2020 has been the year of online shopping; eCommerce has experienced 10 years’ worth of growth in just a few months, and it is currently in its busiest season yet. According to Adobe, “holiday shopping is going to pack 2 years’ worth of growth into one season,” and is expected to record a whopping $189 bn in sales, (33% increase YoY). But of course, as an online store owner you know that after the holiday shopping rush comes the infamous “returns season”…and like all other facets of eCommerce, online merchandise returns are expected to hit new records after this holiday season as well.
Fact is, you can’t run from them – returns are becoming a basic cost of doing business digitally (about 30% of holiday online purchases are sent back). However, you can set up your strategies to use returns as a profit driver. Let’s explore a few initiatives that can yield optimistic results for your business in the end.
1. Be Flexible in your Holiday Return Policies
Consider that the way you handle returns actually affects your level of sales in the first place. In general, more than two-thirds of shoppers check the return policy, and its clarity and flexibility have a direct impact on their purchase decisions. For the holidays, your return policy should also consider that many of the purchases are bought as gifts, and the items will likely not be in the hands of their “final owner” until Christmas. Therefore, perhaps an extended returns policy (beyond the typical 30-days) is in order for purchases that indicate “this is a gift” at checkout so that the person who gets the gift has a fair chance of returning or exchanging an item that didn’t bode well with them. The significance of this policy lies in the fact that these gift receivers were not the original buyer, so you have an opportunity to acquire a new customer through your returns process. Making it a memorable and positive experience is key to sprouting this new relationship on the basis of trust – a sentiment that is directly related to a customer’s lifetime value. Final thought here: once your holiday policy is developed, ensure you place it in an easy-to-find location on your website, complete with all the pertinent information, so that the shopper can purchase, and/or return, in confidence.
2. Fix your Obvious Operational Problems
Start where you can clearly see issues. If there are certain logistical steps that commonly result in customer service inquiries around “where’s my refund/exchange.” On average, customers expect the return process to be completed within a week of initiation, so you need to be extremely mindful of the ease with which your customers can journey through the returns process and come out smiling on the other side. It can have a direct impact on your future sales numbers since 92% of shoppers will make another purchase from a brand if returns on previous orders were easy. Therefore, analyze each check-point of the return logistics and smooth out any of the steps that pose as potential bottlenecks. The fluidity of your returns logistics holds a lot more weight this year – issues that seemed benign in past years could very well overload or even break the entire process after this bustling holiday season. Therefore, it could be worth your while to explore various apps and tools that make returns easier or even consider outsourcing part (or all) of your returns process. Drop-shipping partnerships can serve as a real blessing here. In the same way that they can offer wider reach to customers in different regions, they can also handle returns there so that the packages actually have to travel shorter distances, making even international or inter-state orders easier to process. So, you serve your customers faster, the shipping is cheaper, the load of returns is spread over multiple supply chains instead of just one, AND your carbon footprint can remain small.
3. Offer Free and Easy Return Options
Only 49% of online retailers offer free return shipping, but there are still 51% who are missing the mark with a majority of shoppers. Seeing as nearly four-out-of-five consumers want free return shipping, and a further 47% want easy-to-print return labels to boot, taking this on as one of your base business costs is almost a required strategy to remain competitive in today’s retail landscape. Not doing so could cost you much more in initial sale revenues than what the small percentage of returns could do to your bottom line.
Furthermore, if you happen to be a store with an online and physical presence then easy in-store returns to your eCommerce returns policy are what BOPIS is to your eCommerce sales strategies. Getting your target audience into your store has more net gains than losses, even when their original intent to enter the premises is to collect a refund. They’re much more likely to engage with your merchandise when directly in the presence of your products, which heightens the likelihood of additional purchases during their visit. Again, as we’ve previously said for BOPIS, keep the added layer of consumer anxieties regarding flocking to stores or having to wait in long lines during the pandemic in mind. As such, you can set-up a system where customers can reserve times during a chosen day to come to their return. This way you can control traffic in-store to meet regulations and help your staff to efficiently process the reverse transactions without feeling overloaded.
