Return-led behaviour is a rising tide, some will drown
Against an already tight backdrop of shrinking margins, increasing interest rates and reduced consumer spending, how can retailers reduce return purchase rates, streamline operations and increase a customer’s lifetime value? Wunderkind's ANZ country manager, Jamie Hoey, explores.
Despite being a number of years out of lockdowns, the pandemic maintains a significant stronghold over the way we work, shop and live. The past couple of years has seen the pendulum swing from entirely digital, back to instore, and now is seemingly starting to equilibrise.
When online shopping, consumers have come to expect convenience, variety and enhanced web experiences alongside additional benefits such as free shipping and hassle-free returns.
Customers make returns for a variety of reasons – damaged items on arrival, receiving the wrong item, sizing, unmet expectations. According to Statista, the most returned online purchases in Australia are clothing (16%), followed by bags and accessories, and shoes (both at 11%).
However, as the number of returns grow, retailers face an increasing battle to support the cost of logistics and reverse-logistics, potential damages and missed sales opportunities.
Against a backdrop of shrinking retail margins, increasing interest rates and reduced discretionary spending, how can retailers reduce return purchase rates, streamline operations and increase a customer’s lifetime value?
Clearly communicate your returns policy
Having a clear returns policy that’s easy for your customers to find when shopping online helps manage expectations, minimises disputes and enhances the overall shopping experience. Providing distinct return information helps customers make informed choices first time around, reducing uncertainty and potential post-purchase regrets.
As part of your returns policy, ensure you’re providing clarity on return procedures, timeframes, and conditions for refunds or exchanges, as well as any categories or items (such as sale items, swimwear or jewellery) that may not be covered as part of standard returns policy.
Make it easy for customers to buy the correct items to begin with
Streamlining the customer buying process is a priority in today’s retail landscape – both in the physical and digital realms. If you aren’t already, investigate employing AI and machine learning technologies to offer precise recommendation engines, product and customer similarity, or propensity models.
Service AI offerings, such as automated styling tools where customers can virtually try on clothing or visualise furniture in their homes before making a purchase are also becoming more commonplace. From virtual try-ons, detailed descriptions and detailed sizing guides, the opportunity to enhance satisfaction and product suitability offers customers the ability to view and judge products in a highly realistic and iterative way ahead of purchase.
Recently, Amazon announced four AI-powered innovations designed to provide customers with personalised size recommendations, review highlights, re-imagined size charts, and fit insights. Similarly, Ray-Bans offers customers an interactive style guide for customers shopping online to virtually try on glasses before purchasing.
Connect your physical and online presence
Connecting your physical and online presence means investing in the ability to identify a shopper when they move from one channel to another – for example from app to website to instore – and understanding the intent signals along the way.
Wunderkind research into Aussies purchasing journeys indicated 73% of Aussies often research their purchases online before buying in store. And depending on the item, 57% have a preference towards seeing their purchases in store before buying online.
Just as the consumer journey to purchase does not adhere to a single channel or moment of consideration – neither do returns journeys. Glue Store, for example, has a Customer Experience Center on their website, offering customers the option to return online purchases in store provided the return conditions are met.
Optimise your returns data
Returns optimisation focuses on improving the return process from initiation to resolution. A well-optimised return process not only satisfies the immediate customer need, but streamlines the process to minimise the impact on resources and cost, and contributes to a more customer-centric approach.
Consider the reason customers have indicated for their return. If it’s product sizing, consider adding a sizing chart or fit guide to the website for customers to access prior to purchase. If particular items are regularly being broken in transit, consider the packaging utilised.
Continue providing personalised experiences and outstanding customer support
In today’s highly competitive retail environment, remember every engagement with your customer is an opportunity to create a positive customer experience – even in returns. In fact, PwC research suggests 32% of customers would stop using a brand after one bad experience.
Keeping that personalised touch and offering outstanding customer support often make the difference between fortifying customer loyalty or losing a customer. Consider installing live chatbots on your website, or offering customers free returns in store.
Ultimately, customers are more likely to return for future purchases when they have confidence in a hassle-free resolution, creating a win-win scenario that benefits both the consumer and the retailer in the long run.
The nature of shopping is ever-evolving as customers seek flexibility and choice in how and where they shop. In this environment, the key to success lies in providing both physical and online experiences that not only meet, but exceed, their expectations.
Utilising the above will ensure a seamless customer experience to maintain customers for the long term.
Jamie Hoey is general manager Australia at Wunderkind.
Keep up to date with Mumbrella Daily
Have your say