One might have expected a major shift in returns behavior, but our May 2021 Digital Commerce 360/Bizrate Insights research indicates otherwise based on 1,029 online shoppers. While consumers are certainly ordering more, they are more strategic in their shopping, which helps keep their return activities under control.
According to the National Retail Federation, online returns more than doubled in 2020 from 2019. Ecommerce accounted for $565 billion, or 14%, of total U.S. retail sales. Plus, approximately $102 billion of merchandise purchased online was returned.
It is positive that 72% of our online shoppers surveyed return 5% or less of their online purchases, though clearly some shoppers are chronic returners given the overall ecommerce volume.
Despite the challenges retailers experienced with returns during COVID-19, shoppers expect their return rates to remain relatively consistent. Most shoppers intend to return about the same number of products post-COVID-19 (63%), while 17% will return less and only 2% more. Stores will see additional returns though not significantly higher as one might have expected given past limitations during COVID-19. Those who intend to return more (8%) is on par with those who intend to return less (7%). These same shoppers also intend to ship back less to the retailer (5%), while only 2% intend to ship back more.
I thought it would be valuable to share eight tips to keep returns on this trajectory, particularly in anticipation of the holiday season.
1. Be vigilant and revisit your return policy.
For many shoppers, the return policy is important to them when placing an order, so putting in place both fair and accessible policies will help keep return rates low. It falls No. 4 on the list of considerations regarding returns of online purchases for 43% of online shoppers and included the time frame to return and any restrictions.
I tend to buy from a limited number of retailers and some I have chosen specifically for their customer-centric return policy. Others I have had customer service interactions with so I know how they respond when I or others try to bend the rules. This is often the best way to truly know a retailer and no one fits this bill better than Nordstrom. Flexibility is key and this is the first time I have seen a retailer taking returns curbside, which is the height of convenience. Shoppers can quickly go through its online returns process with or without their order, making it seamless.
From a frustration standpoint, there is still work to be done around policies. 23% of online shoppers found return policies too restrictive. Even more critical is making one’s policies accessible and easy to understand as 18% were unable to locate the retailer’s policy, and a similar number of online shoppers (16%) thought that the return policy was hard to understand.
2. Investments in imagery aid in keeping rates low.
Shoppers are hungry for information and that begins with imagery. For products that are pricey, a robust set of high-quality images from different angles not only can drive conversion but also averts returns as shoppers are hyper-aware of what they are buying. Williams-Sonoma includes both location and detail-based shots covering its bases for buyers.
3. Size guides and related tools are valuable for shoppers.
Repeat orders from preferred retailers suggest that shoppers know what they are looking for and when sizes come into play, retailers have wisely implemented more sophisticated guides to help them through the process. In our 2021 Digital Commerce 360 Apparel survey, 89% indicated they use size guides because they are an integral part of apparel, accessory and shoe shopping. This Zappos example boasts broad imagery and a quick sizing overview on everything from size, width and arch support. It also highlights its calculator that allows shoppers to tell which shoes fit and lets the algorithm take it from there.
4. Offer free online shipping if it is financially feasible.
It behooves retailers to be introspective when it comes to the price of returns. What online shoppers want is clear, and it starts with free return shipping. 74% of online shoppers surveyed take this into consideration when placing orders. In fact, according to Digital Commerce 360’s Top 1000, 28% of retailers make this feature available, showing its influence among sellers.
5. Assess whether you are making it convenient for your customers to complete returns.
Convenience is a funny word and tends to be very personal. Online return processing, which is available via 46% of the retailers in Digital Commerce 360’s Top 1000, surely saves shoppers time when they go to make returns. On sites like Amazon, returns can practically be completed in a matter of minutes. This has become the standard that all retailers must live up to and any obstacles may hurt you down the road. I would also include the time to process the return, even though only 17% of online shoppers noted that this matters to them. From labels to clear information, anything retailers can do to save shoppers time is always appreciated.
Aside from Amazon, I have always favored making my returns at the store. My urban location is convenient for most retailers, and I like to see the immediate credit versus the wait time that might be a factor for an online return. When that option was no longer available during the pandemic, I was more careful when placing online orders, and perhaps that has affected the way I make my purchases today.
The following returns-based convenience factors should be of interest including:
- Convenience of shipping back orders to retailers: 49%
- Convenience of store-based returns: 36%
- Store-based return options: 32%
- Time to return: 28%
- Printing a return label inconvenient: 20%
- Store return inconvenient: 16%
6. Is the price right?
With 46% of online shoppers taking into consideration the cost of a return, this too must be addressed. While small, lightweight items may almost always be cost-effective, it is the larger, heavier items that are of concern as costs can skyrocket for shoppers.
Shoppers find fees and return timing most frustrating when returning items as indicated:
- Having to pay for return shipping: 63%
- Paying restocking fee: 53%
- High fees associated with the return shipping: 44%
- Taking more than a week to get credit: 28%
7. Customer service experiences matter when returning products.
Customer service support with the right training must ride along with return policies. 29% of respondents had difficulty reaching a customer service representative, and 21% were disappointed with a lack of return status communication.
8. Address evolving return options.
The customer’s desire for convenience means multiple touchpoints for shipping, pickup and returns should be evaluated. Omnichannel is now entrenched behavior and should be in place for store-based retailers. From the returns’ standpoint, 25% of survey respondents returned to a physical store. A recent email from Whole Foods caught my eye as it reminded shoppers of the convenience of returning their Amazon orders when they do their grocery shopping.
Of course, stores like Kohl’s believed that offering Amazon Returns would serve as both a traffic driver and welcome convenience for its customers. They too promote this option, and our research shows the impact of such services. Lockers and return aggregators are also expected to see traction as shoppers seek out greater conveniences that suit their personal circumstances.
Returns are here to stay, so it is all about minimizing their number. By acknowledging the factors that shoppers review when buying online, retailers can ensure that the policies and conveniences that they value are part of the returns package being put in place. While returns may be viewed as a form of customer service, the upside is that when done well they can also be an excellent retention strategy.