As the dust settles on 2021, it is clear that many of the changes we had assumed were temporary are in fact here to stay. That includes the much larger portion of our lives we now conduct online and nowhere is this more true than ever in the retail industry.
Over the last two years, as businesses turned their focus toward e-commerce and customers became more comfortable shopping online, some areas that had previously made up a small element of retail operations began to take precedence. One such area was a business’s returns policy.
One of the consequences of shopping online is that shoppers are unable to physically interact with a product before they buy it. This has led to many more customers finding that a given item does not suit their needs.
This has been a major driver behind the increased volume of retail returns made in 2020-2021. How retailers handled those 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. Research by Accenture indicates that the top 5 per cent of returners are 30-per-cent more profitable than the average online customer.
ShipStation’s research on retail returns in Australia, published as “Making The Difference: Returns,” offers retailers insight into why their returns policy is so important and how they can optimise returns to ensure the long-term health of their business.
Understanding the Importance of a Returns Policy
While processing returns may not feel like a productive use of time and resources to many business owners, it is not something they can afford to neglect. ShipStation’s research found that:
- 35 per cent of Australian shoppers have returned at least one purchase in the last six months, and
- This figure jumped to 48 per cent for shoppers under 50.
A customer’s experience with the returns process is one of the most important factors in deciding whether they will shop with that retailer again. Of shoppers surveyed, 41 per cent said they had stopped using a retailer following a poor experience with returns.
Interestingly, it wasn’t only a poor experience that would turn shoppers away, but their satisfaction with the returns policy prior to purchase. Many shoppers said they were likely to scrutinise a retailer’s returns policy before making an online purchase, especially when buying from a retailer that they had not dealt with before. If the policy is unclear or fails to reassure the customer, that could be reason enough for them to look elsewhere.
How Retailers Can Optimise Their Returns Policy
A proactive approach to returns can set businesses up for success. A clear, streamlined, thoroughly integrated returns policy isn’t difficult to implement, and it is a sure way to improve the customer experience and increase customer loyalty.
One of the most encouraging findings was that most customers who had a positive experience with physical returns made an additional purchase on that visit. For e-commerce returns, self-service returns portals can reduce the strain on administrative staff while offering shoppers an easy, pain-free experience.
Looking to 2022 and Beyond
Just as the e-commerce industry is set to keep growing 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 instance, could help ensure customers get the products they want the first time around.
With the rapid expansion of e-commerce, growing pains are inevitable. By staying up to date with the latest technology and approaching returns as an opportunity to increase customer loyalty, businesses can set themselves apart from the crowd and put themselves in good stead to handle whatever 2022 has in store.
Download ShipStation’s report to find out more about how to optimise your returns.