With the ongoing festive season and the onslaught of the pandemic, eCommerce is one industry that is experiencing growth. It has flourished with a 20% year on year growth, and this growth has only accelerated with COVID-19. But, as online spending is increasing, so are the returns.
A new survey conducted by Yopto, gives insight into returns and how return cost could hit up to $550 billion in 2020. Further, this study also reveals that the best way to reduce product returns.
First, we need to understand:
How does the return policy of a company impact the consumer’s purchase decision?
A store’s return policy almost directly influences a consumer’s purchase decision. Hence, disregarding return policy is simply not viable. The survey further found that about 70% of the survey participants said return policy is important in making their purchase decision.
Furthermore, the study shows that 59% said they wouldn’t order from a store that charges a returning fee. And about half of the participants say they have abandoned an online order because of the return policy.
The return policy is one of the best business strategies, and rather than companies focusing on the customer’s ability to return, they should focus on reducing the customer’s need or desire to return.
Why do consumers return products?
Another survey conducted across various brands states the following reasons as to why products are returned:
- 65% of the surveyed shoppers cited ‘fit’ as a reason for their purchase returns
- 39% stated that the product description not matching the item
- While 33% said that products were as they looked different in person
- 35% of shoppers also admitted to over-ordering when buying online, and this indirectly affected returns
They also found that
- 43% of millennials buy with the intent of returning the products
- And 46% of Gen Z to buy with the intent of return
This behaviour varies with the industries, and items such as household items, tea, coffee, etc, are placed without the intent of returning. With that being assessed companies can better their technologies and communication in order to reduce returns.
Reduce returns by:
- Updating Product Listings
An accurate product description can reduce returns tremendously. As stated earlier with 39% of shoppers citing a difference in purchase and description return product, updating of product listing will reduce this number.
- Customer Reviews
Helpful information from customers motivates further purchases. Unfiltered comments, photos, and videos from other shoppers act as powerful pieces of content to gain shoppers trust. These reviews not only provide information but also boosts shopper confidence in their buying decision.
- Filter the Reviews according to topics
Filtering reviews according to topics helps the shoppers to make decision-based on criteria like fit, fabric, quality, etc, more efficiently. With accessibility to relevant and useful information, they will be allowed to make the best purchase decisions and thus reduce returns.
- Answering customer questions
By offering a Q&A section for products, consumers will get quick and reliable answers from both other buyers and the company itself. This will thus help to bridge the gap between how the product is described online versus how it looks when the buyer receives it.
- On-site galleries
Galleries of real customer photos and videos will also reduce the gap between how the product looks online and in person. This will help in bridging the online-offline gap for potential buyers and instil trust.
Opportunity in returns:
Furthermore returning of products can act as an opportunity to enhance the customer experience. By making the product return a positive experience it will create a good impression for the company and enhance loyalty.
Additionally, a follow-up on the return via SMS, email, or call to will help in personal communication. One can offer a coupon code, discount or membership program to re-engage the shoppers.
By using the following steps and realigning activities one can reduce returns and increase their profit margins.