With the growth of online shopping, returns have become the new normal. Since customers don’t always have the opportunity to touch and feel the product or try it on before they buy, they’ve turned the home into the fitting room. Customers now have higher expectations of retailers, making the returns experience an opportunity to be competitive: 96% of customers who are happy with their returns experience will shop with that retailer again.
Returns processes could improve. From the customer perspective, they want an experience that is convenient and transparent. From the retailer perspective, having a more customer-centric returns process can increase retention, generate incremental sales, and inspire brand loyalty.
Reducing friction in the returns process
What do customers not like about returns? Consumers were most dissatisfied with paying for shipping, lack of communication regarding return status, and not knowing when they will get their refund. We found that 16% of customers are frustrated with checking the refund status of their return. Communication can resolve most of these concerns. Shoppers around the globe are more likely to churn if they have a bad returns experience: 15% said they would not shop at a retailer again that did not get the returns experience right. In Australia, that number was 23%.
While not every retailer can say they have the best returns process, these consumer pain points indicate the best way to approach returns. Our third annual report on returns, “The State of Online Returns: A Global Study” highlights a few different areas in the returns process that could be improved.
Consumers are delighted with their returns experience when they are given pre-purchase transparency and post-purchase communications:
- 32% of U.S. consumers want to see the returns policy on the product page
- 24% of U.S. consumers want to see the returns policy on the home page
- Active Communication:
- 34% were informed that refund was processed
- 24% were given updates on the status of their return
Transparency affects purchasing decisions, even before they click the “buy” button. By making returns information available to customers upfront right in their purchase path, and actively communicating during the returns process, retailers can increase the chances of conversion while also improving their overall customer experience.
Consumer preferences and physical locations
In our research, we found that 38% of consumers think it is easier to return an item in-store, though only 10% of them actually made their last return that way. Many retailers are now able to provide Buy Online Return In Store (BORIS) as an option that helps meet this consumer preference and reduce friction in the experience.
By returning to a store, customers get immediate credit for their return so don’t have to wait to get their money back or worry about their return getting lost in the mail. Getting customers to return to stores can increase incremental revenue: 22% bought additional items they did not plan to purchase when bringing in their return. As the need to generate revenue increases, many retailers are trying to figure out how to replicate these benefits online with faster refund times, tracking of return packages, easy exchanges, and product recommendations during the returns process.
What if you don’t have many (or any) physical locations? In the U.S., consumers are getting used to other types of locations pretty quickly: 13% dropped off their returns at an alternate drop-off location, and 52% of those said convenience was the primary driver. In the UK and France, where click-and-collect is more mature, adoption is even higher. We have seen great success in this area with our Narvar Concierge network, where customers can pick up and return products from 8000+ Walgreens and select Nordstrom stores. Dagne Dover has already seen a 20% adoption rate, as they can now provide a more convenient option for their customers to make a return.
The future of returns
While returns will always be an unavoidable part of retail, there are key areas to consider when determining your strategy moving forward that can turn them to your advantage. Often the customers who return the most are also your highest-value and most loyal customers, so it is worth making the process less painful. Although there are many areas to improve, retailers can learn from what habit-forming retailers like Amazon are doing that has increased customer satisfaction and overall retention.
With the ability to track returns and receive proactive notifications about the return status, 61% of Amazon shoppers believe the process is easy. Customers don’t have to inquire about their return, sending unnecessary emails or calling customer support. Improving customer communications prevents routine status contacts being fielded by customer support departments, which in turn increases operational efficiency and frees them up to handle higher-level customer interactions.
Since in-store returns of online purchases can often lead to incremental sales, there is an even greater need to implement best practices. Customers don’t want to wait in long lines just to make a return, so retailers can potentially provide shorter service lines that are devoted to online returns. If your store does not have a self-service option, training retail associates on how to quickly return and exchange products is a good next step.
Building a more customer-centric returns process is one of the most important parts of creating a better experience with a brand. Better return capabilities enable retailers to manage customer expectations effectively while managing operational efficiencies. Besides increasing satisfaction, a good returns process provides the opportunity to foster trust with the customer to increase retention and build brand loyalty. When customers are delighted with the returns experience, they are more likely to come back.
To learn more about returns and gain actionable insights for your brand, check out the full version of our Global Returns Study.