As an online retailer, you probably would have experienced this situation (mostly several times) – a customer purchases a product from your store, and you are jubilant that your marketing efforts have paid off and you’ve made a sale.
After a couple of days, you receive a call or an email from the customer stating he/she wants to return the product. Product returns are one of the major woes of all ecommerce retailers.
Returns are time-consuming, expensive, and – to phrase it bluntly – very annoying. Returns not only impact your bottom line but also damage the reputation of your brand, making customers lose confidence in your brand.
According to the Washington Post, the average product return percentage in the retail business is just 8%. However, the numbers are significantly higher for online businesses. The average ecommerce returns in 2018 were 20%, and it jumped to 30% during holidays and stood at 50% for luxury products.
As an ecommerce retailer, to maximize your profits and increase the bottom line, you have to work on lowering your return rates. And, true to the old saying, “Prevention is better than cure,” preventing returns from occurring in the first place is always more effective than handling them.
Ok, this may seem counter-intuitive but hear us first.
What’s a flexible returns policy? It empowers the potential customer to buy a product from your brand confidently knowing that he/she can return it later if they don’t like it or it doesn’t seem good in person. It’s a customer-centric returns policy.
You may wonder that by providing your customers with a liberal return policy, more customers are likely to send their products back. But that isn’t what happens.
Let us explain how: most e-retailers have a short return window – mostly within 2 – 5 days of receiving the product. This makes the customer anxious to return the product within the timeframe. Once he/she gets the product, they don’t have any breathing time as they have to start the return procedure immediately.
When you provide customers with longer return timeframes, it triggers a phenomenon called the endowment effect. In simple terms, the longer the customer holds on to the product, the more attached he/she will feel towards it. In other terms, he/she is less likely to send it back.
Also, remember that its human nature to forget things. And with an increase in return timeframes, the customer is most likely to forget all about the product or start using it.
The Key Takeaway: Draft a return policy that works best for your business by analyzing existing return data. However, ensure that you don’t fall prey to customers who use the product during the liberal timeframe and then return it later. To avoid such situations, set up certain clauses for a return like – product should be in good condition, tags should not be missing, etc.
Smart ecommerce retailers know their customers. Make sure to develop customer personas by analyzing your existing customer database. You have to work on identifying high-risk customers. When you segment customers based on their return potentials, you can tailor your marketing campaigns to suit different personas. If you are finding it difficult to handle customer segmentation by your own, you can hire WooCommerce specialists to do the job for you.
Let’s say – you are promoting a campaign to sell pink shirts to create awareness for breast cancer. However, since you’re providing the shirts at an offer price, you don’t want to send the offer to customers who are likely to return.
Additionally, customer segmentation data can be used to turn product returners to buyers. Let’s say; you have a best-selling product that has plenty of positive reviews and a large number of satisfied customers. You can send an exclusive offer promoting this product to previous returners. This way, you can be confident that nothing is wrong with the product, and the customer is not likely to return it.
The Key Takeaway: By segmenting customers according to their return percentages, you can send customized offers to different categories of customers, thereby reducing return rates.
One of the most common reasons customers give for returning products is that – it doesn’t look like the product photograph. 23% of all product returns are due to incorrect or poor photographs. Bridging the gap between the consumer’s expectations and the actual product is a huge challenge for ecommerce retailers.
The easiest way to overcome this challenge is by providing detailed, high-quality photographs in your ecommerce website design. Unlike brick and mortar stores where customers can touch and feel and even try-on products, online buyers have to do only with photographs and product descriptions.
By providing high-resolution product images, customers can zoom in and take a closer look of the product’s material and make. You need to work on empowering the customer with as much information as possible about your product, so that they can make the right purchase decisions, without having false expectations.
The Key Takeaway: Include several styles of product pictures – on a model, on a mannequin, and the product alone (to allow customers to see what the product looks like by itself). Additionally, using 360-degree views of the product is a great strategy as it gives customers a complete picture of what they are buying.
With different sizing charts, it’s now difficult for customers to envision how the product will look on them. You can overcome this challenge by getting your Custom WordPress Development Company to include an Instagram product gallery for products.
Get previous buyers to showcase their purchase on their Instagram account by giving them a small incentive like 5% off on the next purchase. In return, you get a gallery of images of previous customers wearing your product. This gives potential customers a more realistic expectation of the product.
This applies mostly to fashion retailers. One of the biggest downsides of online fashion shopping is that – customers cannot try on a product before they purchase it.
Some popular fashion retailers like Myntra have innovatively circumvented this by providing customers with a try-and-buy option. Customers can order a few products in different sizes, try them, while the delivery person waits, keep what they like, and return the rest.
The Key Takeaway: If such a system is not possible for you, then you need to provide customers with other options like detailed sizing guides and online fitting tools. While sizing is a major issue for fashion retailers, other retailers like furniture sellers also benefit from using virtual room planning tools and other sizing guides.
Customer reviews are doubly beneficial. Positive reviews generate more sales, while negative reviews help other customers learn something more about the product. For instance, customers may suggest new ways to use the product or say something about the product that you have forgotten in the product description.
This helps potential customers make the right purchase decisions, thereby avoiding the chances of returns.
The Key Takeaway: As mentioned above, provide customers with a small incentive and a reminder to leave product feedback.
Regardless of how much information you provide on the product page, your customers are likely to have more doubts. This is why it’s essential to offer 24 * 7 customer support. Using a live chat feature on your ecommerce portal helps customers clear their questions then and there, thereby avoiding unnecessary returns.
The Key Takeaway: Try to provide customers with an online live chat support feature. Additionally, by equipping your customer service staff with a fully, integrated CRM system, the support team will know more about the customer – who he/she is, their previous orders, preferences, etc., providing relevant information. This transforms customer service from a merely good one to an excellent one.
One of the main reasons for product returns is not because customers didn’t like the received product, but they received a wrong item. Damaged products account for 20% of all returns and wrong items account for nearly 23% of all returns. Ecommerce sellers are likely to make mistakes in shipping, especially during busier times like seasonal sales, etc.
The Key Takeaway: Relying on spreadsheets and post-it notes to handle product packaging and dispatch is not the right strategy as you are prone to make mistakes. Instead, retailers have to focus on implementing an ERP system that handles orders across channels in a single place. A Magento web development agency can help you integrate an ERP with your online store.
Using an ERP will help product pickers, and packers get the orders right first time since there is no manual processing involved.
Finally, don’t forget the right packing. It’s not only important to send the right product to the customer, but also to ensure that the product arrives in the right way. Use strong packaging that will withstand rough handling during transit. Also, with today’s customers increasingly concerned about the environment, try to rethink your packaging material – avoiding single-use plastics, if possible.
Make use of the seven strategies listed above and reduce returns making your customers happier and increase your profits.