As the dust settles on 2021, it’s clear that many of the changes we thought were temporary are in fact here to stay. This includes the much larger part of our lives which we now lead online and nowhere is this more true than ever in the retail industry.
Over the past couple of years, as businesses shifted to e-commerce and customers became more comfortable shopping online, some areas that previously made up a small part of retail operations have started to take hold. not. One of those areas was a company’s return policy.
One of the consequences of shopping online is that shoppers cannot physically interact with a product before purchasing it. This has led to many more customers discovering that a given item does not meet their needs.
This has been a major driver of the increase in the volume of retail returns made in 2020-2021. How retailers handled these returns would prove to be a deciding factor in their overall success.
However, many retailers will be surprised to learn that returns can actually increase their profits. Accenture research shows that the 5% of returning customers are 30% more profitable than the average online customer.
ShipStation’s Australian Retail Returns research, published under the title ‘Making The Difference: Returns’, provides retailers with insight into the importance of their returns policy and how they can optimize returns to ensure the long-term health of their business.
Understand the importance of a return policy
While processing returns might not seem like a productive use of time and resources for many business owners, it’s not something they can afford to overlook. ShipStation’s research revealed that:
- 35% of Australian buyers have returned at least one purchase in the past six months, and
- This figure rose to 48% for buyers under the age of 50.
A customer’s experience with the return process is one of the most important factors in deciding whether they will return to this retailer. Of the buyers surveyed, 41% said they stopped using a retailer after a bad returns experience.
Interestingly, it was not just a bad experience that turned buyers off, but their satisfaction with the return policy before purchase. Many buyers have said they are likely to carefully review a retailer’s return policy before making an online purchase, especially when buying from a retailer they have never dealt with. previously. If the policy is unclear or does not reassure the customer, that could be reason enough for them to look elsewhere.
How Retailers Can Optimize Their Return Policy
A proactive approach to returns can prepare businesses for success. A clear, streamlined, and fully integrated return policy isn’t difficult to implement, and it’s a sure-fire way to improve the customer experience and build customer loyalty.
One of the most encouraging results is that most customers who had a positive experience with physical returns made an additional purchase on that visit. For e-commerce returns, self-service return portals can reduce the pressure on administrative staff while providing buyers with a simple and painless experience.
Towards 2022 and beyond
Just as the e-commerce industry is expected to continue to grow in 2022, retail returns will continue to play an important role in the success of online businesses. New tools continue to emerge and retailers are finding innovative ways to reduce return volumes. Using augmented reality, for example, could help customers get the products they want the first time.
With the rapid expansion of e-commerce, growing pains are inevitable. By staying on top of the latest technology and viewing feedback as an opportunity to retain customers, businesses can stand out from the crowd and put themselves in a good position to handle whatever 2022 has in store.
Download the ShipStation report to learn more about how to optimize your returns.