Retailers take note—these five myths about returns can have a serious impact on your business.
It doesn’t really matter what a retail business is selling, it’s probably had its share of returns. That’s because returns happen. Sometimes a customer simply changes their mind or a product is damaged. Whatever the case, it’s probably fair to say that shoppers have been returning items just as long as they’ve been buying them.
So, as a business, you probably know all there is to know about returns. Right? Think again.
There are a shocking amount of misconceptions about returns. While some of these myths are simple oversights, a lack of understanding regarding returns data ultimately keeps these myths alive. At Returnalyze, we’ve analyzed the data and have the credibility to clarify these misconceptions.
Read on and discover five returns myths that every business should know about.
MYTH: Bracketing is Bad For Business
Bracketing is when a customer purchases multiple sizes and variations of an item, selects their favorites to keep, and then returns the rest to the retailer. This behavior ensures that a customer will receive their ideal product the first time, rather than returning a version that didn’t work and risk it being unavailable later.
While that may seem bad for business, we’ve found that its impact isn’t as damaging as you might think. Bracketing can even provide opportunities for increased net revenue. While consumers who bracket for sizing purposes are much less likely to keep multiple sizes of the same product, retailers often experience minimal returns from customers who bracket for color or style.
For example, when returns data identifies size bracketing, providing additional fit and sizing information can reduce those returns. Conversely, sometimes offering additional product variations can encourage customers to bracket for style and keep more than one item.
MYTH: Returns Are Only A Logistics Problem
Believing that returns are only a logistics problem isn’t just incorrect, it opens the door for net revenue losses. Yes, returned items can require additional labor, impact warehouse utilities, take up valuable warehouse space, etc. However, the impact that returns have on the customer experience and overall loyalty can’t be overstated.
For example, imagine that a garment has a high return rate. Yes, the increased returns will impact logistics, but if the issue isn’t resolved then the damage will quickly extend beyond logistics. Not only can it diminish the lifetime value of loyal customers, but it can damage a brand's reputation and deter new shoppers as well. In addition, any marketing efforts that include that garment may see a decreased ROI.
MYTH: Returns Negatively Impact ALL Customers
Customers return products for a wide variety of reasons. Whether it’s an unwanted return (damaged item, size mismatch, product quality issue, etc.) or an acceptable return (customer changed their mind or didn’t like the product), each return transaction provides opportunities.
When a customer simply changes their mind about a product, making the return process easy creates a positive experience that can encourage loyalty. On the other hand, when a product has a high return rate because of a defect, solving the issue communicates to customers that their opinions matter and that a business is willing to act on those opinions.
Returns will always be part of retail. When businesses understand the different types of returns, whether acceptable or unwanted, they can use that information to increase customer lifetime value and net revenue.
MYTH: Customers Can Read Reviews So They Don’t Need A Size Guide
Surprisingly, retailers that offer clothing, apparel, and footwear often don’t include detailed sizing charts. While reviews can offer insight into fit and sizing, customer reviews can be vague or inconsistent. Ultimately, this can lead to higher returns and negative consumer experiences.
First, a lack of sizing information creates too many opportunities for incomplete transactions. While shoppers can and do read product reviews, having to dig through all of that information takes time. During that time, they could lose interest, become overwhelmed, decide to shop with a competitor, etc. In addition, having detailed sizing information makes it more likely that they’ll purchase the correct size during their first transaction.
So, along with speeding up the buying process, providing sizing information can create a better customer experience and promote loyalty.
MYTH: I Can’t Reduce A Return Rate That’s Already Low
While we understand the desire to work with certain benchmarks, it’s often more important for a business to pursue the full opportunity which would be better than an industry benchmark. Even small reductions in return rates can result in materially increased net profits and improved customer experience. By analyzing granular returns data, even low return rates can be further reduced and have a meaningful impact.
It’s also important to remember that there will always be high-returning items well above the overall benchmark that the business should act on. Looking at returns data will identify those pockets of opportunity where returns are high, even if the overall return rate is low.
Moreover, returns data can be used to generate predictive models to anticipate returns issues and work to prevent them before they turn into a much bigger problem. Both high return rates and low return rates provide valuable data that can be used to optimize and anticipate many aspects of a business's operations.
Returnalyze | Use Returns Data to Improve Your Business
We don’t just measure returns. At Returnalyze, we help brands control their returns by expertly analyzing the data, identifying insights, and generating strategic solutions to improve multiple levels of their business.
Access to our Intelligent Dashboard allows our retail partners to track their returns and explore specific trends, outliers, impact, and so much more. Granular data of that nature is only as good as the experts that analyze it though. That’s why a partnership with Returnalyze comes with step-by-step guidance and analysis from our data experts.
If you'd like to see how our intelligent dashboard can help you take control of returns, schedule a demo or contact our team today.
