Returns and exchanges are a nuisance for consumers and retailers, and have remained a consistent pain point across the industry. Retailers often have to pay astronomical costs for the return of a single product that may, or may not, be resold. This has led to consistent losses over time, as many retailers struggle to reduce this issue.
An added complication is that now, more than ever, consumers expect free shipping and returns when shopping online. The added convenience of having items directly shipped to the consumer’s front door, and no-hassle returns makes shopping easier.
On average 40% of products ordered online are returned compared to 8.98% of brick and mortar sales. However, since consumers are unable to try on pieces or see how they look in person, or the best size to order, online purchases are most often returned.
According to the 2018 annual eCommerce survey by Dotcom Distribution, 91% of consumers said free shipping influences future purchases. With this in mind, retailers are facing the pressure to give consumers what they want, or risk losing the consumer’s loyalty and service to a competitor.
Click here to learn how Moosejaw reduced size sampling by 24%.
The Cost of Returns
In 2018, US consumers returned an estimated $369 billion worth of unwanted merchandise. Aside from the cost of the actual returns for retailers, the physical loss of items that are unable to be resold is adding to the extent of costs these retailers have to cover.
Many retailers must incorporate the cost of returns into their pricing strategy. While it is impossible to completely reduce returns down to nothing, there are many ways retailers can provide consumers with personalized offerings to reduce returns substantially.
L.L. Bean was seeing much older, worn-in items being returned so they updated their lifetime return policy. This allowed the company to maintain high-quality services by offering customers the ability to return products within one full year of purchase.
Many retailers are looking to turn potential returns into exchanges instead. By offering buy online, pick-up or return in store (BOPIS), the retailer is then able to increase the likelihood that a store associate could assist in helping a consumer find an alternative product that meets their individual wants and needs.
While this strategy is useful in getting customers to store to find alternative products, many consumers still prefer the added convenience of online shopping, and expect to have their needs met the first time without having to go in store.
So, how can retailers make sure they get it right online, to avoid the added hassle of consumers coming in-store? The answer is personalization.
Understanding Consumer Wants and Needs
As a fundamental starting point, retailers must determine where the discrepancies between in-store and online shopping lie. Often, returns are due to issues with the size, fit, and size of products, since consumers are unable to try products on when they purchase online.
According to research conducted over a 9 year period by the Baymard Institute, improving checkout flow and design can account for $260 billion in recoverable revenue and a 35.26% conversion increase.
Offering consumers personalized technology features will leverage the ability for the consumer to purchase a product in the size, style, and fit that matches their preferences best.
Research by Epsilon found that 80% of consumers are likely to purchase from a brand that offers a personalized experience. Personalization adds value for consumers, and retailers.
Consumers can be sure they are receiving a true 1-to-1 shopping experience that empowers confidence in shopping for clothes and shoes online. Retailers, in turn, can better understand the shopping behaviors and unique preferences of its consumers.
This enables better planning and insights into the best ways to deliver truly personalized shopping experiences to each and every consumer.
Click here to learn how True Fit can help your brand reduce fit-related returns by 30-50%.