50% of UK shoppers show greater loyalty to retailers that provide free returns, according to the latest research by SAP Emarsys Customer Engagement. The research was conducted among more than 2,000 shoppers across the UK. It found 82% of UK consumers have stopped shopping with a retailer because of a paid returns policy being introduced. 44% actively avoid retailers that charge to return items.
SAP Emarsys data found the rate of returns continues to climb. The research indicated that 71% of shoppers returned items over the last 12 months.
However, not all these returns are genuine, with a quarter (25%) admitting to ‘wardrobing.’ A phenomenon where consumers buy items with the sole intention of returning them. A common example of ‘wardrobing’ is shoppers buying the same product in multiple sizes when unsure of the fit.
To address this, many retailers have started charging a returns fee. However, the SAP Emarsys research suggests this is causing shoppers to switch, with 47% being less loyal to brands that charge for returns.
• Additionally, 66% of respondents say they prefer not to return items.
• 56% want retailers to “get it right the first time.” This indicates more than half of UK consumers do not want to deal with returns.
The return of return fees
“With brands losing money from returns, it is understandable that retailers have added returns fees. However, it is imperative retailers don’t damage their customer experience in the process,” said Sara Richter, CMO at SAP Emarsys. “We need to fight the root cause of the problem, not just manage the symptoms. For me, that’s where personalisation comes in.”
“When retailers offer more targeted products based on customer data: returns behaviour and wish lists, the volume of returns drops. 58% of shoppers prefer brands that make personalised offers. We saw an increase in retailers embracing this approach during last year’s Black Friday weekend,” Richter added.
The research backs up this view, with consumers saying that retailers could reduce their rate of returns by offering a more personalised product selection. 26% of UK consumers hope to see more personalised recommendations and deals that make the online experience more like shopping in a store.
“Today’s consumers are looking for a more personal touch and want to know their voices are heard,” Richter said. “To deliver tailored experiences, retailers must make the most of tools like Customer Engagement Platforms, Customer Data Platforms and AI. Solutions that understand customers’ shopping habits and return patterns. If a customer buys 50 items, a retailer might assume they’re a big fan. However, if 49 of those items were returned, the story is different.”
Enterprise Times: What this means for businesses.
The issue of product returns impact every aspect of the retail operation. From the call centre, customer service team or sales associate having to deal with return enquiries. The warehouse that facilitates returns, logistics and operations. From engagement rates, to brand sentiment, to overall profit: and the challenge of product returns is only getting worse. As a result, businesses have to reduce the rate of product returns. Research from SAP Emarsys Customer Engagement examines the future of shopping and how retailers can limit returns without damaging loyalty. This remains a key challenge of retailers going into the new year.
