Shoppers return more than three times as many products bought online (30%) as they do items bought in store (8.8%), according to research by conversion specialists Invesp. For ecommerce companies, this means that the returns process is a critical factor in the sales and customer loyalty equation.
Let’s look at what customers want and how you can tailor your reverse logistics to keep customers happy and buying more.
There are three main reasons customers return products bought online, and they all carry roughly equal weight:
Mistakes and product damage are largely a function of internal and warehouse processes, which we won’t address in this article, but we will look at how you can help make sure that what customers get matches their expectations.
But first, let’s look at their expectations around the returns process itself.
The vast majority of customers (79%) expect NOT to have to pay for shipping when returning an item.
In addition, they want the returns process to be as simple and hassle-free as possible — easy to do and “no questions asked.” In fact, this is so important to them that 67% stated that they check the e‑retailer’s returns policy before making a purchase.
Since returns are not going away and the cost of shipping is constantly in flux, retailers need to continually revisit ways to reduce the costs of this aspect of the online selling process. Investing in strategies that improve the reverse supply chain will increase margins. Here are three ideas.
Accept omnichannel returns
Amost two-thirds (62%) of shoppers are more likely to purchase online if they can return in-store. This policy can be a win-win for both the retailer and the consumer, since it cuts down on return shipping costs and makes it convenient for the shopper to return the item. Not to mention that while in the store, the consumer might do some additional shopping.
Sell it open box
Many returns come back in less-than-perfect condition. Rather than put them in a landfill and write off the entire amount, some retailers, such as Best Buy, sell returned items as “open box” at a reduced price. The retailer benefits by salvaging some of the cost, and the consumer benefits by getting an adequate product at a lower price.
Use cheaper shipping solutions
Returns do not have to make it back as quickly as they are delivered to customers. Here’s where ecommerce companies can take advantage of the cheaper rates offered by the USPS, UPS, and FedEx for longer delivery timeframes. As long as products are handled efficiently once they’re received back at the warehouse and shipping costs are minimized, the reverse logistics process is working.
In addition, many retailers offer immediate credit for returns or even don’t require an item to be returned if its value is below a certain threshold — which all customers appreciate.
Of course, the best solution of all is to prevent returns in the first place, and this is an area where technology is your greatest strength.
Augmented Reality
Almost a quarter of customers return an item because it looks, feels, or functions differently than they had expected. Better product information helps manage customer expectations by enabling them to make more informed choices.
One technological development that serves this purpose well is augmented reality (AR), which allows you to give the consumer the ability to try products at home before buying. Using AR, customers can see how products will look in their homes and compare items side by side in 3D — and then press the “Buy Now” button with good confidence that what they see is what they will get.
With ecommerce claiming an ever-larger portion of all retail, returns will only become a larger and more costly issue for retailers. At the same time, maintaining customer satisfaction through the returns process — or preventing the need for returns in the first place — is key to customer loyalty. Smart ecommerce companies are using creative and innovative solutions to make returns a competitive advantage.
For any questions on creating a good returns process, contact us at info@transportationimpact.com.