In a perfect world, businesses would sell products and customers would go home happy and satisfied each and every time. However, we all know that the reality of retail is quite different. There are dozens of reasons why customers either choose to, or are required to, return a product. Perhaps it’s a piece of apparel that’s the wrong size, or maybe their new TV was damaged in shipping, or they simply ordered the wrong product. Regardless of the reason for the return, they will happen, and the manner with which your company handles the returns experience, also known as reverse logistics, can have significant impact on many different parts of your business.
How Important Are Returns?
One important thing to note about returns is just how much they are underestimated in their impact on a business. Several reports have been produced that illustrate the true significance of returns. The Retail Council of Canada states that “online returns during the holiday gift giving season surge to 30%”, which is a staggering number on its own. Couple that with the fact that Business Insider reports that “about half of shoppers making an in-store return for an online order will make an additional purchase”, and you can quickly see just how critical returns are for retailers.
There are many contributing factors to this surge in returns during the holiday season. Many shoppers buying gifts for friends and family are more frequently shipping directly to the recipient, which can make it difficult to effectively judge the product since it’s not been seen physically by the sender or the recipient. Other reasons for returns include products not matching descriptions, products getting damaged in shipping, or an error in picking that sent the wrong product, among many others.
Since there are so many varying reasons on why the customer is returning their order, there are also many different levels of satisfaction that those customers are feeling about your business. For a minor issue such as an incorrect size or mistaken colour, their level of satisfaction will likely be much higher at this point than a customer who received a badly damaged or defective product. It’s critical to keep in mind what the customer experience has been like until the point where they need to return a product, and either maintain or improve their level of satisfaction throughout the returns process by making sure they receive great customer service, and managing expectations.
What Are Customer Expectations?
When it comes to returns, customers will have different expectations based on the nature of the product(s), and the circumstances for their return. For example, a customer returning a badly damaged TV to a retail store will have vastly different expectations on what the returns process should be compared to someone who is returning a jacket because they ordered the wrong size.
In general, however, customers will expect some common elements to a return regardless of the circumstances. These include:
- Easy to find information on returns on the company website
- Ability to ask questions and get answers through live chat, email, and phone
- Ability to track and monitor the progress of their return
- Minimal steps to complete the return process
- Option to return through shipping or return to local store
If you’ve noticed that all of those elements can be described using words like simple, easy or convenient, then you’ve hit on an essential concept relating to returns. Returns need to be straightforward for customers, otherwise they can become frustrated quite quickly. Customers who become frustrated with returns often believe they were misled by companies, which drastically reduces the likelihood that they will become repeat purchasers or refer that company to others. As you can see, a lot hinges on the effectiveness of a company to meet the expectations of customers who need to return their purchase.
How Are Brands Meeting These Challenges?
One key aspect to managing customer expectations is to clearly communicate a message that conveys the added value of your return policy and procedures. By doing so, for example with a clearly stated message on your website referring to “Hassle Free Returns” you are reaffirming the customer with assurance and comfort that your company is easy to do business with. Many major retail brands are now prominently featuring similar messaging across their websites, in their stores, and in their advertising as one of their core value propositions.
Some options that brands are incorporating as part of their returns approach include offering no-cost return shipping to their customers, including pre-formatted return shipping labels in the documentation provided with a product, and making arrangements with major carriers to provide pickup or drop-off services to their customers.
Old Navy & The Gap here in Canada understand the returns process, and now provide pre-paid shipping labels/bags with all their online orders to facilitate hassle free returns. It’s something their customer’s love, which leads not only to repeat orders, but word of mouth referrals.
In the end, adjusting your business to provide a better overall returns experience is not about flipping everything upside down and starting over, but simply refining and improving each step of the returns process that already exists. Adding online tracking, email return requests, pre-packed return labels, or return to store options are not ground-breaking changes for most companies, but each one can add a lot of value in the eyes of a customer.
The time of viewing returns as simply a cost of doing business are long gone. If your business doesn’t view returns as a real opportunity to build value and strengthen customer satisfaction, you are missing out on some significant benefits. It’s been proven that customers who have a problem solved to their satisfaction or beyond by a brand have shown a high likelihood to have a positive view of those brands as a result of the service they received. Savvy brands would be wise to continue to deliver a positive returns process, and build an even better experience every step of the way for their customers. Investing in customer satisfaction is a sure way to deliver more value to each and every person who places an order with you.
The experts at SCI have helped many companies enhance their returns processes and achieve higher levels of efficiency and customer satisfaction. Contact us today and our team of logistics professionals would be happy to answer any questions you may have.