By Dan Nevin, Doddle
When it comes to how people shop, we have distinctive preferences, but we repeat ourselves and form habits. This habitual nature allows retailers to group shoppers into segments or personas, which in turn help them to shape their marketing and acquisition efforts, as well as drive retention and loyalty.
Part of a customer’s desire to come back and shop again needs to come from a retailer’s returns proposition – the fallback for when something goes wrong or when a shopper just isn’t sure about their purchase. Habits and shopper archetypes play a significant role here, too. Retailers should be figuring out their customer base and understanding how they fit into these online shopping personalities so that they can maximize the value of their returns operation and generate maximum loyalty for minimum cost.
Following are some typical types of returners and advice for delivering an ideal experience for them:
The Buy, Try, Return-Er
These are people who love to shop. They will bring piles of clothes into the fitting room and then go back for more. Shopping is their recreation of choice, and if they can’t or don’t want to visit stores, as many of us haven’t in the last year, they are also devoted online shoppers. When buying online, their homes become the fitting rooms and store floors, spaces for them to test out products from fashion to housewares to beauty. As a result, they return a lot of products – but that’s not necessarily a bad thing.
Doddle research has shown that these customers, while picky, often transpire to be high-value and loyal, so they definitely shouldn’t be judged on returns volume alone. Klarna estimated the top 10% of returners account for nearly half of all returns – but they spend about three times more than the average customer. Of course, whether that’s worth it for a specific retail business will depend on the cost of processing returns and the value of their orders. The point is returns have to be included in the bigger picture, not just treated separately.
It’s not surprising that many shoppers fall into this category. They like what they see but either don’t trust their judgment or the website’s depiction of a product to be accurate. They may prefer to buy multiples of products in different sizes and colors, just to be sure. While many consumers admit to this kind of shopping, it’s not binary – very few do this every time they make a purchase online.
What it does mean is that they’re more likely to find the right product in the end, which can improve their loyalty. However, this type of behavior is a symptom of a bigger issue: shoppers aren’t confident in a retailer’s site to let them select the right product at the first guess. If they were, there would never be a need to buy three variations and return two.
Certainly, some shoppers will just be risk-averse and prefer to buy multiple variations of an SKU, “just in case.” That said, a lot of this returns volume can be minimized at the source. Retailers need to capture returns data about which products are returned and why. That allows them to figure out where the specific, addressable challenges are. Then they can trial solutions, for example, clearer product photography, or a sizing assistant, or more customer reviews on product pages to give shoppers more confidence.
The Mood Booster
Shopping makes us feel good. That’s a scientific fact. Mood Boosters love to shop purely on that basis – they get a kick out of browsing and trying on, luxuriating in the experience. However, having a browse, touch, and try in the real world often doesn’t translate online, so they get their buzz at the checkout and then enjoy the excitement of anticipation. The problem is, these are the shoppers that the term “buyer’s remorse” was invented for, and they are prone to returning items once the joy of the spree has worn off. After analyzing their shopping habits, a retailer might discover they have a negative lifetime value – costing more in shipping and processing than they ever spend. On this basis, it might be prudent to implement paid return shipping for these customers, or even go so far as removing them from campaigns and discount lists, as to not put temptation in their way.
These shoppers will make purchases, use the goods, and then attempt to return them for a full refund. And while it’s an issue, it’s important to be aware that it’s not the all-out catastrophe it’s sometimes made out to be. The total number of returns that are fraudulent in this way is quite low. That said, having highly desirable items hit an Instagram feed and then hit a retailer’s returns processing center ultimately just costs money – albeit in exchange for some amount of word-of-mouth promotion. In categories like apparel, the clock is ticking before the next big thing arrives, so time is of the essence if returned items are to make it back on sale.
The question for retailers is whether it’s happening enough to be worth doing something about – what does it cost, and what are the costs of addressing the problem? Giving legitimate customers hassle over their returns can be a very high price to pay to ensure nobody is wardrobing – beware of the drive to completely eliminate fraud at all costs.
Stating clearly in return policies that wardrobing is unacceptable is a good first step without any risk to reasonable customers. Being able to discriminate between products that have been tried on versus actually used is challenging, but when shoppers are returning items for reasons other than faults, any signs of wear or use should be checked carefully. If this flags an instance of fraudulent behavior, retailers may wish to begin with a warning or a charge for shipping rather than immediately refusing the return. Customers who know their returns are being checked are unlikely to repeat offend, and this can do the job of reducing fraud without blacklisting customers – though this, too, is an option in worse cases.
Data Is The Driver
For all the “returner personas,” the best way to identify them is through data – whether that’s volume, frequency, turnaround, or reasons for not keeping the items. If a retailer doesn’t have this immediately on hand, it makes the task of working with these customers to reduce their need to return much harder.
The swiftest way to access this information is through a digital returns platform that gives the customer an easy way to return, with great visibility and communication, while simultaneously providing the real-time returns information needed to put rules in place to mitigate costs and understand the way customers treat their purchases. Having the insight is the first step to making progress and turning returns into a loyalty-generating part of an overall offer to shoppers.
About The Author
Dan Nevin is Chief Revenue Officer, Global Retail at Doddle.