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I was recently involved in an online discussion (ecomchat) which started when the question was asked "how important is delivery, shipping & returns for retailers?".

I responded with a home truth based on all the 100's of hours of user research that we have conducted/are continually conducting for multichannel retailers. 

When a user/consumer has a choice of retailer from which to buy the product they are looking for, after price then it is almost always delivery options, delivery costs and then the returns proposition that are the three most important factors which influence buyer behaviour.

The back story

This then led on to feedback from a few ecommerce professionals citing how many brands, particularly catalogue retailers, can have upwards of a 50% returns rate (not too great for accurately reporting on your monthly revenue from GA eh!).

I got the impression from this feedback that the idea of providing and promoting free returns, or to in any way be appearing to make your returns proposition appealing to visitors, isn't business centric as you are encouraging this behaviour from your customers.

I then posed the question (stay with me on this, there are some tips and techniques to come!) 'who is to blame for having a high return rate, the retailer or the customer'" to which one of the responses I got back was 'in reality the fault lies with both, for retailers sizing consistency and customers never reading the sizing'.

Getting to the point

At this stage, having now being focussed on understanding and using insights from the voice of the customer for retail businesses for over 13 years (including my first seven years at the UK's biggest home shopping retailer Shop Direct Group, who ironically did for a long time have very high returns rates), I felt that this short article was worth writing.

Here are nine ways retailers can influence returns rates

Size guides

Ensure your sizes and size guide uses expected sizes that visitors can relate to (UK women expect to see standard sizes of 8, 10, 12, 14 etc).

Here, Next only shows women's shoes in continental sizes, with no other information on what these means in UK terms: 

If, like me, you don't know how these equate to UK sizes, then you're stuck. Will customers find out elsewhere and come back to purchase or just leave the site?

It's a risk Next doesn't need to take. It should be providing UK sizes for UK visitors. 

Link to relevant size guide

Provide a link to the relevant part of your usable size guide, rather than your full size guide areas, right next to size selector on product pages, as an overlay or simple lightbox window. 

Here's a good example from Schuh. Next, take note. 

Encourage accounts

Account holders typically have more brand affiliation to make repeat purchases, in turn helping them get a better understanding of the sizes of the clothes from this brand. 

Do all that you can to encourage 1st time customers to create an account with you at the end of their transaction.

There is a balance to be struck between encouraging registration and reducing abandonment though. 

Provide info on size of models in product images

Provide visitors with the size of the model and the size of the product they are wearing so visitors get an accurate understanding of the fit/flow. 

Here's a good example from Oasis: 

Allow customer feedback

Allow customers to provide product feedback on the fit of the product, as one of a few different review attributes such as value, durability or others that suit your products. 

Schuh allows this in customer reviews

Fitting tools

Consider implementing a fit guide like ASOS fit visualiser or videos on sizing on the Speedo Sculpture range to help visitors understand which size will be best for them.

Gather feedback from customers returning goods

Ensure you encourage visitors to not only specify the reason they are returning an item but also to provide feedback which can qualify the reason more than just 'size not suitable'.

Look at products with high returns rates

Identify particular products which have high returns rate to understand if there are potential quality issues which can be addressed. 

Use video

For fashion products, if budget permits, provide short videos of the product being worn to bring the fit and flow of the garment to life. 

Net A Porter does this: 

Good product imagery


Ensure photographs accurately represent the quality of the product and show all important elements. 360 degree views can really help on this.

Here, Schuh provides the 360 view, as well as a range of images: 

Provide free returns

Finally, more as food for thought, consider the potential resentment from customers if you don't provide a flexible, free returns policy, as your competitors are almost guaranteed to be doing already.

Summary

First and foremost it is the retailer's responsibility to allow visitors to make a well informed decision when ordering what will hopefully be the correct size rather than ordering two different sizes.

In this post I have shared some of the main techniques which can facilitate this from my experience.

Questions for you

  • What techniques have been successful in reducing your return rate?
  • Has the investment in technology aimed at reducing returns rate delivered ROI?
  • What % of your returns are from multi-size purchase behaviour versus single size but (enter reason for return here) behaviour?
  • What does the future hold for retailers with potentially damaging returns rates?
Paul Rouke

Published 10 July, 2013 by Paul Rouke

Paul Rouke is Founder & CEO at PRWD, author and a contributor to Econsultancy. You can follow him on Twitter or hook up with him on LinkedIn.