Shipping items back to retailers or dropping them off in-store aren’t the only ways of handling returns though. More and more consumers just want in-person return solutions because they’re more convenient and result in an immediate refund…it doesn’t have to be at a store. That’s why many online-only retailers are teaming up with third-party service providers who will maintain drop-off sites for the brand at various locations that suit their customer base. Besides this convenience for consumers, the benefits for the business are quite attractive as well. Drop-off hubs can offer a more cost-effective and environmentally friendly solution for eCommerce returns because they help cut down on packaging and diminish the carbon footprint caused by shipping via mail couriers.
4. Offer Refunds without Returns (for certain products)
Supporting your customers this way can actually have a net positive effect on your bottom line, especially for the items on which you offer personalization. Personalized products have a much lower rate of return than regular items, to begin with. Usually, the reason behind these returns is a printing issue, or damage to the product while in transit. Since personalized or damaged merchandise can’t be resold, there’s no real reason that you need them to be returned. So why not save yourself the extra cost of return shipping and simply offer a refund or store credit instead? Better yet, inquire if you can rectify this unfortunate printing/delivery blunder with a brand new product instead of a refund, and let them keep the original product as well. Your customers will be impressed by this “gratuity,” and if your margins are big enough, you may still see a net positive in your revenue. Of course, do your due diligence to protect your business by asking for pictures of the damaged/misprinted product before agreeing to send a free replacement.
5. Be Green about Returns
In 2019, retailers saw a lot of headlines focusing on the waste that returns create. Green initiatives are a topic that is top-of-mind for an increasing number of consumers. Since after this holiday season, experts expect the volume of returns to grow significantly, developing eco-friendly strategies to handle returns can have a great impact on your brand name and customer loyalty. To start, when you offer return shipping, make the packaging recyclable or reusable. This simple act can alleviate a lot of burden from our ecosystem. In addition, as mentioned above, drop-shippers and drop-off hubs can also help reduce emissions caused by eCommerce returns.
But, what about when the returned item is back under your “roof”? What can you do to be green? For your returned items that can be resold, consider open-box resale options, with deep discounts, to keep perfectly good items out of the landfills. Also, in the spirit of the holidays, charitable initiatives to augment your green ones can be a newsworthy mix for your brand. Team up with non-profit organizations to give the merchandise a “second life.” This can work not only for “in-tact” returned items but even for items that might be considered damaged by the original buyer. Some items may actually still have value and use for someone else in need if the issue is mostly small/aesthetic, and doesn’t affect its performance. As such, take the chance to make a positive difference with your returned merchandise in more ways than one.
The Bottom Line
Returns cannot be eradicated from your business’ reality, but they can be used to your advantage. It is an aspect of retail that must pay particular attention to the customer experience, as that’s the lingering taste shoppers will walk away with after all is said and done. Yes, returns start out as an undesirable undertaking for all involved, but when you make the process considerate and convenient, they shine positively on your brand name. Ultimately, this positive brand image will have a favorable impact on your bottom line as well, due to the increased likelihood of repeat business, loyalty, and word-of-mouth recommendations.
However, too many returns are indeed a red flag. Do benchmark your numbers with similar businesses in your sector. If your return numbers are drastically outside of the average, then an analysis of your overall sales and delivery workflows may be needed. Our previous blog can lend a hand in implementing steps to reduce returns and soften their effects on your business.
Offering product personalization on your merchandise is proven to diminish product return requests. The process of personalizing a product is an involved activity for the consumer and puts them in the driver’s seat of establishing the final design of their desired item. With the proper technology that provides an engaging and intuitive user experience, your customers can create their most memorable products in confidence; those that they won’t want to return! Check out what Mediaclip can bring to the table for your eCommerce business.