Last week, we hosted The Returns Battlefield event in London, a glitzy affair that explored the growing issue of returns. We were joined by a host of brands looking to overcome their own challenges with the ‘returns phenomenon’.
Also in attendance were some fantastic speakers from Oliver Sweeney, a designer of luxury shoes, boots, and clothing, as well as In the Style, a brand that offers trend-led fashion at reasonable prices. The speakers regaled the audience with strategies, real-life examples, and anecdotes on how to successfully traverse the returns battlefield.
In addition, we also gave those in attendance a sneak peak of our most recent special report, ‘Banned: A Returning Problem’, which reveals why shoppers who regularly return items may soon be in for a rude awakening. The report is now live on our website, so if you want to find out if retailers and shoppers support bans for ‘problem returners’, download it now.
And, don’t worry about those FOMO feelings. For those who couldn’t make our event, we’ve been kind enough to recap for you some of the key insights from the evening’s speakers below…
Chloe Thomas, journalist and the host of the Ecommerce MasterPlan Podcast:
- “The average return is ‘touched’ seven times when being processed,” says Chloe and less than half of retailers admit to not having technology in place to process returns. (Source: The Returns Tsunami Report)
- Returns cost retailers £60bn a year, £20bn of which is from online sales. In Chloe’s view, retailers have to get a hold on this, as the costs are damaging already tight margins. She says: “Retailers need to be automating their returns as much as possible; by streamlining how returns are managed at the back-end, it allows for a renewed focus on growth – which is exactly where most retailers want to put their effort.”
- For Chloe, technology and data are essential tools in a retailer’s armory. In her words: “You have to have systems in place that tell you what’s happening with returns. You don’t need to necessarily ban problem returners, but it’s essential to have data in place that tells you who they are. With that visibility, you can then, for example, choose to not send these customers marketing messages or offers around Black Friday, or other sales messages. That could really impact your business.”
Chris Webster, MD, Oliver Sweeney:
- “Most retailers are keenly aware that delivery and returns form the core ecommerce proposition, but thought-through returns strategies are less commonplace,” says Chris. “But with the cost of returns becoming an ever bigger line-item on the balance sheet, it’s an area that must be addressed – that was certainly the case for us.” Free returns should not be missed though adds Chris: “With free returns being the base expectation for most shoppers, the question is, how do you then recoup those costs?”
- Chris has a few suggestions for retailers: “Fit is key, so I would suggest working with suppliers to ensure consistency in measurements and then communicate that clearly and transparently to your customers. In addition, it’s important to be able to identify those customers with different shopping habits, including, but not limited to, intentional returners. For example, if you have a repeat buyer who always orders a shoe in size six and then they suddenly order one in a seven, it’s important to be able to flag that as a potential return. Having the right systems in place is key.”
- Oliver Sweeney goes further than just identifying ‘potential returners’, they also engage with those shoppers, as Chris explains: “We’ll contact a customer, for example, that shopper who ordered a shoe in size seven rather than their normal size, just to double check they’ve picked the right size. We find that customers really appreciate this personal touch, and it does help to mitigate returns.”
- And, what about serial returners? “Online makes up almost half of our business, and our serial returners equate to between 50-70% of all returns, so we’re making a loss serving them,” explains Chris. However, Oliver Sweeney wouldn’t endorse banning this group: “That’s not the right approach for us, but we do utilize identification to ensure that we aren’t actively promoting to these groups.”
- However, regardless of your approach, there will always be returns explains Chris: “We’re never going to be able to eliminate returns completely, so it’s important to have an operating model in place that allows for an accelerated returns process. Ideally, retailers need to be set up to both receive unwanted items back into stock and then get them back into the rotation as quickly as possible. In this environment, we can’t be laissez-faire towards returns – we must be proactive and pragmatic.”
Jon Cleaver, CTO, In The Style:
- In The Style has an influencer-driven approach, which can result in sales spikes, but also a higher return rate. As John explains: “Our return rate is around 30% and 6% of all returns we have to write-off. We’ve also recently introduced a Try-Before-You-Buy (TBYB) model which has produced a 25% increase in orders, but also, a similar percentage of items being returned back to us.”
- John explains how the business manages returns: “We work with our suppliers to better understand failure demand – and we relentlessly quality check our items. For returns, it’s essential to collect and understand the reasons why customers are returning items; with that knowledge, it’s easier to tackle problems head-on, whether it’s an issue with a particular range, measurements or how clear your returns policy is.”
- John is adamant that returns are an issue that must be addressed: “We’re actively looking for ways to both reduce our return costs and speed up how we process returns. With returns often being double our delivery cost, it’s an area of the business that needs attention – I believe that’s probably true now for most ecommerce brands.”
For more expert insights about chronic returners, take a look at our latest report: Banned: A Returning Problem. And don’t forget to keep an eye on the blog as we’ll also be sharing some more insights on this over the coming months too.