Returns are a neglected part of the online customer experience. This is costing customers time they can't afford to waste; it's costing businesses money they can't afford to lose, and it's making everyone increasingly frustrated. As the cost begins to mount for all parties involved, including the environment, it’s time to reimagine the returns process. In this article, we bring together Wunderman Thompson Commerce’s experience of working with 50 of the world’s biggest retailers and a robust piece of research to outline how businesses can tackle the beast of returns and win a share of customers’ wallets.

No one enjoys returns. Customers dislike them because the process is convoluted, costly and time-consuming, and the refund takes too long to reach their bank accounts. Our global 2022 Future Shopper research found that 23% of everything that is ordered online is returned. It also found that 2 in 5 consumers (39%) over-purchase with the intention of returning some items. Both are significant statistics, and whether customers shop with either no or clear intent to return an item, the returns process can be a major friction point

These figures also mean that returns and refunds are a considerable pain for businesses too. Returns are estimated to cost £60 billion a year for UK retailers. Retailers must account for shipping fees (as many returns are free), time and costs associated with checking that items are in re-sellable condition - from hiring staff to check the condition of returned items, to putting the items back in stock online and sending them back out to customers again.

Returns cost the environment too: US returns alone create £5 billion of landfill waste and 15 million tonnes of carbon emissions annually. Such environmental impacts can have detrimental effects on retailers’ reputations too.

In recent years, retailers have had to adapt to a new era of online shopping. But their returns processes have often failed to keep up. January is expected to be peak returns season following key milestones for retailers in December: Black Friday, Christmas and Boxing Day. The January sales will add fuel to the fire.

A poor returns experience can have dire consequences for retailers for the rest of the year. Customers are used to no-quibbles returns from retailers like Amazon and ASOS, so when other retailers fail to follow suit, customers have nothing holding them back from taking their business elsewhere.

So, what can retailers do about this?

The culprit of returns

Finding out and addressing the cause of returns could be a good starting point. The chances that an item bought online will not meet customers’ expectations are high. According to a survey of 1000 British consumers we conducted in August 2022, poor product information online is often the culprit. It is among the top 3 reasons for returns.

Poor information could mean a few different things: from poor to few or no images of the product, to the description failing to reflect the quality of the product, or to size guides not being consistent or lacking essential information.

Addressing this issue could help retailers prevent returns. To do that, retailers should:

  • Provide high quality images of the product, offering a true reflection of what the product is, and its quality. For some products such as large furniture, AR tools could help consumers better imagine what the product would look like in their home.
  • Ensure that product descriptions are correct, easy to understand and complete i.e. there is no missing information. Dimensions for large items are critical. “Finding out that your dream sofa doesn’t fit through the door can be immensely disappointing. And then you have to deal with the return”, says one of the participants in a round of focus groups we conducted in August 2022.
  • Make choosing the right size as seamless and easy as possible. This means providing accurate sizing information including measurements and the use of a “find your fit” guide. “Inconsistent sizing was less of an issue in the past when we would try shoes or clothes in-store”, says Michael Rokes, Head of UX at WTC. “In a digital world, such inconsistencies are unacceptable, especially when they are between different lines of the same brand. Size 10 should be the same for all products of that brand”, he adds.
  • Maximise the value of reviews. Reviews are a critical source of information for customers because they help them learn more about the products from real users. They can provide reassurance about sizing, colour and quality issues.

Improving the online experience would reduce returns and increase consumer confidence, but on its own it won’t stop returns altogether. Taking steps to reimagine the returns experience should be a priority for retailers. So, what do consumers want?

The 5 ingredients of the ideal returns experience

To understand what the ideal returns experience should be, we spoke to 48 customers across 6 focus groups and followed up with a survey of 1000 British customers. There will inevitably be industry nuances – the return of white goods will differ to that of clothing, and both will differ to health and beauty returns. However, when it comes to overarching principles defining the ideal returns experience, the evidence is clear – customers want 5 simple things.