36 more posts from this author

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Nick Craig

Nick Craig, Managing Director at Mackerel Media

Turns out there's an app for that, so-to-speak....there's a very interesting new tech company who have developed a predictive analytics product to tackle this precise problem: http://www.clearreturns.com

They've just launched officially with M&Co, who have 300 stores across the UK in addition to their hefty ecommerce operation.

about 3 years ago

dan barker

dan barker, E-Business Consultant at Dan Barker

nice post, Paul - I like the topic - and thanks for the mention of #EcomChat. Glad you enjoyed it & picked up some useful stuff!

The biggest change I've seen here was a retailer I once worked for. The returns rate started at 12%, and ended up under 3%. (ie. cut in 4)

Here were the 4 activities that caused the change:

1. Audit, prioritise, and scope the potential 'levers' behind the return rate.
2. Set the right measures, metrics, and information gathering process in place to understand what was happening and why.
3. Set a target at a 'business' level. (ie. not just for the UX team, but for all those who also impact it - eg. sales people/buyers/
4. Set the people process in motion to fix the 'problem'.

dan

about 3 years ago

Stuart McMillan

Stuart McMillan, Deputy Head of Ecommerce at Schuh

Hi Paul,
Great post, thanks for the Schuh name-checks!

A couple of notes:

You can send negative transactions to GA, should you wish to have analytics show 'net sales' http://www.ga-script.org/en/posts/2012/05/remove-e-commerce-transactions-from-google-analytics

We're soon going to be asking for fitting feedback in product reviews, so we can improve the fitting information on our product pages.

Further to your free returns point, I think this is may be a great way to reduce the returns rate, but not by reducing returns quantity, by increasing sales quantity. We currently offer free returns for account holders through the Collect+ network, if you aren't an account holder and use Collect+ you have to pay £2.50. Those who had free returns were actually worth twice as much to as compared to those who had to pay £2.50. They returned more, but they bought a lot more (proportionally) than those who had to pay to return. At the end of the day, it's the net value of the customer that counts, as that is what leads to profit.

about 3 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

Great topic and one often moved down to a secondary or tertiary priority for retailers - until they realise how high their rates are.

I'd expand on including some basic contextual information on customer reviews - for example if on a shoe site someone writes a review that the shoe wasn't wide enough, it would be more useful to know they have 'wider than average' feet (whatever that could mean) - by way of example of which Halfords are one of many that use this, if buying a mountain bike, it's useful to know whether the review is a casual or serious biker, or on Kiddicare knowing whether the reviewer is a first-time parent, grandparent or parent to multiple rascals...

This helps where reviews are available, to provide the context by which to make a more informed purchase.

On the topic of free returns, my point to note here is to ensure that if you run any type of lifetime value analysis you ensure you minus returns from sales by customer - some retailers have been known to run lifetime value based on total revenue for a customer without including the many free returns they've made too!

I would also add live chat here as a way of ensuring the customer's questions and concerns are answered up front. I haven't seen this on many retail sites (that I visit) however its another way of ensuring the customer gets what they expect/require and potentially reduces return rates.

Also worth checking return rates against campaign - for example you might see higher return rates during a product launch than say a sale - sometimes a lack of product images, detail or reviews plays a part where these were not available on time. This can be analysed against returns to understand the cost of not having this ready for launch. Can extend this to channel/season/category etc and drill down to identify potential concern areas.

Finally, I would also state that retailers should accept that returns are going to happen online. I'm not saying you shouldn't try reduce returns, but 0% returns is unrealistic for most/all FMCG retailers. Without the physical aspect certainly for things like apparel and I'm one of these customers, you might receive something and the fit just isn't right or the style or colour isn't quite what it seemed on the site (since most product shots are taken in studios with perfect lighting to give the product the best shot - when in reality this isn't always the in-store experience where you can pick the item up, hold it in various light conditions and angles etc).

about 3 years ago

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Michael Fieg

Excellent article! My colleagues and I are working since a long time in the area of Product Information Management. Your examples show very good, how return rates are related with product data quality. Especially retailers have to think about their assortments and the classifications and item attributes. Multi-Supplier assortments require flexible backend processes... and a strong comittment from the whole team, starting with the purchasing department. It is not only a question of good software. Especially if established (brick-and-mortar or mailorder-) retailers are entering Omni-Channel strategies, they realize that their processes are not made for huge assortments. But end customers will definitely ask for all products of their top-brands. Solving this problem means changing the organization and entering a next level of category management.

