Why Your Retail Returns Data Is An Untapped Goldmine
We’re in the middle of an ecommerce boom right now. And while the reasons behind it might not be positive (thanks, Covid!), plenty of retailers are seeing positive results with a huge, sustained spike in online sales. But it’s not just the sales that are on the rise: We’re in the middle of a returns boom right now, too.
Returns in 2021 were 44% higher than they were in 2020 – and this massive leap presents a huge challenge (and a huge cost) for retailers everywhere.
So, what are retailers doing about it?
Some of them are blaming the pandemic. Some of them are blaming the shoppers themselves.
But the smartest retailers are jumping on the opportunity – diving into the data behind their returns to understand what’s driving this new behaviour.
Why should retailers care about returns data?
The short answer?
With the right data, you can make the right decisions for your business.
Most businesses are on the ball when they’re looking at sales data. They know what’s working and what’s not – which promotions are driving more revenue, and which products are getting the most attention.
But the customer journey doesn’t stop at the sale. And if you’re not looking at both sides of the coin, you’ll never have the complete picture.
So what exactly can retailers learn from their returns data?
1. You’ll know the rates – and the reasons
The first step in understanding your returns is getting accurate numbers. But it’s not just about the ratio of returns to sales – you need data that’s segmented down to a fine grain.
With the right returns data (powered by the right platform), you’ll be able to see exactly which products are being returned the most. You’ll know how long they’re taking, where they’re coming from, and even which demographics are returning more than others.
That’s a great start. But behind the pure numbers, you’ll also get more accuracy when it comes to the reasons why people are returning each product.
Old-fashioned methods like in-parcel forms can work – but they’re not fool proof. It’s easy for your shoppers to give incomplete reasons or vague complaints (is it ‘too big’ or ‘too long’?), and it’s even easier for your customers to simply skip the part where they give you a reason.
(One of our own clients here at ReBound told us that a whopping 55% of their returns come back without any reason filled in at all. That’s a giant gaping hole in understanding your customers!)
Without this returns data – segmented by product and with accurate reasons – you won’t be able to address the potential manufacturing faults and sizing issues with your products. And if you can’t address the issues that are causing your returns head on, you’ll be stuck with those returns happening over and over again.
2. You’ll spot the savvy shoppers
It’s tempting for retailers to lay the blame on their customers. Especially when they’re placing orders with the intention of returning things.
But in lots of cases, it’s the retailers who are shooting themselves in the foot.
When shoppers see an offer to ‘spend £10 more for free delivery’, they’ll take it. According to UPS, a significant 36% of shoppers are adding unwanted products to their basket – knowing that they can return the extra items that they don’t need.
When shoppers get an email containing a discount – just moments after placing an order – they’ll use it. They know they can return the first order and get their money back, and keep the second order that’s discounted.
We can’t really blame the marketers. It’s their job to maximise revenue and fill up those baskets. But when you have the deep data that shows patterns in your shoppers’ behaviour, you’ll know when they’re being savvy – and you’ll know how to change your own practices to avoid it.
3. You’ll know the value of each customer
We’ve all heard of the ‘serial returner’ – the type of customer who seemingly returns a large proportion of items.
Some retailers have even gone as far as identifying them and banning them. But when you look at the full picture – with complete data that brings sales and returns together – you might be surprised to see that your biggest returners are also your biggest earners.
It’s not enough to label all returners as ‘problematic’. You need to weigh up the profitability and the lifetime value of each customer (with both their spending and their return rates).
That might sound simple enough. But when we look at the figures, we know that 44% of UK retailers don’t currently have the technology that can help them spot a serial returner – let alone decide if they’re valuable!
So how can retailers get access to this kind of tech?
Powerful data needs a powerful platform
If you want the kind of accurate returns data that can help you make informed decisions, we’ve got some bad news for you:
Those paper return slips just aren’t going to cut it.
With a dedicated online returns platform (like our own here at ReBound), you’ll get the comprehensive returns data you need to find the patterns, the faults, and the behaviours that are driving your returns higher.
By taking your returns online, you’ll be able to:
- See accurate returns data – segmented by product, demographic, location, and timeframe
- Get a complete picture of the reasons behind returns – with no skipped steps or vague complaints
- Get the information earlier – to help streamline your returns warehousing and logistics
- Spot customer patterns and behaviours – to identify problematic promotions, and understand your serial returners
- And build a reliable database to predict future patterns – with complex data that’s captured consistently.
Ready to start crunching the numbers?
Returns are a problem for almost every retailer. But with the data on your side – and a deeper understanding of what makes your returns tick – you can make the right choices from a place of knowledge and hard evidence.
So if you’d like to understand more about your returns data, we’d love to talk to you – send us a message to find out more.