  1. Free returns

    Returns should be free. Our experience shows that customers will not trade off a free, paid-for-by-the-seller return for anything else whether businesses like it or not. Making this possible should be a top priority for retailers.

  2. Transparency of returns information

    The returns journey has many touchpoints, on- and offline, and it starts earlier than retailers might realise. 61% of customers look for returns information before or during purchase, and of those, 25% won’t buy at all if they don’t like the returns policy, according to the survey of 1000 British consumers we carried out. Retailers might be driving customers away without realising it by not providing the relevant information online or by making it hard to find. “It is key that retailers ensure the returns information is easy to discover online and mentions all the relevant details in a simple, straightforward language” recommends Rachel Smith, Experience Director at Wunderman Thompson Commerce. “Customers are smart enough to sense if a company is not being transparent about its returns policy”, she adds. So, retailers shouldn’t try to hide a poor returns policy either.

  3. Efficiency of the returns process

    Once customers realise they need to return their purchase, they start looking for ways to let the retailer know, and get the process started. Ideally, customers expect all information to be provided in the packaging: the label is printed and they don’t have to pay for it. But if it isn’t, making the process as seamless as possible online is critical. “From starting the return to generating the label, it should take a minute or so of customers’ time”, says Rachel Smith. Customers should know where to look for that information – most expect to check the order confirmation email or their online account if they have one. “There’s no single template for creating a seamless experience online, but retailers can start by conducting a UX audit to identify how they measure up against best practice and identify where they fall behind”, Rachel adds.

  4. Choice of shipping options

    Our research shows there’s very little difference between customers’ preference for home pick-up and drop-off at a collection point. So, giving customers the option to choose from different shipping methods to suit their needs is important. This is especially important when large items need to be returned – some consumers might prefer to drive the item to their nearest drop-off point, while for others a home pick up would work better. There is plenty of space for innovation. In the US, Walmart now allow customers to remain in their vehicles when returning items, while UPS are trialling a program allowing customers to have their return picked up from their homes without needing it to be repackaged.

  5. A fast refund

    Finally, the refund. Consumers are clear: they want their money issued back to the original payment method fast – this should happen within 10 days of the item being sent back. “If the company can take my money before they send me the product, why can’t they return my money before they’ve received it back?”, was a common response among our research participants in focus groups and interviews. Customers also don’t want a voucher or points, so retailers shouldn’t try to replace the need for a refund with credit added to their account.

Our research shows that sustainable return options are further down the list of customer priorities. That’s not because customers don’t care about the impact they have on the environment. To the contrary, 63% say that shopping sustainably is a priority for them. However, as the returns experience is already so poor, customers feel retailers should first get the basics right before trading them off for a more sustainable approach.

So where should retailers start?

As mentioned earlier, preventing returns by improving the online experience would be a good starting point. It can reduce the environmental impact of returns and costs for businesses whilst keeping customers happy with their purchases.

Retailers will also be well positioned if they know the main reasons for returns in their own business. They should ask consumers to provide that information and spend time analysing their feedback.

But to be prepared for a future of predominantly digital shopping of which returns are an inextricable part, they should look to improve their overall returns experience. Knowing what consumers expect from the ideal returns experience, the next step is to identify how well your business meets these needs, and to pinpoint the key issues. “Back-end logistics, financial processes and customer care centres all have a role to play in delivering an excellent customer experience, so looking into each of those and the holistic role they play will help surface some of those nagging issues”, says Michael Rokes.

A service blueprint of the returns process would offer rich insight into each of those back-end operations. “A service blueprint is normally carried out by Service Designers who can track the frustrations that customers experience across the whole journey to back-end inefficiencies, allowing businesses to focus on treating the cause of the problem rather than the symptoms”, Michael adds.

Retailers must prepare for the digital future to survive, and the old returns process is not going to cut it. As consumer loyalty is more fickle than ever, those who reimagine their returns experience sooner rather than later will capture the value it has to offer.

How Wunderman Thompson Commerce can help

If you’d like to find out more on reducing returns and making the process smoother and more cost effective for your business, get in touch with our CX team. Please also enquire about our complimentary CX Audit.

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