Managing the Impact of Returns with Personalized Retail Experiences
The COVID-19 pandemic created an unprecedented need for retailers to optimize their online retail experiences for their customers, as brick-and-mortar stores became off-limits. This resulted in retailers ensuring that they had reliable delivery networks to manage this increase in demand.
However, with more deliveries comes the need for more returns as people were forced to try on items at home, often buying multiple items in different sizes, or having to rely on what they could see onscreen to make their purchasing decisions. Between 2020 and 2021 retailers recorded a 39% increase in returns.
Based on this increase in returns, many retailers are starting to address “serial refunders” by no longer accepting free returns by mail. In fact, the fashion retailer Zara has implemented a new return policy where customers who want to make a return by mail will have to pay a fee of £1.95.
For retailers, returns are a costly part of any retail business. It is estimated that on average it costs the UK Retail industry £5.2 billion a year! But it isn’t just financial impact, there is also the environmental impact to consider as well. More returns mean that more vehicles are in the network and contributing to more waste and pollution. Optoro estimates that this accounts for 15 million tons of CO2 being released into the atmosphere.
Based on this, it is no surprise that we are seeing a trend toward returns charges being levied on customers. After all, the cost must be offset somewhere and serial refunders need to be given a reason to think twice about adopting this habit. However, customers are not fond of returns charges, with 81% feeling free returns should be a minimum standard of service, while 84% said that they would not use a retailer again if they felt they had had a poor returns experience.
How Can Personalization Help?
With all of this in mind, it is easy to see why getting the online retail experience right is so important, especially if you are considering introducing returns charges. Ensuring that customers not only find the experience easy and enjoyable but that they get what they want the first time. This is where good recommendations, personalized experiences, and the right messaging mixed with a bit of fun can all help. Imagine the benefits to your brand and what the impact could be on customer satisfaction by making your customers feel that they are at the center of their own custom retail experience.
Here are some of our favorite suggestions for managing the number of returns you’re experiencing:
1. Using a Recommendations Slot Personalized to the Behaviors of Your Customers
Many businesses are still giving valuable recommendation panel real estate over to a single non-personalized algorithm (like top-selling, newest, etc.). These algorithms can be powerful but try having one or two slots as personalized, based on the visitors’ brand or category affinity.
Personalized recommendations can not only lead to increased add-to-cart rates but will make customers feel they are receiving a more personal experience by showing them relevant items such as complete-the-look and other suggestions.
2. Using 1-to-1 Personalization to Engage at Scale
Ensure that customers are dealt with as individuals rather than as “segments.” Use a 1:1 customized experience to promote products or messaging that would be of interest to your customers. You can leverage the information that a personalization platform, like Monetate Personalization, has about customers just like them, using any relevant context available to automatically build an engaging customer interaction.
3. Remove Returns Policy Surprises
If you are looking to charge for returns, make sure that your customers are aware of this policy from the moment they start on their purchase journey.
Make use of messaging options such as Toaster Pop Downs, giving quick access to information if the customer wants it, or just-in-time lightboxes triggered to notify customers of their delivery options and potential charges before they get too far into the process.
4. Targeted Returns Policy Based on Geolocation
Use Geolocation to let customers know where their closest store is if you are looking to offer free returns in-store.
5. Highlight the Environmental Impact Behind Your Policies
Remind customers that charging for returns is not just a financial consideration. Messaging should also talk about the sustainability aspects of reducing returns.
6. Update Free Delivery Thresholds in Real Time
Providing free delivery over a certain spending threshold is a great way to improve AOV and reduce high delivery costs for small items. If you are offering free delivery or returns if they spend a certain amount, create messages and banners that show them how much they need to spend before they qualify – in real-time as they add products to their baskets.
7. Open Time Email Recommendations
While onsite personalization can engage with customers, it relies on them coming to the site in the first place. Using Open Time Email Recommendations, you can enrich your standard customer communications with personalized product suggestions to encourage higher click-through rates direct to your PDPs. Again, this makes customers feel they are at the center of their retail experience.
And finally, why not add elements that are a bit of fun? You are trying to keep them engaged with the site and the retail experience. Special offers are always well received, but you could also create a simple scratch card popup that makes revealing their offer even more exciting.
If you can keep the shopping experience engaging, informative, and easy, people will be more forgiving of inconveniences like returns charges. This not only helps you to manage costs but can result in increased customer satisfaction and brand loyalty.
Do you need help with your personalization strategy? Contact Monetate and learn more about what makes us the #1 personalization platform for eCommerce.
This blog is by Monetate’s Sr. Digital Experience Consultant, Andrzej Marczewski.