Low Returns, More Sales
🚀 Stop those returns and grow those sales
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STRATEGIC RETURNS MANAGEMENT
🪄 Low Returns, More Sales!
With the surge in e-commerce and retail returns, reaching a staggering 16.5% of purchases in the last year, businesses face significant challenges to their bottom line. The $817 billion worth of returns, accounting for nearly a fifth of the $5 trillion expected spending in 2024, has doubled since 2019 and heavily impacts brands' profit margins. Adapting return policies and implementing proactive strategies are essential to counter this trend. Here’s a comprehensive guide to reducing returns and enhancing profitability.
1️⃣ Evolution of Return Policies
Faced with increasing returns, many brands are revising their return policies to be less lenient.
Charging for Returns: About 35% of retailers, like Anthropologie and H&M, now charge for returns (around $6), discouraging unnecessary returns.
Shortening Return Windows: Reducing the return period to a month, as done by 29% of retailers, encourages quicker decision-making by consumers.
Offering Store Credit: 17% of retailers now provide store credit instead of refunds, keeping the revenue within the business.
2️⃣ Proactive Measures in the Customer Journey
Retailers are taking steps to minimize returns even before purchase.
Amazon's Transparency: Amazon notifies customers if an item in their cart is frequently returned, promoting mindful purchasing.
Incentives for Non-Returns: E-commerce brands like Dress the Population offer discounts to customers who agree not to return items, incentivizing commitment.
3️⃣ Understanding Reasons for Returns
Tackling returns effectively requires understanding why customers return products, such as issues with sizing, quality, or unmet expectations.
Analyzing Data: Delve into your sales data to identify common reasons for returns specific to your products.
Customer Feedback: Use customer feedback to address common concerns, improving product quality and description accuracy.
4️⃣ Enhanced Virtual Shopping Experience
Utilizing technology like AR and VR can give customers a better sense of the product before purchase.
AR/VR Try-Ons: These tools, like those used by French beauty brand Violette, help customers visualize products realistically, reducing the likelihood of returns.
Fit and Shade Finder Tools: Implementing interactive quizzes and tools aids customers in finding the right product fit or shade, as demonstrated by Tower 28.
5️⃣ Leveraging Customer Reviews and UGC
User-generated content and reviews can provide prospective buyers with real-world insights into products.
Contextual Reviews: Brands like Anthropologie allow customers to provide detailed reviews, including biometric information, to aid others in making informed decisions.
UGC Showcasing: Displaying customer photos and stories can set realistic expectations and build trust.
6️⃣ Personalized SMS Interactions