By Graham Best, CEO, ReBOUND.
This article is brought to you by Retail Technology Review: Reverse psychology – how focusing on the returns process will actually help you sell more.
Retailers are often carefully attentive to the speed and accuracy of outbound delivery because of its obvious link to sales. But the same kind of focus on the returns process is often found lacking. Too frequently, retailers and their logistics partners brush the issue of returns under the carpet. However, what many don't realise is that the more focus given to the returns experience, the more they will actually sell.
Retailers need to ask themselves two key questions:
- Do you worry that a slow returns process prohibits international growth?
- Are you worried about the impact of returns on customer loyalty?
Most will answer yes to both questions; and those that answer no must either have a legendary returns experience, or they're so focused on outbound delivery that returns don't get a look-in. Unfortunately, most tend to fall into the second category because returns have traditionally been the poor relation of retailing. They are often an afterthought; a hassle to process and costly to manage. And yet, returns are important to consumers. According to an analysis of 20.8 million shoppers by consultancy Granify, a strong return policy is the most important decision-making factor for online shoppers of clothing and apparel; even more important than price.[1]
Some retailers might believe that simply having a returns process in place is enough. But this is short-sighted. An efficient and effortless returns system can be a way of distinguishing your brand in a crowded and competitive market.
Retailers need to adopt a reverse psychology mindset. By highlighting the strength of their returns process they risk opening the floodgates to more cross-border returns. But those that realise that this approach will actually boost sales, and are prepared for it, will reap the benefits. Even back in 2012, Craig Adkins of Zappos supported this idea when he revealed "our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers."[2]
The customer experience is cyclical, not a journey from one point to another and the way returns are handled makes a real difference to how customers feel about a brand. If the experience is positive, then trust is built between the consumer and the retailer, meaning the customer is more likely to stay loyal. What buyers really want (on top of free returns) is convenience, a seamless experience, good customer care and a fast refund time. At the point the consumer decides to return, the retailer has the opportunity to ensure this experience is hassle-free and positive overall but there is plenty of research to suggest this isn't always the case. A survey sponsored by Endicia highlighted that 46% of online shoppers in the USA kept purchases they didn't want because returning was too inconvenient, confusing and expensive.[3] This means the retailers are missing the opportunity to keep those customers engaged.
Reverse logistics now has a pivotal role in the entire lifecycle of online retail and is increasingly being seen as an opportunity to drive cross-border sales rather than an obstacle to sort out later. The harsh reality is that many retailers' sales could have already taken a big hit due to the returns process not being in check, without them even knowing about it.
Savvy brands are recognising that an efficient returns policy can serve as a powerful marketing tool. It's now time for those that haven't fully addressed their returns process to deliver.
[1] 'The Most Important Factor for Online Shoppers Isn't Price' www.inc.com, 3rd January 2014
[2] Econsultancy – '21 ways online retailers can improve customer retention rates' (2012)
[3] Endicia survey of US consumers featured in Entrepreneur '4 things Shoppers want in an online retailers' returns policy (infographic)' Harry Whitehouse, June (2014)
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