The significant rise in online shopping, coupled with the growing trend of “bracketing,” has led to an unprecedented increase in return volumes for retailers, presenting both logistical and financial challenges. According to Hannah Bravo, CEO of Loop Returns, recent data indicates a 28% surge in returns compared to the previous year, resulting in consumers returning a staggering $122 billion worth of merchandise.
In an interview with PYMNTS, Bravo emphasised the importance of maintaining customer satisfaction while controlling costs. Retailers are increasingly adopting digital tools and developing strategic policies to manage returns more efficiently. “Holiday returns hit new highs this year, especially in cosmetics and personal care,” Bravo noted, “however, returns in the following days grew more slowly than last year, suggesting retailers’ efforts to reduce returns are working.”
To tackle rising return costs, retailers are exploring various approaches. These include extending return windows, implementing return fees, and allowing customers to retain low-value items rather than returning them. "They’re also using digital tools like virtual try-ons and AI recommendations to help customers make better choices before buying,” Bravo explained. This shift aims to help retailers maintain a balance between customer satisfaction and controlling financial outlays during peak shopping seasons.
The broadening landscape of eCommerce has significantly altered the dynamics of post-holiday returns. Bravo pointed out that the rise in online shopping and lenient return policies has fostered new consumer habits. “Many customers now routinely order multiple sizes or colours of the same item, planning to return what doesn’t work, a practice called bracketing,” she said. This behaviour complicates the returns process for online retailers, requiring manual unpacking, inspection, and restocking of items, which in turn demands more personnel and warehouse space.
Digital tools are crucial in streamlining the returns process, both for consumers and retailers. According to Bravo, the integration of digital solutions facilitates a hassle-free return experience for users during the post-holiday rush. “Digital tools like return portals play a pivotal role in ensuring customers and retailers experience hassle-free returns, especially given the mass volume of returns post-holiday season,” she stated. These enhancements allow for various return options such as designated drop-off locations and QR code shipping label alternatives, which provide greater convenience for customers while benefiting retailers through improved workflow and inventory management.
A recent report from PYMNTS further indicates that ease of returns is a primary factor influencing consumers’ choice of retailers. Key reasons for post-holiday returns typically include products not meeting expectations, such as incorrect sizes, damaged items, delayed deliveries, or discrepancies between online representations and actual products. Bravo suggested that retailers should harness digital tools to ameliorate these issues, thereby enhancing the overall shopping experience. Technologies such as virtual try-ons and AI-powered sizing recommendations assist customers in making informed purchasing decisions, while accurate delivery tracking can preempt disappointments associated with late arrivals.
Online shopping trends also afford retailers valuable insights into customer behaviour, enabling them to identify frequently returned items and understand the reasons behind these returns. “This helps retailers spot which items get returned most often and why, allowing them to fix product issues, improve descriptions, and personalize product recommendations,” Bravo noted. In a climate where return fraud heightens, she highlighted the potential of leveraging fraud detection systems to safeguard against suspicious activities.
As online commerce expands, platforms are revolutionising the returns experience. The “buy online, return in-store” model is emerging as a particularly effective strategy, allowing customers to return products locally. This not only aids retailers in managing return processes more efficiently but also enhances customer interactions and loyalty while mitigating costs associated with labour and shipping.
Bravo remarked on this evolving scenario, stating, “The rise in online shopping has led to a new purpose for customers going back in-store, not to shop but to return.” She underscored that with digital platforms altering the returns experience, consumers now enjoy enhanced flexibility regarding where and how to return their purchases.
To further create a positive customer experience, Bravo suggested that retailers improve both pre-purchase and post-purchase strategies. Enhanced product imagery, AI-driven visualisation tools, and clear return policies can mitigate impulsive buying and the necessity to return multiple items. Additionally, incentivising exchanges by offering loyalty points or discounts can sustain customer satisfaction, even when stricter return policies are enacted.
As businesses navigate the complexities introduced by rising return volumes stemming from increased online shopping, the adoption of digital tools and strategic approaches appears integral to balancing cost management with customer satisfaction in the evolving retail landscape.
Source: Noah Wire Services