With the holidays now behind us, 'tis the season for consumers to spend more time making returns than purchases. While returns may be a "necessary evil" in the world of gift giving, it's not all negative. In fact, part of the beauty of gifting season is that your current customers can introduce your brand to potential new customers! Regardless, there's no better time to think about how to turn this time of year into a positive and get 2021 started on the right foot. Ahead, here are 5 ways to help your brand get ahead of the inevitable return season.
Predict Your Return Rate
The first step to a successful January is setting expectations. With more consumers ordering online than ever before, you should prepare for return rates to reflect that same shift in behavior. Last holiday season, the return rate for items purchased online was about 30%. But according to Narvar, 15% more orders in 2020 incorporate some form of "bracketing" (deliberately purchasing multiple variations on the same item with the intent to return at least one), which will likely cause the average return rate to rise this year, especially in the apparel category. Keeping this in mind will help you better benchmark how your brand will compare to the rest of the industry and plan inventory accordingly.
Bracketing (verb): When a customer purchases a number of different sizes or colors of an item with the intention of only keeping one and returning the rest.
The best way to reduce the impact and potential cost of returns is to limit the number of returns you receive altogether. The simplest solution is to make exchanges as easy and attractive as possible for your consumer. While exchanges may require you to incur shipping costs, it's a small price to pay compared to losing the sale altogether.
5 ways to offer a positive exchange experience:
- Endless options. Don't require exchanges to be for the same product. Treat the exchange as credit toward any item on your site or at your store.
- Keep safety in mind. Enable customers to exchange by mail and offer pick-up services if possible.
- Don't make them wait. Even if you can't ship their new purchase until you receive the original, enable customers to select and hold the item they'd like to receive ahead of time to make sure it doesn't sell out.
- Lend a hand. If a customer reaches out about how to make a return, consider offering to help them find another product as a replacement. You can chat through options with customers through curated product recommendations sent by email, text, or over video chat.
- Incentivize. Hold onto the sale by adding an incentive for the customer to exchange the item rather than return it. These incentives can be things like covering return shipping cost or offering a discount on the replacement.
Use BORIS to Drive Sales
Most customers are buying online, especially during this holiday season. If a customer insists on returning an item, introduce them to the BORIS method, or buy online/return in-store, and encourage them to make the return in-store instead of shipping it back. This option is not only free for both of you, but it also encourages the customer to use their refund or store credit while there. In fact, 49% of customers visiting a store to pick up an item reported purchasing unplanned additional items. Now consider a customer returning an item someone else purchased for them, and they're very likely to convert rather than forfeit the gift entirely.
The beauty of in-store returns is not only the illusion of the customer being "richer" than when they first walked in, but they will also be purchasing through a channel with a much lower return rate: Only 5-10% of items purchased in store are returned, dramatically lower than the return rates online.
Saving on return shipping cost is not the only reason a customer may opt to return an item in-store. As consumers become more conscious of the environmental toll of shipping and packaging, many would prefer a more sustainable return option, not to mention the reassurance that the return was successful. Marketing these advantages as part of your BORIS strategy can help motivate customers to visit you in-person. To make the in-store returns experience even more enjoyable...
- Make it efficient. The sooner your customer is able to make their return, the sooner they can get to more enjoyable things on their to-do list (like shopping). If your check-out line gets long, consider designating a separate area for customers making returns.
- Make it fun. If you know your current POS system takes forever to process returns, don't make the customer wait while you process the return. Take the return and encourage them to shop around while it's processing through the system.
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Use Returns To Grow Your Online Audience
This year, COVID, the BLM movement, and the push to shop small has motivated consumers to branch out and expand the range of brands and retailers they shop from, which means you may have recently experienced new customers buying your products for the first time. While some new customer purchases may end up as returns, 76% of first-time customers who have an easy time returning their purchase are willing to shop with that retailer again. This openness signals that a return is by no means the end of the line, and that you can compensate for an unsuccessful first-time purchase by delivering a return experience that's both smooth and transparent.
What's more, providing a simple return process and enjoyable online experience can be a huge motivator for customers to visit your site again. Ask yourself how you can make it easier for visitors to quickly learn about your returns process, and what services you offer to facilitate.
Let's work through a typical holiday scenario, shall we? Your Aunt Vicky buys you a new throw blanket for your couch. She was savvy enough to include a gift receipt, but she bought the blanket in a color that doesn't match your room's decor (classic Aunt Vicky). Without a shipping confirmation email, you find yourself on an unfamiliar brand's website for the first time, and you have no idea how to start the return.
Adding something like a seasonal action button on your e-commerce site's homepage for easy returns might feel counterintuitive, but the path of least resistance in this scenario goes a long way. To help, we've rounded up some of the most popular apps giving customers the opportunity to seamlessly return and exchange their items while also providing their emails:
- Return Magic
- Happy Returns
- Return Logic
While these apps make for a transparent and efficient returns experience, nothing beats personal service. If you have the man-power, we recommend supplementing these apps with additional support in the form of one-to-one emails or texts to VIP customers.
Use Your Stores to Increase Loyalty
While growth is always important, don't forget acquiring a customer costs 7x more than retaining a customer. Repeat customers will bail on a brand that makes returns a challenge, so be sure to prioritize a smooth experience for your current audience in order to hold onto them and increase their loyalty in the long term.
On top of having a straightforward returns app for your customer to use, having a store means you have an additional resource in your arsenal: your sales staff. When you receive a notification that a customer has started a return (especially a large-ticket purchase), consider connecting that customer with a member of your store team who can walk them through the steps and be a lifeline for any questions that may arise. Not only will this bring the customer peace of mind (at a time of great uncertainty, no less), but it also sets the salesperson up to continue the conversation and direct the customer toward their next purchase. Especially if you notice a customer lives near one of your store locations, these conversations can create a seamless way to put your brick-and-mortar location on your new customers' radar.
As an omnichannel CRM, Endear can help you accomplish your goals for January and the rest of 2021 by giving you the tools you need to connect with customers both online and offline. Whether it's providing top service to a customer who is trying to make a return, or introducing someone new to your product assortment, let us help you make this year a success.