Michael

about 3 years ago

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Vicky Brock

Interesting points Paul and many thanks for the mention Nick. The fundamental principle of all the data mining, segmentation and predictive analytics that we run at Clear Returns is that decision making should be based not on what the customer buys, but what they keep.

Many customers do want to keep what they buy, they do see a return as an inconvenience, their returns are due to an expectation gap and a poor experience does impact their likelihood to shop again.

But this is not true for all customer segments. For example, I'm a classic over-buyer (which is why Clear Returns was born). I just bring the shop to me and choose at home. I love free shipping and free returns. I never intend to keep everything I buy in an order - the sale is not the end of the process for me, its the beginning, as the selection takes place at home.

If, as a retailer, you encourage me I can can cost you a lot of money very quickly and if the focus is on my top line, not bottom line value, that is exactly what happens.

There are a lot of internal and external incentives to focus solely on revenue, not profit and the true cost to serve is very hard to calculate. But the unintended consequence of this can be escalating returns.

So when you measure optimisation impacts based only what you sell and reward customers (with spend related free shipping, spend related special offers) based only on what they buy, then the danger is that dysfunctional returns behaviours become not only embedded, but encouraged.

about 3 years ago

Gary Robinson

Gary Robinson, Head of Marketing at Crunch Accounting

Great post Paul. If I worked in retail ecommerce, I'd be flicking over to my product pages right about now to see what can be done first.

One of your questions at the bottom jumped out at me:

'What % of your returns are from multi-size purchase behaviour versus single size but (enter reason for return here) behaviour?'

Now admittedly this is based on a small sample size, but based on real world observation - i.e. my wife shopping online - it seems there is a real lack of trust that sizing charts are accurate, that a 12 on one site isn't actually the same as a 12 on another. The resulting behaviour is to order the same thing in 3 sames - the preferred size and then one up and one down.

The ASOS fit visualiser would seem to try to address this issue, but it's getting the customer to go through that process. As a consequence, the customer, knowing they can do free returns, takes the more convenient route and just orders multiple sizes.

Quite a challenge to overcome.

about 3 years ago

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Mark Bolitho, New Business Director - Ecommerce at more2

Hi Paul

A cracking ecommerce subject, and I really don't think anyone has the definitive answer.

Interestingly, I did a straw poll with several of the girls in the office on a site using Fits.me

Clearly the retailer has implemented this with a view to reducing returns but none of them actually said they'd trust it, categorically, and would be inclined to still order more than one size.

I've also been caught out with colour before, but without everyone having the capability and know-how to calibrate monitors that will always be a tricky one.

Possibly the best that can be done is to accept returns as an integral part of ecommerce and focus on how to make the returns process as simple as possible.

Thanks
Mark.

about 3 years ago

Gary Robinson

Gary Robinson, Head of Marketing at Crunch Accounting

Andy Murray lead image?? Reducing returns? Nice topical, tenuous link, Paul ;)

about 3 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning Paul,

Hope you're well. Nice post and thanks for the #EcomChat reference!

I agree that delivery & returns are a major online battleground for retailers. Customer expectations have risen as the quality and variety of service has been driven, largely by big brands like Amazon but also through small business owners who just get customer service.

For me the big change has been the companies who look at delivery & returns from the 360 degree perspective - not just putting up a tight policy but thinking through how the entire business plays its part. A good example is social media - how can brands use social channels to a) communicate the service b) respond to problems c) proactively manage customers who they know like using social media to contact them.

I think this fits with Dan's 4 point plan above which is all about people and the processes that then enable them to deliver results.

There are so many good and bad examples but I still come back to Zappos as a company that embodies customer-first planning. When I give this example of a brilliant delivery/returns policy I usually get the stock reply "Yes but they're a big company with scale so can afford to do it". That misses the point; they didn't start big but Tony Hsieh put customer service at the forefront of the company mission, so it's part of the culture. My point is this - you can't provide excellent service around delivery & returns if you seem them purely as policies to satisfy and not as ways to delight customers.

