How to Win New Business by Embracing Returns

September 16, 2019
 

Given the circuitous nature of the shopping journey, merchants no longer view online abandoned carts as a dead end, but rather a frequent waystation between research and purchase. As eCommerce grows, it’s time to consider returns the same way – as a normal part of the customer lifecycle – and to invest, plan, and message accordingly.

Traditionally, retailers have tried to avoid returns, for obvious reasons: not only do customers get their money back, but they require extra staff resources to process, and typically only half of returned merchandise can be resold, according to data from Optoro. 

Now, there’s ample evidence that the rise of online shopping has boosted the percentage of retail returns. To stem the rising tide, some retailers have tried to cap the number of orders customers can send back. After all, some 20% of online returns are due to shoppers having ordered multiple sizes of the same item to try on at home, UPS found, while the NRF estimates that 32% of all returns are related to “wardrobing” – the practice of wearing or using an item once, then returning it undamaged. 

But while it’s reasonable to target standout serial offenders, in most cases a better strategy is to embrace returns as an increasingly-common phase of the customer lifecycle, and to invest as much in reverse logistics as in acquisition tactics. 

That’s because a successful return is likely to win repeat business – not end the customer relationship. Some 73% of shoppers say the returns experience affects their likelihood to shop again with the seller, UPS found, while a study from Narvar found 95% of consumers are willing to buy again from a retailer offering a positive returns experience. 

Investment in an order management system with robust reverse logistics capabilities, personalization tools to boost relevance of returns messaging, and development of content surrounding the returns process can help retailers succeed at:

Winning new brand converts during the peak season.

The percentage of returns is higher than average following the holidays; in 2018, shoppers reported they planned to return some 34% of all gifts, a survey by Red Stag found. Delivering a superior returns experience amidst the holiday bustle is an opportunity for merchants to differentiate their brands and transform disappointed gift recipients into new customers. 

Optimizing inventory across stores.

Thoroughly-integrated returns processes can help merchants identify regional and seasonal demand for inventory and adjust accordingly. Store-to-store fulfillment capabilities can help make the most of saleable returned merchandise by enabling swift shipment to the outlet where it’s needed most.

Personalizing offers to customers. 

Returned items are valuable data points to feed personalized recommendations and messaging, starting with suggestions to replace the items with different styles or sizes. Merchants can also make use of data about online-to-offline returns to localize future in-store offers.

Experimentation with new models.

Perfecting reverse logistics enables brands to consider rental and “try before you buy” options. After all, viewed through another lens, services like StitchFix or Amazon Wardrobe simply assume the return, rather than assuming the sale. 

How are you optimizing omnichannel returns?