Growing retail return rates are challenging to control, manage, and process – but they can also be an opportunity for retailers to gain a competitive advantage. By aligning with customer expectations and minimizing adverse impacts to business outcomes, a well-vetted, properly designed return strategy lets digital business leaders enhance their brand’s reputation, support the company’s transformational initiatives, win new customers, and achieve greater customer lifetime value (CLV).
According to Forrester’s Retail Benchmark Recontact Survey, 2022, US consumers prefer to return items through various channels, including physical stores (63%), websites (36%), apps (17%), and customer service phone lines (10%). Retailers must tailor their returns strategy to provide more options and to maximize customer satisfaction – while also finding operational efficiencies to maintain profitability. Moreover, return policies play a pivotal role in winning today’s brand-agnostic shoppers. Fully 55% of US online adults consider the ability to buy online and return items in-store a significant factor in choosing a retailer.
Comprehensive return strategies are more than policies and processes
An effective returns programs involves navigating several operational complexities and practical limitations of impactful variables, including:
- Cost and convenience. “No-cost” returns significantly influence customers’ choice of retailer. Retailers need to analyze the impact to their bottom line of offering free return shipping and no restocking fees. These returns practices help develop customer loyalty and avoid driving them to competitors.
- Customer psychology. Some customers expect 30-day return policies, but some studies have shown that longer, more lenient return policies increase purchasing tendencies without increasing return rates. Retailers should conduct in-depth research on their customers’ behaviors and preferences to determine the right offering for them.
- Alignment with the company’s goals and objectives. Retailers can create a win-win situation where both customers and businesses benefit by embracing returns as a way to engage with customers, enhance personalization, and hit sustainability targets. With a customer-first mindset and strategic approach, retail returns can become a competitive advantage that drives brand loyalty and long-term success.
To better understand trends in returns and how your company can align your return strategy to maximize business outcomes, read our new research and connect with me via inquiry or a guidance session.