Sashank RavindranathNot all e-commerce orders are successful with the delivery being made. Some products have issues that are revealed only when the package is opened, some customers often end up becoming unhappy with the product or delivery, etc.
Mind you, these are not isolated incidents, 30% of all e-commerce orders are returned by consumers (2x -3x more than brick-and-mortar rates).
Product returns are an inevitable and frequent part of e-commerce. But not all merchants see them the same way. Some merchants feel returns as a cost-center, a logistical nightmare, and detrimental to shopper experience and customer loyalty.
However, the truth is far. Easier said than done, but when handled correctly, returns offer great scope to improve the overall CX and increase repeat purchase rates. One of the best and simplest ways to optimize your return experience is to understand why things happen the way they do. In short, gain returns intelligence around your product returns.
What is Return Intelligence?
Product returns intelligence refers to the systematic analysis and utilization of data related to product returns to gain insights that can improve business operations, customer satisfaction, and profitability.
To give you better context, product returns intelligence is nothing but tracking returns for an extended period and understanding the reasons behind customer returns, the patterns and trends in return behavior, and the impact of returns on the e-commerce business.
On the surface level, tracking returns inside out is the way to gain product returns intelligence, but when you go in-depth, the question of “what exactly are you looking for?” comes into the picture.
This is where specific valuable return metrics or return KPIs (Key Performance Indicators) like return rate, reason for return, frequently returned products, etc, come in to help you measure the success of your e-commerce business’s returns experience.
Just tracking these KPIs would let you know whether your strategies have been successful, in terms of both competitive advantage and profitability.
The Importance of Product Returns Intelligence For Your E-commerce Business
Gaining intelligence around product returns is one half of that, the other and the most important half involves leveraging insights from the findings to streamline operations, optimize customer experience, and reduce costs.
Here are some key things that your business can achieve by employing intelligence in your returns strategy.
Although returns are not a cost-center as many believe, returns are expensive. In fact, US retailers spend over $100 billion each year on return-related logistics.
While these costs come from very valid reasons such as inventory, processing, and damaged products, returns intelligence can come in handy here to identify the root causes of returns.
With the most common reasons for returns identified, you can make your returns processing more efficient and thereby reduce labor and operational costs. Example: If the reason for return is said to be poor product quality, you can negotiate with suppliers to improve product designs or even discontinue problematic items.
Also, returns intelligence helps businesses better understand which products are returned frequently and why. This can guide better-informed decisions regarding inventory levels, reducing the costs associated with manufacturing and overstocking.
Reduce unwanted returns
Returns are a major issue in the apparel industry and 70% of these returns are considered size and fit-related.
Returns intelligence can help you understand why customers return their products and if they’re because of reasons such as wrong size, product not living up to expectations, etc — they don’t have to be reasons to initiate a return anymore.
With mismatches between product descriptions and customer expectations highlighted, you can take actions to fix them such as offering better product descriptions and sizing guides, etc, you can improve accuracy and clarity in product listings, and significantly reduce return rates.
Optimizing Customer Experience (CX)
A smooth returns process is crucial for customer satisfaction.
One key to a smooth returns process is collecting customer feedback on their returns experiences with your brand. Returns data provides direct feedback from customers about what works and what doesn’t. By addressing their concerns at the source, you can make returns easier and turn a potentially negative experience into a positive one.
For instance, return methods. If more customers are picking exchanges and store credits over refunds, it means they’re willing to give you an additional chance to set things right. For these customers, you can come up with more personalized marketing strategies, such as offers and products better suited to their needs.
Returns feedback can also suggest whether your post-purchase customer support can be improved. Here, you can make efforts such as providing clear return instructions and keeping customers updated on the status of their return to enhance their return journey.
How Lateshipment.com Can Help You Gain Intelligence Around Product Returns
Returns intelligence is a powerful tool that can help businesses save money, improve customer satisfaction, and gain a competitive edge.
By investing in a system that helps you gather and analyze returns data, businesses can achieve greater operational efficiency, and enhance customer satisfaction, all of which contribute to a stronger, more resilient business model.
Meet LateShipment.com’s Returns Experience Management platform with the Returns Analytics Dashboard, a.k.a the solution.
The Returns Analytics Dashboard breaks down returns into simple, actionable metrics that you can keep track of, see if these return-related metrics work in your favor, and ultimately spell out the success of your e-commerce business via better business strategies.
Apart from specific return-related metrics, Returns Experience Management also helps you make returns easy and profitable by increasing important CX metrics:
- Conversion rate by extending a frictionless returns experience
- Repeat purchases with easy returns and status tracking
- Revenue retained with flexible return methods (seamless exchanges and store credit options).
Also, you can considerably reduce the time spent per return by making returns status tracking self-service.
