How to reduce your rate of return - SwiftERM

How to reduce your rate of return. The e-commerce industry today is booming and shows no signs of slowing down. It does however come with its drawbacks. As customers don’t get the chance to try before they buy, to some degree, they are submitting to the fear of the unknown. When an item arrives, it may not be as it appeared online, it may not fit, or it could be damaged.

E-commerce purchases are undeniably more high-risk transactions than in-person transactions. Whilst the customer has access to some information about the item, there is no way that they can be 100% sure about what they are purchasing. Many e-commerce merchants have recognised these consumers doubts and responded by providing generous returns policies – e.g. free returns paid for by the merchant.

What’s the deal with returns?

Free shipping is more important to a consumer than fast shipping. Whilst providing a free shipping/returns policy might counteract any doubts the consumer has, in turn increasing sales, many businesses are equally suffering from increased returns. What’ve you got to lose if you can just return the item anyway, right? As a result, businesses are struggling to balance their return rate with their sales figures. Returns not only have a negative impact on the customer experience, but are costly and a logistical nightmare. It’s all well and good to increase sales figures on your store, but if your sales are more or less balanced by your return rate, then it’s you who’ll be covering the costs.

As you expand and experience a growth in sales, it’s inevitable that your return rate will increase. It’s all about having a system in place to manage it. Preventing unnecessary returns, setting up a system that manages them efficiently, and maintaining your customer relationships has become an essential part of having an e-commerce business.

How to reduce your rate of return

8 steps for business owners seeking to reduce return rates

1. Allow customers to leave reviews

Consumers put their faith in other consumers. Product reviews not only possess the ability to sway a customer’s find, but also offer additional information that you might not otherwise know about an item. Customers are more likely to purchase a product which is rated highly by other fellow users, with a high volume of sales, and are thus less likely to return it.

Product reviews let you (the business owner) in on the customer’s point of view, and this is vital information. Adding a product review feature allows the customer to write a description with pros and cons on an item. It is essential that your business is looking closely at the feedback submitted for each item: it is a rich source from which your business can gain insight into the quality of your products. When a customer includes specific, practical details about an item, it’s worth adding these to your product description to ensure that future customers have all the details before they make a purchase. Most of the time a customer will return an item because of the discrepancy between their expectation of the product and the actual product itself. Product reviews act to close this gap, and should assist with reducing your return rate. If an item is regularly receiving poor reviews, ensure to play close attention to that particular product, as it may need some improvements.

2. Include high resolution images and videos

Ensuring that the quality of your product lives up to the consumer’s expectations is extremely important. Make sure that you are including several high quality images, taken from a variety of angles. To maximise conversion rates and reassure customers, some merchants include 360-degree views of an item, or short videos to display the product in its entirety. If a customer is frustrated and not sure how to use your product, they are more likely to return it. Short step-by-step videos can can be helpful if your product requires the customer to set it up. Streamlining this process for the consumer minimises your rate of return and can seriously improve the customer experience.

3. Include thorough and accurate product descriptions

The description that you provide for each product on your website should effectively convey the item’s details, including its material, size, weight etc. Size guides are an essential part of any online clothing store. Ensure that the customer understands sizing to prevent them from returning an item that they like, but is ill-fitting. It comes as no surprise that fashion websites have the highest return rate in the e-commerce industry, considering customers usually have the opportunity to try on an item in-store to assess how it fits. This is the missing ingredient in online shopping. However, online clothing stores are paving the way in their returns strategy, heavily investing in research that looks into the consumer’s motives for returns. If you run an online apparel store, be sure to provide an accurate size-guide and an in-depth product description that covers all necessary information.

4. Provide excellent customer service

In business, it’s inevitable that things will go wrong, and it’s unrealistic to expect to eliminate 100% of returns when you run an online store. What your business can do is offer exemplary customer service when they have a bad experience. Customers feel reassured and looked after if they are able to easily make contact via phone, email, social media or live chat. You can read more about multi-channel customer service in more depth here. Understand that depending on the customer, this may be essential both pre and post purchase.

Before making a transaction, a customer who is able to contact your business and ask any questions they may have, minimises the prospect of returns. As your business grows, it’s essential to implement features that allow for smooth communication between you and your customers. At a later stage, you could consider implementing CRM software (Customer Relationship Management Software). This establishes customer service contact channels, and provides your employees with relevant information and customer history. CRM software allows your business to tailor customer service to the individual. You can read more about building customer relationships through your e-commerce site here.

5. Iron out your errors

During busy times, and as your business grows, it’s important to avoid errors wherever possible. As e-commerce figures ascend, human error can damage smooth transactions and consumers may (through no fault of their own) receive the wrong item, have items go missing, or receive the disappointing news that the product they ordered is out of stock. Defining and implementing an ERP (enterprise resource planning) system will manage all of your transactions in one place. Look into an automated system that will help to minimise human error.

6. Analyse data

In order to have control over and ultimately reduce your return rate, you should be closely analysing and examining which of your products are performing poorly. The proof is in the numbers. Once you have identified which products are performing poorly, look more closely at customer reviews and analyse the problem. If a product is consistently returned, perhaps you need to address its quality or the product information that is available to customers on your site. For more information on the importance of data and analytics, click here.

7. Mobile commerce

Mobile retail is extremely popular nowadays, so improving your mobile user experience will help to minimise return rates. A customer who is having difficulty even accessing product and sizing information is more likely to feel dissatisfied with a product and thus return it. For more information on setting up your Shopify store from your phone and improving the customer interface, click here.

8. Predictive personalisation

The most unappreciated benefit of predictive personalisation is the almost entirely obliterated RoR rate. If your offer promotions and incentives through your marketing and those products sounds brilliant at first glance to your consumers (if you are good at your job), then don’t be surprised to have a hike in your rate of returns. When you include predictive personalisation into your customer care and marketing, it identifies which products each individual is most likely to buy, and keep, next.

The “and keep” is important because predictive personalisation software has already eliminated what they don’t keep from future selections of offerings. The mission critical element is that this is done on an individual customer basis, up close and personal to each and every human-being that makes up your database of customers.

Beware those purporting to offer personalisation, in a recent study we conducted because it suits their purposes, most companies offering this are actually offering segmentation, and as we know herding people together in groups because it makes life easier, is not personalisation. If someone called you “you people’ you’d be mortified and offended, so why do it to your customers?

 

 

We hope you enjoyed this article, intended to help improve our client’s profitability. It reflects the care SwiftERM offer, if you need help please ask, we can often help for free. If you haven’t already done so, then please enjoy a FREE month’s trial of our predictive personalisation software on your site, to see how powerful it is. Here

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