- Holiday returns will approach $100 billion this year. It’s a number that has been growing annually as ecommerce continues its rapid growth.
- Your customers consider the return process part of the buying experience and you should, too.
- You may need to change the way you handle returns, but you can’t afford to ignore their cost.
Eric Feinberg has thought a lot about customer experience in online retail — and not just the experience that brings shoppers to a site or compels them to click the buy button.
He says retailers that are the best at customer experience think about all those times when they are not directly a part of the experience — like when a customer gets her or his package into a home and feels the anticipation of unveiling what’s inside.
Let’s just say, it’s not always a happy ending. Feinberg, chief marketing officer at eSSENTIAL Accessibility, talks about what retailers need to be prepared to do in the video interview below, which was recorded when Feinberg was marketing vice president at Foresee, a customer-experience research firm.
This might not be the time of year that retailers want to hear that they need to make returns easier. The first quarter marks return season, a time when billions in sales disappear as consumers return holiday gifts that were not quite right for them.
B-Stock Solutions, which helps online retailers liquidate returned stock, told the Wall Street Journal that 2019 holiday season returns would approach $100 billion, coming in at $90 billion to $95 billion. Half those returned orders will be from ecommerce, the firm said. UPS told the outlet that it would move 1.9 million returned packages on its busiest returns day.
Apparel return rates can be a margin crusher
Yes, the number is growing every year, which makes sense. Online orders, especially apparel, are extremely vulnerable to returns. Customers can’t see, feel or try on what they’re buying. Sometimes they will buy several versions of the same item to ensure that one of them is the right fit. The rest? Back they go.
Half of all retail returns this holiday season will come from ecommerce orders. Put another way, 50% of the returns will come from 14.6% of overall holiday sales.
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Even so, Feinberg argues, some online retailers are not doing enough to make the return process easy for customers. It’s one reason consumers chose to return online orders in-store when they have the opportunity.
That doesn’t mean customers don’t expect to be offered a frictionless online return process. They’ve been conditioned to expect it, Feinberg told me in our extended interview. And you know who provided the conditioning?
They don’t have a fleet of stores, Feinberg noted, and so they need to make sure their online return process isn’t a hassle. “That, based on the essentials of their business, has raised the bar for everyone else,” he said.
Despite the competitive pressure from Amazon, retailers with both physical and online stores have a disincentive to make online returns easy. Encouraging customers to return in-store, even if it’s just to avoid pain, increases the likelihood that they will pick up something they hadn’t initially intended to buy while they’re there.
That could be a losing strategy in the long-run, as retailers who adopt it are trading a quick sale for long-term customer lifetime value.
As painful as it might be, retailers need to find ways to make the online-return process as seamless as every other part of the journey they build for buyers.
“Retailers have to stay true to what the customers want and think about the total journey — before, during and after purchase,” Feinberg said.
Best practices for ecommerce returns experience
No doubt returns are painful for customers and retailers alike — and are brutally expensive for merchants. But rather than making returns difficult — and thereby more painful for customers — retailers need to find other ways to diminish the damage.
Focusing on ways to avoid scenarios that lead to returns is one logical step. High-quality website photos and descriptions can go a long way toward avoiding misunderstanding and confusion.
Clear sizing charts, advice and even tech solutions can help consumers get the right fit.
Retailers might even want to restrict returns in certain cases — serial returners, certain products, etc. — and be clear about those policies on their sites and elsewhere. Or they might want to more aggressively build returns into their pricing structure as another cost of doing business.
What a retailer can’t afford to do is downplay or ignore returns in the hopes that they will go away. In fact, they will only become a bigger cost center as the percentage of commerce happening online grows.
All of which makes returns and the best way to manage them worth dedicating a lot of thought to.
Learn more about how you can transform returns into an advantage by reading our blog post about turning returns from pain point to profit center. In the post, Return Magic’s Guillaume Racine dives in to how returns can be used as a marketing tool and a way to enhance customer experience.
Photo by Mike Cassidy