Tis the season of gift-giving – and returning. January sees retailers flooded by returns as consumers send back unwanted gifts and regret those sales bargains. The cost to shops of this activity is huge. But there are some simple things retailers can do to support customers and reduce returns.
In a “normal” year, up to 10% of in-store purchases and 40% of online retail sales are returned.1 And this year has been anything but normal, with many shoppers staying at home and buying online. The purchase decision is now being made once the items have already been bought and delivered. So, we can expect returns to be higher than normal this January.
“The next test will be the returns in January,” a spokesperson from Metapack told the FT2. “Couriers have coped well with the peak, but volumes will rocket again with the sales.”
In the UK, many retailers have extended their returns period to help shoppers during COVID-19 restrictions. So, the impact of returns on retailers could drag on for weeks in 2021.
Retailers lose a third of revenue to returns
Returning items is an expensive business for retailers, who lose a third of their revenue to returns.3 Customers want free returns and are encouraged to buy because of them. But retailers then lose out twice, by refunding the purchase and paying out for postage.
Once items are returned, they must be processed, stored and then repaired, incinerated or restocked. Clothing has to be hand-sorted to look for damage or signs of wear. Then it’s dry-cleaned or steamed before being restocked. Other items can sit on a warehouse shelf for up to two years before a decision is made about their destiny, so retailers are paying for storage, too.
Returns are expensive and hard work for retailers. But they’re largely free, quick and convenient for consumers. Why would anyone think twice about buying more than they need, making a final decision at home and then returning the stuff they don’t want?
Support consumers to buy better and return less
There are many ways to help your customers make better, more confident buying decisions. You might sell less, but you will save money by reducing the volume of items that are returned. And your customer experience (CX) will improve along the way.
A much-loved high-street retailer we work with sells food, clothing and homeware. They are using digital tools to make the buying experience better for the business and its customers.
The retailer is looking at how customers can use a live chatbot on the website to ask questions about specific products. If they want to know more, the contact centre arranges a video call between the customer and an in-store agent.
The in-store agent can talk directly to the customer from the store, using a hand-held camera to walk the shopper round the product, show off the features and answer questions. This enables the shopper to get a much more accurate sense of the size, look and feel of the item.
This is the closest to an in-store visit you can get from home. Need a hardwearing settee you can share with an energetic puppy? Ask which material would best withstand attacks from claws and teeth. Prefer a bouncy sofa to a firm one? Ask the agent to sit down and have a bounce!
While the in-store agent has your customer’s attention, they can increase the value of the sale. In the example of our sofa demo, they can upsell fabric protection spray, matching cushions and a footstool or more expensive fabrics and wooden legs.
Virtual assistants and make-up selfies
No matter what you sell, there are so many ways that digital can support the buying journey. Make-up brands are using video consultations and other digital tools to help customers choose products they could normally sample in-store. Shoppers can simply upload a selfie and the brand applies make-up such as lipstick of various shades to the image.
When it comes to items such as clothes, a Virtual Assistant (VA) can stop people over-ordering. We can programme your VA with information to answer customer queries before they buy. This might include sizing information, country of origin, washing and care details, and recommended accessories.
If you give customers everything they need to make an informed decision, you can reduce the likelihood that they’ll buy a range of sizes and colours to try at home. This then reduces the likelihood of returns.
Research conducted by Signavio in December4 predicted that UK brands could receive 189 million phone calls, 193 million emails and 160 million letters over the Christmas period as customers ask for help with their purchases. By adopting digital tools, your contact centre can respond efficiently to higher volumes of customer queries and provide a good CX, while helping to reduce the number of returns in January.
Reduce returns and improve your CX with Superchannel
While you can reduce the volume of returns, some are inevitable. Our Superchannel platform can cut the costs of these returns by simplifying the process for both contact centres and customers. One of our major retail customers has achieved savings of more than £450,000 per annum on their returns process with Superchannel.
Through the Superchannel platform, customers and agents can share information with each other while on a call. This includes images, documents and videos. Issues can be resolved there and then, in a single phone call. This cuts down the number of calls and emails that a typical customer query involves.
Not only does this have a huge impact on your bottom line – it also leaves your customers feeling satisfied with your levels of service.
Here’s an example of a returns process using Superchannel:
- Your customer receives a damaged item
- They call the contact centre and, while on their smartphone, they send your agent a photo of the damaged item
- The agent assesses the image to understand if the return is appropriate or not
- The agent can then offer compensation for the damage instead of arranging a return. As we’ve seen, the returns process is generally lengthy and complex, so the average cost of compensation is lower than the average cost of return
The benefits of this slick process are:
- Reduced average handle-time
- Reduced e-mail traffic
- Increased efficiency and quicker resolution for the customer
- The business saves around £10 per return by offering compensation
Make your returns policy and process clear
Finally, there is a simple thing all retailers can do to save costs by cutting the number of enquiries about returns. And you don’t even need any digital wizardry to do it.
The answer, simply, is to make your returns policy and process clear. Make it as straightforward as possible. Tell people what to do and then let them know when they can expect a refund or follow-up call.
Spell it out, in Plain English. Plaster it everywhere – on the item packaging, in your emails, on your website. If customers can find and understand your terms and know what steps to take, they will be more likely to self-serve, and less likely to contact your customer services.
- https://www.ft.com/content/0e2b0c71-f4c3-477c-aa45-26de381aaf2e (Paywall)