Building Brand Lessons: The Returns Cycle

To improve your brand, review how to make the returns experience better

Published: Wednesday, December 1, 2021 - 13:01

With the rise of online shopping continuing to increase, thanks to the convenience and comfort of shopping from home, it's important for e-commerce businesses to look to their returns policy to ensure they’re not only catering to the tech-savvy, modern consumer, but also the environmentally conscious.

And with research suggesting that 84 percent of consumers are likely to buy from, and 86 percent likely to return to, a brand with a free returns process, there’s a clear shift in demand from the modern consumer, whose patience for brands with poor returns processes is rapidly fading.

The struggles of returns for e-commerce businesses

Brands right now are doing everything they can to cater to the concerns of consumers in turbulent times, such as increasing their returns windows. However, this can create logistical and financial difficulties, particularly given ever-rising return rates. Some estimates place these at 20 percent for e-commerce businesses.

Brands are also having to cater to evolving shopper practices, particularly with clothing, where multiple “options” often are bought so that customers can pick what they like and return the rest.

For many products it’s a question of profitability. If return rates are too high, the product or company will not be viable. Customer satisfaction will improve that situation with better return rates, more reviews, higher morale for staff dealing with customers, increased sales, and reorders.

However, I find that many companies focus all their efforts on the sales side, but don’t spend the same energy reviewing all the returns and figuring out how to make the experience better. Doing so can result in an improved return on investment, beyond simply increasing sales and marketing.

It’s necessary to find a balance between nurturing consumer relationships with fast, simple, and reliable returns processes, while ensuring business operations don’t directly suffer as a result.

Introducing sustainability into returns processes

Of course, it’s also imperative for brands to seek more sustainable practices for managing online orders and returns. More online orders generate more returns, increasing carbon footprints as parcels are exchanged across the country.

To combat this, consumers should be offered sustainable returns processes, such as the option to combine multiple returns within one parcel, or be provided with returns packaging that is made from recyclable materials.

ASOS is a fine example of a brand that ditched traditional paper returns forms and instead dedicated an entire portal to returns on their app, allowing consumers to not only make returns quickly and easily for free, but also without using excess paper. This catered directly to the sustainability-focused consumer.

And you only need to look at the headlines surrounding the likes of Boohoo last year, and now with its boss having to respond to “throwaway fashion” claims, to see just how much emphasis is placed on sustainability today by customers and regulatory bodies.

Both sustainability and e-commerce go hand in hand. Businesses must monitor all reasons for returns and resolve core issues, such as quality, product descriptions on the website, packaging problems, photography, better fitting guides, consistent measurements, and phone support.

Although customers always want free returns, sometimes adding a charge for returns can help optimize return rates, although there’s still a need to monitor the impact on sales.

With everyone working toward carbon-reduction goals, along with regulatory pressures and customers becoming more keenly aware, it’s imperative that brands ensure their returns are sustainable and ethical.

How can paid-for returns still be used?

For smaller, boutique businesses, it isn’t always feasible to offer free returns, which can pose a serious drain on business resources. However, there are ways that smaller retailers can provide paid-for returns without losing customers.

Customization in the online experience is crucial, and smaller brands can utilize this to provide some form of incentive for those customers who have to pay for their returns.

For example, brands could offer a realistic discount on the consumer’s next shop, or even invite loyal customers to exclusive events to demonstrate their thanks and appreciation for their custom.

Luckily, with about 54 percent of Gen Z shoppers willing to pay more for sustainable products over mass-produced items, stores that cater to these demands may be more likely to get away with a paid-for returns model than others.

For example, a consumer may be more willing to pay for returns for items purchased from a boutique apparel store that provides hand-crafted items, over a chain store that does not offer the same level of customization and personalization. Here the hands-on “human touch” is more transparent than a mass-market conglomerate, offering a way for owners to more easily connect with consumers.

No longer can returns simply be regarded to as an “extra.” Instead, they should be integrated into business practices from both a general and sustainability point of view to allow brands to stay relevant in an increasingly competitive digital landscape.

Although returns are often considered the most “unsexy” part of the business, they are also an area where you can learn the most in how to improve.

About The Author

Nate Burke

Nate Burke is CEO of Diginius, a software and solutions provider that empowers organizations to achieve the maximum impact from their online sales and marketing activities. Burke founded Diginius in 2011. He is known as an early e-commerce pioneer and entrepreneur. He launched his first internet business in 1997 and is a two-time nominee Ernst & Young Entrepreneur of the Year. He has a BA in Computer Science and an MBA from the University of Alabama.