How to Reduce Retail Returns to Fight Back Against the Perfect Storm
by Laura Gee
54 retailers went bust in 2020 according to the Centre for Retail Research and already 4 more companies have gone into administration in 2021, so retailers will be doing everything they can to stay afloat.
The first quarter can be especially challenging as retailers have to contend with the effects of ‘Crimbo Limbo’ and the hangover from the Black Friday sales generating 85% more returns in January than any other month of the year.
But this year, things are looking even more extreme for returns. In December 2020 ReBOUND saw a 37% increase in returns registered online compared to the same period in 2019. And you’ve probably already guessed why:
The Covid effect
After almost a year of lockdowns and restrictions – with people working from home and avoiding interaction – the landscape of shopping and returns has changed dramatically.
Our new daily lifestyles have turned us all into either fitness fanatics, joining in with our kids PE class with Joe Wicks, or couch potatoes - scoffing McDonalds from Uber Eats while binge watching Bridgerton (I’m right there with you!). So no one really knows what size they wear any more.
With the high street closed, it’s no surprise that we’re buying more online than ever before, with online retail increasing by 52.2% in December (BarclayCard). But you might be surprised to hear that 60% of shoppers say they’ll be keeping up their new digital habits after the pandemic (Forrester).
So what does all that have to do with the perfect storm of returns?
ReBOUND’s return data shows that a whopping 70% of returns are size and fit related (an increase of 9% since 2017). Unless you’re only selling Oodies (not familiar? Look it up. You’ll thank us later.) this increase in size and fit related returns is to be expected. As the high street closed, so did the fitting rooms and the luxury of trying clothes on went out the window - slightly problematic when nobody knows their own sizing anymore. This is why almost two thirds (60%) of shoppers are buying extra sizes of the same clothing with the intention of returning the ones that don’t fit (an increase of 29% when compared to 2019 - Narvar).
And that means that this year’s returns are set to be more overwhelming than any year so far.
But don’t worry: there are plenty of opportunities for retailers to reduce the huge influx of returns they’re facing.
Here are five of the biggest ways to get a grip on your returns:
1. Reduce your returns by going online
If you’re a retailer that’s still using pre-printed returns forms, you’re missing out.
You’re missing out on consistent returns data – and you’re missing out on the chance to reduce your environmental impact.
But there’s one other big area where you’re missing out: and that’s a straight reduction to the number of returns you receive.
A recent ReBOUND survey conducted in November 2020 revealed that 21% of shoppers admit to returning items to claim a refund despite knowing that the return window has expired.
By using ReBOUND’s pre-programmed returns rules and RMA codes, you’ll be able to stop out-of-policy returns automatically – giving you more control over which returns your business accepts (and which ones get rejected).
From an analysis of our retail clients, we’ve found that our retailers typically see a reduction in online returns of 5%, just by taking returns online and implementing that level of control.
2. Get the right data to make the right decisions
Before you can even begin to think about launching a returns reduction initiative, you need to understand why your customers are returning your products in the first place.
Traditionally, this was the job of the pre-printed returns form. But with so many customers hastily scribbling down reasons and codes (or simply not filling them out at all, which tends to be the case for 70% of shoppers!), you’re often left with huge gaps in your returns data.
With an online service like the ReBOUND returns portal, you can collect consistent and accurate returns data you need to make the right decisions to reduce your returns in the future.
Are some of your products regularly coming back as faulty? That’s crucial information that you can pass on to your suppliers and manufacturers.
Are your products arriving to your customers in a damaged state? Then you know you need to talk to your logistics carriers.
Are your customers not getting what they expected? It’s time to take a second look at your product photos and descriptions.
With the right returns data on your side, you’ll be able to stop those returns at the source – before they happen.
3. Keep your marketing teams on the same page
When it comes to returns, marketers can be their own worst enemy. This isn’t a dig at marketers (who do you think writes these blogs?) but the fixation on pushing last-minute basket fillers to boost sales can have unwelcome consequences.
