The future of retail returns

7 ways to avoid returns

By | 4 minute read | June 30, 2020

Future of retail returns

Evolving customer expectations have forced retailers to figure out how to better manage the ripple effects that the current global crisis has created. This includes the realm of returns. Let’s look at some of the trends that 2020 has seen so far:

  • Extended return windows: Many retailers have instituted extended return periods that go beyond the average 30-day window for customers.
  • Increased returns: With physical stores closed, ecommerce is on the rise. But with this shift comes increased returns, as customers can’t be certain what they’re buying online will be what the right size and fit.
  • Not accepting returns: In the face of health concerns around coronavirus lingering on surfaces for extended periods of time, some retailers have stopped accepting product returns at all.

But these trends aren’t the only thing on brands’ minds when it comes to return management. There’s also the issue of dealing with returned items post-pandemic: Can they be resold? If nothing else, handling returned items will come with extra precautions and consumer concerns with worries surrounding the virus’s staying power.

Retailers need to get strategic about how they handle returns moving forward so it doesn’t eat away at their margins, customer experience, and sustainability for the long-term.

7 ways to avoid returns

Sell the right item. One major step that eliminates a possible return is to make sure you sell the right item to the right customer. Tactics for successfully accomplishing this include implementing sizing charts that provide the customer’s “optimal size” based on fit from known companies/designers, past purchasing history, plus data-driven technology that decodes individual style, fit, and size. Nordstrom does this well: they allow shoppers to compare sizing on similar items from popular brands side by side.

Future of returns

Save the sale. The ‘save the sale’ method is key for businesses who are looking to compensate for returns through a loyalty incentive. One example would be to offer customers to keep the item and provide them with a coupon towards their next purchase.

To avoid this long and complex process (especially if the value of the item is less than the cost of the return), there’s more to gain by focusing on the customer satisfaction angle. Instead of a return, fuel additional shopping by offering store credit.

Smart returns. Think of this tactic as the ease of “click and collect”, but extended to “click and return.” Smart returns will require a connected network of inventory visibility, as well as predicted demand. The idea is that a shipping label could be printed and/or a customer instructed on where to go in real-time as a return is being processed. One such scenario might be a shopper in New York who purchased a bathing suit in December for a trip. Instead of returning to a local store, a brand would provide a shipping label to mail the bathing suit to Florida since there is an increased likelihood that the item would sell there.

Predict returns. Data plays a vital role when it comes to predicting returns. Specifically, data that tracks the reason for a return: whether it’s done directly (item was damaged, didn’t fit, wasn’t as pictured, etc.) or learned through predictive analytics.

Empower your brand to analyze purchasing and returns data to accurately predict likelihood of a return based on factors such as:

  • Duplication: Two of the same items, but two different sizes included in a single order. The downstream effect of this is to more accurately disclose whether a product runs big/small to further enable customer satisfaction.
  • Cart size: Average number of items in order—especially if they belong to the same category.
  • Timing: For example, if the shipment was delayed and the Halloween costume was no longer needed.

Buy online, pick up (or return) in-store. Retailers can give shoppers greater flexibility by allowing them to purchase online and then pick up in-store. While they’re there to pick up, they can test or try products they’ve ordered and make an exchange via curbside processing if needed. This also provides an opportunity for sales associates to cross-sell or up-sell other products during the visit.

Virtual or personal shopping. Whether it’s a virtual showcase of new items for your most loyal customers, or enabling sales associates to set aside items for shoppers based on their past purchase history, these tech-enabled shopping solutions should help lower the risk of returns (since the associate knows what the shopper typically likes, sizes needed, etc.)

Virtual shopping can also be a context-rich form of customer engagement where shoppers see products on an actual person in real time. Direct-to-consumer shapewear company, Shapermint, for example, has been using Instagram Live to spotlight try-on sessions with influencers. During the live session, they answer product questions from viewers to help guide shoppers towards making a purchase that best fits them.

Augmented Reality (AR) tools. Help shoppers visualize what the product will actually look like with contexual images using AR. For a furniture retailer, this might mean building 3D models of products so shoppers can upload a picture and see what a product will look like in their space. This helps cut down on returns related to product sizing, color combinations, and a variety of other variables that can only come from seeing the product in its intended, personalized context.

From predicting returns, to saving the sale and beyond, the strategies covered above can help brands cut down on returned items and protect their bottom lines. No matter what route you decide to go, remember: the customer experience should always remain a top priority.