fit, which body type it’s best for, and the quality of the material. Often, brands and retailers will ask the customer for their age, size, and weight when leaving a review, so other shoppers understand the context behind the comments.
Increase Customer Consideration Period
Most brands and retailers strive to make the checkout as easy as possible with quick checkout or one-click checkout buttons. However, this doesn’t leave a significant amount of time for the customer to consider their purchase before clicking the checkout button. Especially during the holiday season, customers make more impulse purchases that later get returned.
To combat this issue, online retailer The RealReal removed the checkout button from the shopping cart quick view on the site, leaving only the view cart button. While this funnels customers to view their cart before going straight to checkout, it provides them more time to ensure that the products in their cart are what they want. With Blue Acorn’s optimization team, The RealReal is currently running this experiment with Optimizely with the goal of ultimately reducing the number of returns.
If your goal is to get rid of a ton of merchandise without a massive influx of returns, consider a final sale. In a final sale, customers purchase items at a discount without the option to return or receive a full refund if they do not like the product. If your brand chooses this path, clearly label which products are “final sale” on the PLP, PDP, and throughout the checkout process and provide a final sale definition.
Even after clearly labeling items and defining final sale, expect some customers to be upset if they are not satisfied with their purchase and wish to return the item. Have a plan in place for your customer service team to handle these scenarios and turn it into an opportunity to form customer relationships and recommend other products.
Analyze Customer Return Data
Don’t be afraid to ask for customer feedback throughout the returns process. Capturing and analyzing this data will provide they what, how, and why behind a person’s return.
- What are customers returning? This will help you adjust merchandising if there is a defective or unpopular product.
- Why are customers returning? Understanding the reason behind a return will give you a starting point as to what content (sizing guide, reviews, etc.) you can provide customers to prevent ill-informed purchases.
- How are customers returning their order? This will help you make improvements to the returns workflow. For example, if more people are choosing to receive the refund back to their credit card rather than store credit, what could you do to entice the shopper to choose the latter?
Keep in mind that returns affect the entire company. Once you have the data, share it with your customer service representatives and cross-functions to determine how to solve the common problems.
A poor customer experience and returns process can turn even the most loyal customers into an increased customer churn rate. You may never have a zero percent return rate, but providing all of the information necessary for your customers to make a well-informed purchase decision will breed trust and long-term relationships. If you’d like to discuss optimizing your return process or you’re looking to re-platform your ecommerce site, do not hesitate to reach out to the Blue Acorn iCi team here.