Why Retailers Need to Develop a Strong Returns Strategy for 2022

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Returns are always going to be a part of the retail customer experience. It’s only fair, really. Retailers can’t expect customers to be 100% satisfied with everything they buy — and that doesn’t just go for online shopping, by the way. People change their minds. They receive unwanted gifts. They misjudge sizes. There are many reasons why returns happen, regardless of whether they were purchased online or in-store.

However, that being said, eCommerce returns are a rapidly-growing problem, not just in terms of the operational and financial strain that they cause retailers and brands, but in what they are doing to the environment. Every year, an estimated 5 billion pounds of returned goods end up in landfills, and UK returns alone are predicted to grow by over 27% by 2023. As more and more merchants are taking actionable steps to become more sustainable, it’s clear to see that developing a strong returns strategy is going to have to be a high priority for retailers as we face into 2022.

Same, same, but different

What motivates shoppers to return products? If there was a one-size-fits-all answer to this question, we probably wouldn’t be in this predicament. There are wide industry stats on the reasons behind returns, such as damaged items (80.2%), products don’t match descriptions (64.2%), customers don’t like the item received (37.2%), late delivery (7%), and poor value (7.5%). However, these figures don’t tell merchants why their own customers return products. If they want to discover this, they need to dig deep into their returns data and look to their customer base for true insight. Product returns forms can identify any gaps that could be filled around various reasons for returns, for example. But tackling returns is not a one-and-done job – switching carriers, or updating product descriptions isn’t enough to call it a day and wait patiently for return rates to drop. In order to really move the dial, combined efforts need to be made throughout an online store, then consistently monitored and iterated over time.  This brings us to another tough question that retailers need to ask themselves…

Is it possible that you’re motivating customers to make returns? In recent years, December 3rd has become known as ‘Returns Thursday’ – a day that sees more returns than any other in the calendar year. The culprit? You’ve guessed it – Black Friday. While it’s normal to see raised returns following the surge of Black Friday and Cyber Monday, retailers should ideally be aiming to keep their sales/returns ratio intact over the promotional period. If it’s heavily skewed in the direction of returns, they may be unconsciously contributing to overconsumption and serial returning.

Brands need to take a close look at the language used across their online stores. Running upselling and cross-selling promotions can be highly effective for increasing average order value and creating revenue at a low incremental cost. However, that profit could easily be swallowed up because retailers are simultaneously offering customers free returns for an extended time period. A customer’s motivation to return shouldn’t be stronger than their motivation to buy, so brands need to carefully consider how returns are framed on their sites.

Where do returned items end up?

In order for the returns beast to be tamed, brands need to convince their customers to change their behaviour – but that is much easier said than done. It’s a recurring theme when it comes to sustainability, whereby customers can’t be part of the solution if they don’t understand the gravity of the situation. Therefore, retailers need to become educators. 88% of consumers think that returns go back on the shelves and are sold to the next customer. That might be the case for some products that are refurbished and resold by the retailer, or on marketplaces, or end up in discount warehouses. Unfortunately for a huge percentage though, products end up being destroyed – that means recycled, in landfill, or burned. We say landfill – but what does that actually mean? Do consumers picture landfill as being the desert in Chile or Ghana? Probably not. It might not be a pretty reality, but it’s up to retailers to paint this picture for them. Literally. Something like an easily digestible infographic on the returns page of a website, that details the steps that a returned item goes through could really resonate with customers and help brands in boosting their sustainability pledges. 

Innovation will be key for reducing returns

Prevention is always going to be better than cure. While retailers have a battle ahead of them in driving the average return rate down, they also have an arsenal of technology and tools to help them do their part. We’ve seen such innovation in the past couple of years with AR and AI playing the role of the knowledgeable store assistant, answering product questions and helping shoppers make smart purchasing decisions. Review software helps brands gather customer reviews as well as information on specific attributes like sizing, comfort, and quality, which, in turn, can help guide shoppers to the right products. User-generated content such as customer videos and photos help browsers to see items in real life, complementing professional product images, and providing the type of context that consumers crave.

As 2021 draws to a close, and sales momentum is high in the lead up to Christmas, retailers and brands should be seriously thinking about their returns strategy for 2022 – identifying their quick wins and long-term goals, and mapping out an actionable plan to tackle returns. Returns might be a necessary evil, but if more retailers fight the good fight, the returns tide might finally start to turn.

 Talk to us today to find out how we can help you stay one step ahead in 2022 and beyond. 

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AUTHOR

Michelle McSweeney Content Marketer

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