Return rates are a key metric for online brands and retailers, and managing them effectively is crucial to maintaining customer satisfaction and profitability. A return occurs when a customer sends back a product that they have purchased from an online retailer, and can happen for a variety of reasons, from defective or damaged products to incorrect sizes or fit to a simple change of mind. However, they can seriously damage a brand and retailers’ bottom line, so it’s vital to look into how to reduce e-commerce return rates.
This article will cover the following:
Why are return rates important for e-commerce brands and retailers?
Return rates are important for e-commerce brands and retailers because they can have a significant impact on their bottom line. High return rates can result in lost revenue, increased costs associated with processing and restocking returned items, and negative customer feedback.
Return rates can also impact a retailer’s customer satisfaction and loyalty. Customers expect hassle-free and easy returns, and if they have a negative experience with a return, they may choose to shop elsewhere. Therefore, tracking and managing return rates is essential for e-commerce retailers to ensure they maintain a profitable and customer-centric business model.
The impact of high return rates on e-commerce retailers
The average e-commerce returns rate hovers around 20-30%. The main reasons for this include:
- Incorrect size
- Purchase of multiple products to try (with intent to return)
- Poor quality
- Product doesn’t match online description
Returns can have a significant impact on the financial health of e-commerce businesses, leading lead to lost revenue, increased costs, and negative customer feedback. When customers return products, brands and retailers must issue refunds or provide exchanges, which eats into their profits. Additionally, processing and restocking returned items can be expensive, particularly for high-volume returns.
“The cost of returning a $50 product is roughly $33… meeting customer needs will result in less returns” – Forbes
Strategies for managing e-commerce return rates
Effective management of returns can help DTC consumer brands improve customer satisfaction, reduce costs, and increase revenue. One solution brands and retailers can leverage to do so is live 1-2-1 video shopping, which enables customers to interact with a brand ambassador in real-time via video chat.
Live 1-2-1 video shopping
With live 1-2-1 video shopping, customers can receive personalised assistance from a salesperson. This can help customers find the right product for their needs first time round, reducing the likelihood that they will return the item. For example, a brand ambassador can help a customer select the right size or colour, or provide recommendations of products based on their preferences.
Increased confidence in purchasing decisions
By providing customers with more information about products, including details on the fit and sizing, they can make informed purchasing decisions. This can help reduce the likelihood of returns due to sizing issues or other product-related problems.
Reducing return rates through live 1-2-1 video shopping can lead to cost savings for brands and retailers. By reducing the number of returns by ensuring the customer selects the right product first-time round, brand and retailers can save on processing, restocking, and shipping costs, as well as avoid the negative impact of returns on their bottom line.
How Confer With reduces return rates by 40%
Live 1-2-1 video shopping platform, Confer With, has seen e-commerce return rates reduce by up to 40% with real-time, personalised interactions.
The brand ambassador can assist the customer right the way through the transaction and answer any detailed question they may have about their purchase. Should the product not be available to hand, the brand ambassador can offer alternative suggestions to cross-sell.
The Confer With platform allows brand ambassadors to navigate products via the recommendation engine, which gives them the ability to show customers alternatives and add-ons, as well as search for the item in the product SKU. The suggestions tools allow customers full immersion into the company’s products. Both parties are then able to edit the shared virtual basket, but the brand ambassador is also able to show alternatives and add-ons. This can empower teams to reduce return rates greatly as customers are equipped with the information they need to make the right purchase first-time round.
- E-commerce return rates can significantly impact brands and retailers’ bottom line
- Live 1-2-1 video shopping reduces online return rates by providing personalised assistance and increasing customer confidence in purchasing decisions
- Confer With reduces online return rates by 40% with their immersive alternatives feature