Although e-commerce can be a great thing for consumers and businesses, there are some downsides. The volume of sales, and the ability to provide personalization The online shopping experience has been revolutionized by the sheer volume of purchases. The way that consumers shop today has increased the logistical burden and costs on businesses.
The main issue is returns.
Customers will purchase products that they are only mildly interested, then try them on, or return the items they do not want. The experience is seamless for the consumer as shipping fees are typically included in their order. However, these logistical fees end up being taken out of the retailer’s bottom line.
This can quickly add up, and retailers will often change store policies to discourage return. These changes are important, but a certain category of returns is caused by a retailer’s site. This can lead to unhappy consumers and damage the brand’s credibility and loyalty over time. Brands can reduce the number of returns caused by incorrect product information if they fix errors on product pages.
Returns: The Real Impact
The cost of returning products is difficult to comprehend as a customer. If a company offers a return policy that is intuitive, we assume the costs are already included in the product price. Businesses, on the other hand, face significant revenue disruptions due to the costs associated with processing, warehousing and return fraud. They also have to pay for return shipping, non-saleable inventory, labor, and return shipping.
One could say that study showed that of the $1.29 trillion in online retail sales in 2022, consumers returned $212 billion worth of goods — that’s a 16.4% rate. Although the return rate is down from 2021’s highest rate of 20%, the jump from 2020’s 10.6% rate to these numbers is significant.
The 16.4% rate of return is also a mere average. Clothing retailers have return rates of up to 40%. If, for example, it costs a company $25 to process a return, the cost of returns over the course of a year could eclipse $1 million for a company processing just 40,000 returns — an easy figure to hit if a company is completing 200,000 transactions with a 20% return rate.
But brands must be careful when implementing such policies.
Recent Studies Have Affected the Availability of Many Different Types of consumer survey The study found that 63% customers are negatively affected by a brand’s decision to charge for returns, whether online or at the store. While these policies might help the bottom-line in the short-term, they can cause issues for repeat customers and loyalty efforts.
Balance Costs and Customer Expectations
Returns can be made for a variety of reasons. Customers may purchase products to test them or to try them, they may receive unwanted gifts that they want to return, among other scenarios.
The retailer has no control over many of these return reasons. It doesn’t mean it is any cheaper. If the company has a flexible return policy within a certain timeframe, sellers can expect their customers to use it.
It’s important to deal with customers who are seeking returns, and then claiming that the retailer was at fault. Some estimates say that retailer errors are responsible for two-thirds or more of all return requests.
These errors range from the customer receiving the wrong item (23%) through to an inaccurate product description (22%) and damaged merchandise (20%). A further 54% of customers returned a product due to inaccurate or misleading information on the retailer’s website.
The number of returns which could have been prevented is staggering. This problem has an impact on long-term customer loyalty. Customers are unlikely to return to a retailer if they can’t be sure that the product they buy will look the same as they saw online.
Smart Retailers invest in Product Information Systems
Every retailer’s goal should be to minimize returns, which stem from their systems and channels. It all begins with the product page.
Brands can be assured that their product information (PIM) management and product experience (PXM), systems are up-to-date and accurate without having to sacrifice any of the persuasive sales copy needed to convert.
These systems are not only useful for companies with a large number of products, but also for those with 1,000. PIM/PXM systems use automation to allow bulk editing, sorting and grouping of products, as well as other time-consuming, error prone tasks that are done manually.
Finaly, a PIM or PXM well-executed system can provide an important validation mode. It will automatically scan and cross-reference product specifications and descriptions with an internal source of fact that flags discrepancies.
Having that extra set of eyes on a group of product pages can give retailers confidence that each page matches manufacturer-supplied documentation to the best of its ability.
Product Information Systems Reduce Returns and Strengthen Trust
Product information systems have many benefits. The benefits of these systems are significant. Not only were some retailers able to lower their return rates, but the fact that they automate basic information on product pages allows marketing and product departments to focus more on what is best for them: selling a product through rich, compelling content.
When retailers are looking to revamp their return policy, they should do everything they can to lower the rate of returns for reasons they control. The first step is to identify the root causes of return and then implement systems which ensure accurate product data. These actions can reduce the return rate significantly, thus preserving brand trust and maintaining credibility.
Modern retail faces many challenges. This is especially true when it concerns managing returns. These challenges present the opportunity for innovation and improvement. Investing in product information systems is not only smart — it’s essential for any retailer aiming to minimize costly returns and build lasting trust with consumers.