An eCommerce fashion study by ParcelLab revealed that 27% of retailers offered shoppers a discount code after they’d completed checkout. It might seem like good customer experience, but in actuality it’s just frustrating.
What happens when your customers finish their shopping at full price, only to find a new discount code waiting in their inbox?
And what happens when people realise they filled their basket on an impulse? Or when they only added items to qualify for free delivery – knowing full well that they can just return those extra basket fillers for free?
They’ll return their full-priced items, and buy it all again at a discount. This rings especially true for retailers like Next who even throw in free delivery if you place another order within half an hour of your original one. That means time and money wasted for your business – and one seriously annoyed customer!
Whilst these tactics might all encourage recommerce, the returns data might reveal something else. So if you’ve got a trigger-happy marketing team that’s incentivised by sales and sales alone, it might be time to start bringing them on board with your returns reduction initiative.
4. Give your returns journey a thorough audit
If you’re just starting to think about returns, you might think they can only be fixed at the source: with the quality and fit of the product itself.
But when you take a closer look at the entire shopping journey, you’ll see a huge range of places where you can influence your customers (and influence their chance of making a return!).
So put yourself in your shoppers shoes and assume the identity of a mystery shopper. Take a deep dive into the different stages your customers go through, from browsing your homepage and your product pages to their shopping baskets and checkouts – and even to your customers’ inboxes.
With a thorough audit of your returns journey, you’ll be able to see where you can:
- Add clear and visible returns policies – especially to your shopping baskets and checkout pages
- Create easy-to-use sizing charts and fitting tools for your product pages – so your customers end up with the items that are right for them
- And take control of your promotional emails – especially the ones that annoy your shoppers with poorly timed discounts!
You’ll also be able to spot inconsistencies in the return journey. Time and time again we see retailers with inconsistent information in their returns policy and on their returns paperwork - why? Because they’re the responsibility of different teams. By auditing your returns, you’ll be able to see all the areas that you wouldn’t normally look at, and identify where there has been clear communication gaps between teams. Not sure where to get started with a returns audit?
This interactive worksheet will help.
That brings us on nicely to our final point...
5. Make reducing your returns a company effort
We’ve already talked about trigger-happy marketers and the unintentional impact they can have on your return rates. But it’s not just your marketing teams that have a part to play.
Reducing returns isn’t about making changes to one department. It’s about coming together as a company to make the changes your business needs to become more lean and less wasteful.
Reducing returns is everyone’s responsibility. And that’s an attitude that’s already seeing proven success with some of our own clients here at ReBOUND:
When fashion retailer Bestseller were facing challenges with their return rates, they didn’t leave the solution to just one department or just one initiative.
They brought together a taskforce of 10 colleagues from different areas of their company to complete 100 initiatives over the course of the year to take control of their returns – from extending their returns windows to bringing eco-friendly product cleaning equipment in-house.
(And of course, a huge part of their initiative was rolling out a ReBOUND online returns portal!)
And the results?
Their customers are keeping more items, their returned products are getting resold faster, and their returns are making a smaller impact on the environment than ever before.
With their new online portal, they now have the reports and data they need to understand their returns and take decisive action – setting themselves up for better control over their returns in the future.
So if your company’s looking to get the best results out of reducing returns, don’t limit your initiatives – bring everyone on board to make reducing returns a company-wide effort.
Ready to learn more about reducing returns?
We recently teamed up with fashion fit developers MySize to create the hour-long webinar, ‘Sizing Up The Returns Problem’.
It’s packed full of useful guidance and ideas to help retailers navigate the pitfalls and quick wins of reducing returns – from understanding your shoppers’ journey, to the crucial data and actionable decisions you can take to improve your returns.
So if you’re looking to reduce your returns and get the insights you need to improve your operations, click the link below to watch the full webinar for free.