Read more about my thoughts on ecommerce returns on MarTech.
With global ecommerce still on the rise, there’s been a corresponding increase in returns. About 30% of online purchases are returned, compared to just 8.89% from physical store sales. The financial impact is significant, with an estimated annual cost of $400 billion in the United States alone. The rising rate at which customers shop online has exacerbated an already growing challenge of managing product returns in a way that keeps both retailer and customer satisfied.
While securing the bottom line is essential, retailers also understand importance of building customer loyalty through a convenient, efficient, and pleasant return experience. Retailers can flip a usually negative situation – product returns – on its head and use it as an opportunity to build customer loyalty.
Ecommerce Returns: Customer Happiness versus Profitability
Recent statistics show that the average return rate for ecommerce is estimated at 20-30%. Of those returns, 60% are due to fit or quality issues. Online shopping is especially vulnerable to returns since customers simply cannot see the product for themselves before they receive it, and many brands still have work to do in ensuring thorough and accurate product information and inventory data. In a tradeoff for taking the risk, 75% of customers expect free returns and 35% will only shop from retailers with generous return policies.
What Does a Bad Return Experience Often Look Like?
For retailers to fully understand the scope of the issues that are creating a less-than-satisfactory return process, it’s important to gather anecdotal information from customers and pinpoint every place in the journey where the brand could have done better and retained that customer.
If the product doesn’t work as advertised or fit as planned, what is the customer’s course of action? In a bad return experience, it might be extremely difficult to find information on the return policy or how to contact customer service. Customer service might only be available in one or two ways, such as by phone call, email, or contact form. Customer service might not be reasonably timely in their response or reroute the customer to other departments and representatives. The process might require the customer to prove what they claim to be wrong about the item, deny their claims, and/or make the customer pay for the return shipping themselves.
A Hassle-Free Return Experience
In comparison, a great return experience that retains a customer might look like a partnership with a brick-and-mortar store that allows customers to return products in person with a free return label. It might mean that the customer does not have to have a conversation with customer service at all, but simply requests a label to return the product. It might mean that customer service is available over multiple forms of communication if the customer needs help, such as through online chat, text, and more. The smoother the process, the greater the probability of shopping again with the retailer.
Technology’s Role in Improving the Returns Process
While technology can be an incredible solution for return inefficiencies and frustrations, it can also cause problems when implemented improperly. For example, a brand might implement a chat feature for customer service, but the chat lags, conversations are deleted when the customer’s device switches screens, speaking to a live agent is not an option, and more. Virtual assistants and chatbots can be useful if they communicate clearly and respond in a timely manner, especially as they become more advanced and able to understand frustration, taking on a more empathetic approach.
No matter the solution, it’s crucial that it streamlines and enhances rather than hinders and complicates the customer experience. The best way to ensure technological solutions for returns result in the desired outcomes is to include these points in your strategy:
- Ensure your inventory includes clear descriptions, helpful data, and accurate imagery of products to reduce returns caused by mismatched expectations while also giving your technology, like an AI chatbot, the comprehensive data to use when curating information for a customer
- Offer accurate sizing guides and virtual try-on or see-in-room technologies to address fit and dimension issues
- Partner with brick-and-mortar stores and offer free shipping label printing for easy drop-off returns
- Implement efficient troubleshooting processes to resolve issues and help customers avoid returns
- Train customer service representatives to handle return requests promptly and empathetically
Effective returns management will not only improve customer satisfaction and retention, but also the retailer’s bottom line. Effective use of data and analytics can help predict and prevent returns as well as improve visibility in the supply chain, and developing more sustainable return processes can reduce environmental impact. Not to mention, the implementation of AI-powered chatbots that can provide instant, accurate assistance while maintaining a human touch can satisfy customers while reducing call center volume and demand on resources.
Turning returns into opportunities to build customer loyalty is critical in the competitive ecommerce landscape. It’s only through clear communication, efficient processes, and customer-centric policies that the returns process can become a competitive advantage, fostering loyalty and long-term success.
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To read more about my personal experiences with returns that led to this article, visit my article on MarTech.