In your personal (not professional) experience, which brands do this brilliantly? I like a company called Accessories Online - great communication, good options and brilliant packaging.

Thanks, James

about 3 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning Paul,

Hope you're well. Nice post and thanks for the #EcomChat reference!

I agree that delivery & returns are a major online battleground for retailers. Customer expectations have risen as the quality and variety of service has been driven, largely by big brands like Amazon but also through small business owners who just get customer service.

For me the big change has been the companies who look at delivery & returns from the 360 degree perspective - not just putting up a tight policy but thinking through how the entire business plays its part. A good example is social media - how can brands use social channels to a) communicate the service b) respond to problems c) proactively manage customers who they know like using social media to contact them.

I think this fits with Dan's 4 point plan above which is all about people and the processes that then enable them to deliver results.

There are so many good and bad examples but I still come back to Zappos as a company that embodies customer-first planning. When I give this example of a brilliant delivery/returns policy I usually get the stock reply "Yes but they're a big company with scale so can afford to do it". That misses the point; they didn't start big but Tony Hsieh put customer service at the forefront of the company mission, so it's part of the culture. My point is this - you can't provide excellent service around delivery & returns if you seem them purely as policies to satisfy and not as ways to delight customers.

In your personal (not professional) experience, which brands do this brilliantly? I like a company called Accessories Online - great communication, good options and brilliant packaging.

Thanks, James

about 3 years ago

Paul Rouke

Paul Rouke, Founder & CEO at PRWDSmall Business Multi-user

Thanks for everyone for your comments so far, they're really appreciated.

@Nick - thanks for the promotion of Clear Returns, a very timely launch with M&Co. They look like they are in a good space with plenty of room to maneuver

@Dan - thanks very much for your feedback and insights on how that retailer reduced their returns rate by 3/4 - it sounds like they got ROI on the activities they undertook. Any chance you can share the name of retailer?!

@Stuart - I didn't think it would take you long to share some of work you are doing at Schuh! I must aplaud you for your transparency in sharing business insights like these and its a pleasure to have you as one of our retail clients. Thanks also for the clarification about sending cancelled or returned order details back to GA.

about 3 years ago

Paul Rouke

Paul Rouke, Founder & CEO at PRWDSmall Business Multi-user

@Depesh - thanks too for your detailed response on this topic. You've provided another layer of depth to the top level recommendations I have made in my post, its much appreciated.

Just picking on one of your points around customer reviews, and the importance of providing customers with the ability to about them in relation to the product, one of our clients Speedo do this extremely well with one of the most in-depth breakdowns of review criteria along with a short bio for customers leaving reviews. In summary the more visitors can empathise with previous customers who are leaving the reviews, the more influential and useful they become.

Booking.com also do this very well allowing to filter reviews by the type of traveller ie. solo, couple, family etc (although I still think they should provide an option for busines traveller but thats another story!).

@Michael - thanks for sharing your views on this topic, and for getting in the term Omni-Channel!

@Vicky - thanks for sharing your story and background to Clear Returns. I can certainly relate to some of what you saying from my home shopping catalogue days at Shop Direct - customers do like to do the selection process at home!

about 3 years ago

Paul Rouke

Paul Rouke, Founder & CEO at PRWDSmall Business Multi-user

@Gary - cheers for your comments, and yes a bit of irony with the Andy Murray picture! I agree this is quite a challenge to overcome. I hear exactly the same thing from my wife when buying from different retail brands. Its another reason why brands should do all they can to encourage new customers to becoming account customers, in addition incentivising them with reasons to come back and buy from them rather than a competitor. Amazon do a great job on this with their Prime proposition.

@Mark - thanks for your comments and for mentioning the trust word - still such a major area that brands irrespective of size need to focus on. Going back to Stuart's comments and the Amazon prime example, encouraging customers to buy from you over the long term rather than competitors, whilst still doing as much as you can to provide transparency to customers like I detailed in this article, is one direction of travel.

@James - thanks for stopping buy and adding your detailed thoughts in on this subject. Biased I know but when you are talking about customer service then our client Schuh is one of the most progressive brands that I have experience of.

Taking a different approach and not a brand that I expect will have an issue with returns, but Moo.com provide an exceptional post purchase communication and product packaging experience too.

about 3 years ago

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