While numerous trends are going on regarding sales and marketing, one of the most notable ones is that retail returns are on the rise. If you were unaware of this, you might be wondering why it is so. If you are aware of this and are a store owner, you are probably wondering what you can do to lower your return rates. The increase in e-commerce automation has definitely played a part, but it doesn't really tell the whole tale of how and why retail returns are so common. Luckily, we will cover both the causes and the possible solutions for return rates in a single article. First, let's start with the reasons.
Causes of high return rates
While return rates are definitely higher compared to previous years, it is important to note that they are not evenly spread. Not every industry or every type of item is susceptible to high return rates. Companies that focus on luxurious, personal products are most vulnerable to high return rates. Meanwhile, services companies like Evolution Moving Company DFW that deal with large-scale projects rarely see returns. To understand retail returns, we need to dig deeper into when the returns are happening and why.
The most common period of high return rates is during holidays. Most notably Black Friday, Christmas, and New Year. These are the periods when people tend to splurge a bit and give each other presents. While this seems like a dream for retailers, the reality of it kicks in after a week or two. This is usually the period when people figure out that their gifts aren't that great and that they would much rather get something else.
Knowing that customers won't pay as much attention to prices, shops tend to increase them during these high sale periods. The trouble comes when a week after, the customer reclaims a product. Now, the shop is forced to repay the difference, which essentially negates the benefits of the high sales period.
Online shopping practices
The most significant contributor to increased retail returns is probably the online shopping practices. Namely, to keep customer satisfaction at a high rate, online stores are essentially forced to have lenient return policies. This is especially true for clothing stores, as customers cannot know what their clothes will look like until they get them. So, what ends up happening is that online customers treat their homes as changing booths. They order what they think they'll like and then return what doesn't seem right, fit, or suit them. Combine that with the need for top-notch delivery service, and you'll soon piece together why retail returns are such a big deal.
What to do since the retail returns are on the rise?
So, now that you understand the causes behind increased return rates, we can look at what reailers can do to manage theirs. Well, in essence, there aren't many options available. They can choose to incorporate the return rates into their calculations, thereby eliminating the surprise factor. Many companies choose to do that, as the following methods we will elaborate on don't apply to all products. After all, learning how to adapt to modern market trends and demands is a fundamental skill for store owners and a must for company survival.
Luckily, in certain instances, there are ways in which retailers can reduce returns. After all, most of them are due to customers not getting what they want. In this case, retailers need to work with their customers and use feedback to their advantage.
Getting feedback from customers
To change return rates, it is important to dig more into why they are occurring. More often than not, there is a specific reason limited to your industry that leads to these returns. It is important to learn what the issue is and how the customer sees the return policy. The more retailers can adjust to customers' needs, the better. If the nature of a product incentivises the use of the return policy, you need to figure out how to replace or negate that incentive.
An example of this is could be online clothes shopping. Newcomers to a store will usually have a hard time figuring out what size suits them. We all know that "large," "small," and "medium" are open to interpretation, which makes figuring out what fits that much harder. So, what ends up happening is that customers order items in various sizes. This allows them to figure out their size and return the rest. By doing so, they lose no money, and they ensure that the clothes suit them. So, how are retailers to either stop or lower their incentive to do so?
Including extra information
One of the best ways of lowering retail returns is to include as much information as necessary. For clothes, this means giving measures that will help customers have a good idea of size. The more retailers can help their customers figure out what they are getting before it arrives, the less incentive there is to return items.
While returns are on the rise, they don't have to negatively impact retail. The key is for retailers to incorporate those returns into their business strategy and plan accordingly. Some companies choose to deal with increased returns by making them arduous and costly. At first glance, this might seem like a good idea. But, in the long run, it will do much more harm than good. As we have said, customer satisfaction needs to be a top priority if retail businesses are going to survive in the modern market.
The main focus of Kelvin Burns is on modern market practices and how to utilise them to develop your business best. There is nothing he likes more than helping small companies make their way against fierce competition and overcome the odds towards higher development. And how he helps them is by writing helpful articles on business practices and company development.