One aspect of growth and its increase in sales is that it usually means more returns. According to National Retail Federation and Appriss Retail, in 2022, retailers expect more than $761 billion in merchandise sold last year to be returned by consumers, accounting for an average of 16.6% of total U.S. retail sales.
To better understand online shoppers and their relationship with returns, Digital Commerce 360 and Bizrate Insights conducted in August 2022 its annual return survey of 1,098 online shoppers. On a positive note, 57% of online shoppers return 5% or less of their online purchases. I did, however, find it interesting that online shoppers are returning more of their online purchases with the year-over-year numbers as noted below:
Despite these strong numbers, all retailers have no choice but to be vigilant in keeping returns to a minimum. The question is how they can best make that happen.
Status quo with returns
When asked how they expect their return behavior to change in 2022, 51% of shoppers said they intend to return about the same amount of products this year with little shift in methodology. Beyond the majority, 24% will return less Just 11% expect to return more.
Consumers expect little change in return methodology, with store returns on par for those that may return less (9%) or more (8%). There also appears to be little change except for the 6% who will be shipping back more to the retailer, with 5% planning less. Meanwhile, the same suggests they will conduct more curbside options.
Just 7% of Amazon shoppers intend to return more of those products to a physical store. A group of non-Amazon returners will take advantage of drop-off points (4%), while 3% will return to physical locations like Happy Returns.
Online shoppers embrace free return shipping
Is your brand and margin structure such that you can extend this coveted convenience to your customers? Online shoppers are first and foremost concerned about costs associated with returns.
When asked what they factor into their purchasing decisions, 54% of shoppers consider free return shipping, though they also consider cost and convenience when placing online orders. From a dollars-and-cents perspective, 39% thought about the cost of the return. Meanwhile, 15% were concerned about the time to process that return.
Online shoppers want to be confident in their return options, and their thoughts regarding online returns may be more psychological than rational. This year, we dug deeper to explore why online shoppers find return shipping appealing. 47% of respondents indicated they cared about making worry-free returns. For 14%, it was psychologically appealing, while 13% didn’t have easy access to stores or shipping locations.
Money-wise, online shoppers don’t accept or want surprises regarding return fees. They find comfort, and 47% like risk-free purchases. 37% are emphatic that they don’t think it should cost them anything if they don’t want to keep the items. And 26% prefer not to be in the dark and don’t like wondering what return fees might be.
Making it convenient for shoppers to handle returns will resonate
Convenience always weighs on the minds of the online shopper, and that starts with the convenience of shipping back orders to retailers for 31% of survey respondents. Of those who opt to make a store-based return, 26% also reflected on that convenience. Time is always a consideration and was for 25% of participants relative to returns. Lastly, convenience often revolves around choice, where 22% noted in-store return options and just 8% of their curbside counterparts.
Return policies, including any restrictions, were also on the minds of 26% of these shoppers. Interestingly, Amazon’s “this item isn’t eligible for return” was cited by 22% as a consideration. If you are like me, you may not have noticed until returning was no longer an option.
Perhaps retailers have heeded the call as online shoppers appear to be less focused on the return aspect of their online orders. This signals that retailers’ efforts in executing returns appear to have paid off.
The most significant difference appears around money. Free return shipping (54% vs. 74%) and the cost of returns (39% vs. 46%) loom the largest. From a policy perspective, return policy, including restrictions, saw a substantial decline (26% vs. 43%). The convenience of shipping back orders to retailers (31% vs. 49%), and completing store-based returns (26% vs. 36%) along with the in-store option (22% vs. 32%) were all in decline year-over-year.
Frustrations revolve around high return fees and restocking charges
Shoppers find fees most frustrating in the return process. That includes the 41% who noted having to pay for return shipping, paying restocking fees (36%) and the high fees associated with return shipping (31%). Timely processing of credits is expected by online shoppers as 23% included taking more than a week to get credits.
I advise a review of policies and on-site execution, as return policies were seen as too restrictive (19%) or hard to understand (16%). Additionally, 14% couldn’t find the return policy quickly, which frustrated them.
Service becomes even more critical as online shoppers can already be frustrated when returning products. They found difficulty in reaching customer service reps (18%), and for 17%, there was a lack of return status communication.
Convenience can’t be stressed enough and manifests itself in the following ways:
- Printing a return label inconvenient: 17%
- Inability to return online purchases in-store: 16%
- Store return inconvenient: 15%
- Inconvenient to use retailer’s designated shipping company: 12%
- Can’t use shipping carrier of my choice: 11%
- No curbside option: 7%
Evaluate offering a curbside return
Curbside return awareness and usage is relatively low, suggesting retailer and consumer interest is not forthcoming. Almost six in 10 online shoppers have not made a curbside return, which looms large for this research.
The awareness/interest among survey respondents was as follows:
- Aware but haven’t used: 19%
- Unaware of curbside options: 16%
- Not interested in making: 15%
- Worry I won’t receive a proper and timely credit: 8%
For those who had made curbside returns, 15% had made one, while just 11% had made multiple. There doesn’t appear to be much passion for these return transactions (mostly positive/9% vs. mostly negative/6%). This may be why retailers have not invested in such capabilities.
Return advice for retailers
Leveraging these research findings suggests five pieces of advice.
- Make it convenient for shoppers to make choices in their returns
- Put in place both fair and accessible policies to keep return rates low
- Embrace free return shipping
- Ensure supporting customer service is in place to deliver exemplary experiences
- Evaluate offering a curbside return
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