Shopping patterns are shifting.
The ecommerce surge of 2020 has many businesses also facing a surge of product returns.
These two things often go hand in hand.
As the overall rate of online shopping increases, the number of product returns will also increase.
However, the shakeup of buying habits could have returns outpacing traditional patterns and eating up your profit margins.
To understand the impact of product returns on the post-COVID-19 ecommerce landscape, Yotpo released a new survey about the current state of product returns. (Disclosure: I work at Yotpo.)
The insights reveal that the best way to reduce product returns isn’t a better shipping system (although that may help too), but through on-site technology and communication.
What’s the Business Cost of Product Returns?
A store’s return policy is an important factor in the buying decision.
It simply isn’t an option for brands to not offer returns.
About 70% of survey participants said that the return policy was important to their purchase decision.
If a fee is charged for returns, 59% said they wouldn’t order from that store.
About half of the participants say they have abandoned an online order because of the return policy.
The ability to return is so important to customers, and the best business strategy is not to limit the customer’s ability to return.
Instead, the goal should be to reduce the customer’s need or desire to return.
Doing this involves hacking into the shopper’s mindset and improving the interface of the customer journey.
What’s the Main Reason People Return Purchases?
Reasons for return will vary by industry and brand.
However, the national survey across all brands reveals that fit is the top reason that many people return an item, with 65% of shoppers citing this reason for their purchase returns.
Product description not matching the item caused 39% of shoppers to return items, and 33% said they returned products because they looked different in person.
There’s also the issue of shoppers buying with the intent of returning.
Across all shoppers, 35% are over-ordering when buying online, but the rate is even higher among younger shoppers.
Among millennials, 43% buy with the intent to return products, and for Gen Z, this jumps even higher to 46%.
This behavior also varies by industry.
It’s not likely that shoppers buying household goods or products like coffee would place orders with returns in mind.
However, this behavior is very strong in the fashion industry with 66% of shoppers saying they ordered more items than they intended to keep.
Especially as COVID-19 has changed eating and exercise habits, assessing clothing fit can be even more difficult.
This can mean shoppers order multiple sizes with the plan to return the option that wasn’t right.
How to Reduce Returns Through Better Product Info
Now that we know what’s driving most returns, we can identify how to reduce them.
In short, reducing returns is about better product information.
If a shopper’s questions can be answered before they buy, they’re more likely to purchase the products that are a good fit for their needs while also reducing the uncertainty that drives over-ordering.
Focusing on these three listing components can help you reduce product returns.
1. Updated Product Listings
Improving your product descriptions can go a long way to reducing returns for the 39% of shoppers who say their purchase was not as described.
Don’t make the mistake of thinking descriptions are static.
Keep descriptions updated to accurately reflect shopper feedback and trending search terms.
2. Leverage Customer Reviews
The unfiltered comments, photos, and videos from other shoppers are one of the most powerful pieces of content on your website.
The IRL experiences from peers can provide helpful info about fit, quality, and satisfaction.
Shoppers trust other shoppers.
Not only do reviews provide helpful information, but they also improve shopper confidence in their buying decision.
3. Ability to Filter Reviews by Topic
We all know that collecting more reviews and ratings improves conversions.
After all, feedback from five customers isn’t nearly as powerful as 500 customers.
However, the most effective interface gives shoppers the ability to filter reviews by topic so they can easily identify comments on decision-making criteria like:
- Fit.
- Fabric.
- Quality.
By having access to the most relevant information, they can make the best decision.
How to Use Product Returns as an Opportunity
Improving your on-site information can help you reduce product returns, but you won’t be able to eliminate them.
Rather than taking the net loss on returns, successful brands are using the process as an opportunity to grow the customer relationship.
Make It a Positive Experience
Product returns are a powerful touchpoint.
Your company has an opportunity to make a good impression and resolve the customer’s issues.
This transaction is so important that when returns are easy, 92% of shoppers are likely to order from the store again.
This increases customer LTV and turns the returns process into an asset.
Follow-up via SMS
Rather than ending the interaction with a refund, use the product return as the start of a conversation.
Sending an SMS message is one of the best ways to follow-up because of the high open rate and personal method of communication.
Keep it casual, and ask the customer why they returned the product or another relevant introductory question.
In response to their feedback, you can offer a discount code, make a product suggestion, or invite them to join your membership program.
By re-engaging shoppers after a return, you’re growing your brand relationships.
Summary
Through a combination of reducing returns and growing customer relationships, your company can avoid a dangerous situation where returns are eating your profit margins.
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