As you’re probably all too aware, e-commerce returns are a hot topic as we start the new year. Think of it as the final cap-off to the holidays, that extra item to complete before finally closing the books on the season. But, it doesn’t have to be seen as a negative. Returns can be an opportunity to up your game when it comes to customer service and lead to new opportunities. And with the right foundation in place, you can ensure they go smoothly.
Here you’ll find a few tips to help you do just that—and more. But first, a couple facts to consider…
E-commerce Returns Outweigh Brick and Mortar
Consider this: e-commerce return rates are 15–30 percent higher than brick-and-mortar returns. Estimates for the 2018 holiday season amounted to about $37 billion in returns. Plus, 89 percent of consumers have returned an online purchase in the previous three years.
CBRE reports: “Returns place enormous stress on and add significant costs to retailers and distribution networks that are not optimally equipped for the reverse flow of inventory. It is estimated that returns either sold at discount or discarded [will] cost retailers 4.4 percent of total revenue each year.”
Tips For Managing E-Commerce Returns & Promoting New Purchases
1. Improve Your Supply Chain
Your supply chain is a key component when it comes to e-commerce operations. According to CBRE’s estimates, a reverse logistics supply chain can require up to 20 percent more space than typical outbound supply chains.
CBRE also contends that a strong solution to operational challenges from e-commerce holiday returns is to improve and expand supply chain networks via outsourcing to third-party logistics (3PL) companies. This creates “tremendous industrial real estate opportunities as users add more warehouses and distribution centers to handle the reverse flow of inventory.”
Do you already outsource to a 3PL? You may consider adding more to your roster. More 3PLs means increased bandwidth and timelier returns processing.
Pro tip: Use shipping software that can scale with your 3PL needs.
Check out Shippo’s 3PL and fulfillment technology partners >
2. Promote Products Wisely
Promote merchandise you don’t plan to restock—and let customers know your plans. Those last-season items may be weighing down your business and preventing you from fully maximizing your inventory.
This is what Midori Bikinis did in 2018:
“Our biggest goal for Black Friday is to push out products that won’t be restocked. This is our last big push before we go into production mode for the next summer season. If we can push out more than 70% of old inventory, it has been a successful Black Friday.”
Conversely, if you’ve got some beloved, evergreen staples in your inventory, make sure to highlight the value of these pieces to further spread the word of their benefits—beyond your current customer base.
Taking stock of your total inventory and promoting accordingly will ultimately help you ensure you have the right mix for your customers, and help make sure their purchases are purposeful.
3. Improve Product Pages
You’ll also want to examine your product pages.
Product photos and accompanying descriptions are key selling tools—and it’s important that they’re accurate in representing your merchandise. 22 percent of online returns happen because the product looked different in real life than advertised on the website.
Product photos: Nearly three-quarters of consumers want to see at least three product photos, and the internet’s top fashion brands typically showcase eight product photos. Invest in or rent a high-quality camera to capture shots or, better yet, hire a qualified professional photographer to do it for you, if budgets permit.
Product descriptions: Focus on benefits. Ensure product descriptions are informative and focus on the benefit to the end user—instead of saying your headphones have “world-class noise cancellation,” tell shoppers that they’ll drown out the crying baby on the bus. Keeping in mind upcoming holidays or special occasions throughout the year, add extra information for gift-buyers: sizing information, details on who the product is a good fit for, and other relevant details.
4. Revisit Your Return Policy
E-tailers may sometimes adjust their return policy at various points during the year, based on seasonal events such as the holidays. For example, sale items might be exchangeable only for store credit or ineligible for returns altogether during some of these periods.
Whether you make a change or stick to your traditional return policy, you’ll want to make sure it’s prominently displayed on receipts, gift receipts, at the point of purchase, and on your website.
Remember: Free returns are not only appealing to consumers, but are an important factor in the overall purchase process. 66 percent of shoppers look at a retailer’s return policy before converting. 54 percent of shoppers say free returns is a large decision factor when comparing merchants, and 34 percent will only make a purchase if they know they can ship it back for free. Other research has found that 80 percent of shoppers expect free returns.
While you need to consider operations when devising your holiday return policy, the most successful brands put their customers first. 95 percent of online shoppers will make a future purchase after a positive return experience. Here are some key things consumers look for:
- Free returns shipping
- Hassle-free policy
- Easy-to-print return labels
- Timely refunds
- Scan-based label included in box (To allow seamless returns without the need to have your business create a new label manually—with Shippo, you’ll only be charged if the label gets used)
5. Evaluate Your Shipping Tools
Making the shipping process seamless for both your company and your customers is a key part of growing your business.
With Shippo, you can purchase return labels for packages where the outbound label is generated outside of Shippo. So even if you generate an outbound label using a different shipping account, you can still create a return label through Shippo.
This also allows you to use a different shipping service level, like USPS First Class Package Service, on the return trip. And you choose your shipping service, in case you want a different shipping service than the outbound delivery. This is a great option if you’re flexible on when you receive returns and want to cut shipping expenses.
As mentioned, Shippo return labels are scan-based, so you won’t pay anything until the package is scanned on the return trip.