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?
The Walker Sands Future of Retail Study revealed that 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.
6 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. 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 lifetime Value here or Customer Acquisition Cost 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. Install an ERM (enterprise relationship management program – such as SwiftERM) as this will manage all of your email marketing for you automatically. Automated system help to minimise human error.
Below are 3 useful apps that streamline the returns process:
Shopify merchants may want to consider Return Magic, a trusty app that makes life a lot easier for e-commerce businesses. The service is completely customisable, meaning that you (the merchant) are able to adjust your return conditions (including return by dates) and thus have more control over and your return rates. Return Magic generates return labels for customers, tracks them in real time and provides the merchant with information on returns, including the reason (unsuitable, damaged, ill-fitting etc). The easy user interface improves customer experience. On your end, you will have access to all the relevant information needed to process and approve all returns. You can read more about Return Magic and look into setting this up here.
Returns Manager by Bold
This app has a really mobile friendly design for both business owner and customer. Returns Manager gives the merchant the ability to tailor return conditions, for example allowing a 3-month return on certain items but a number of weeks for something else. Both you and the customer are able to set up notifications throughout the returns process.
Returns Management System
RMS apps – see Shopify marketplace, is useful for analytics and data, providing users with information on your most frequently returned items. This is a great opportunity to assess products and work on your quality control! Another useful feature invites customers to upload images of damaged products. In the event that a product is clearly damaged and needs to be disposed of, Returns Management System allows for communication between the merchant and the customer, meaning you can save money on returns postage fees as well as streamline the refund process.
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.
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