The mounting trend in Ecommerce of apparel returns by consumers is like an outbreak of a disease. It scares clothing retailers as they hurt profit margins.
Worse, costly returns and inventory losses — after thinking you’ve made a sale and restocking expenses — pose a threat to your online retail business.
Here’s a shocker with which you’re probably familiar: The trend exacerbates your cost drivers as a result of shopper returns – especially, you know that many consumers amount to an oxymoron – they’re not consumers, at all.
Why? They purchase products with a plan to immediately return the products.
This is so costly for retailers: In anticipating growth, retailers have hired employees, expanded warehouses and planned reverse logistics.
But consumers expect free return policies and exchanges without restocking fees. This amounts to a major headache for retailers.
Returns can be profitable
Some companies have learned that liberal return policies can drive profits. That’s true for consumers who place a premium on their customer experience with high-end products.
Ultimately, they tend to buy more products.
To succeed with a liberal return policy, companies can succeed by providing a unique customer experience. That’s from stellar branding for perceived value, product differentiation, higher price points and convenience to offset return rates.
The latter, convenience with effective communication, are key to prevent anxiety in the purchase process.
Customers don’t like to feel like they’re in the dark after making a purchase about their exchange or refund.
Know your customer – price elasticity
Data is your biggest ally. For your least and most-profitable customers, create return profiles. Synchronize your net sales with return rates.
Consider the correlation of a product’s price, value and returns.
In other words, many customers are more likely to buy the least-expensive products. But they most-often return the low-quality products.
So, it might be in your best interest to sell only top-shelf products and drop the price enough to entice shoppers but still make a profit, in part, because your returns will decrease significantly.
Not to over-simplify, the price elasticity of demand measures consumer response to a change in price.
Identify habitual-return buyers
There’s an old adage, “A sale ain’t a sale until the money’s in the till.” I would add the money needs to stay in the money drawer to consider it a sale.
Basically, there are two kinds of serial returners:
- People who buy clothing just to wear once without any inclination to keep the items.
- People who buy different colors and sizes of the same product so they can pick what they like but they return the other items.
Obviously, it’s important to understand what types of shoppers you have and monitor them closely. It’s also recommended that you implement thresholds for refunds and the number of returns.
In order to accomplish this, here are suggestions:
- Identify and differentiate your customers
- Monitor those purchasers
- Exclude them from added value such as full-refund offers and free shipping
- At checkout, withdraw the free shipping option
It’s time-consuming and costly for many retailers to efficiently cope with massive return rates.
So, the key is to establish effective procedures:
- Clearly publish your return policy upfront.
- Research and learn which apps can help you manage returns.
- Consider outsourcing your returns processes.
- Consider an outsource vendor that allows in-person returns.
- Make certain you consider the needs of your company and those of consumers.
Know what trigger returns
A look at online reviews, typically show the four triggers of product returns: Appearance, quality, fit and customer experience.
You have to make certain the delivered products are the same as pictured online in color, stitching and material.
Product quality should be the same or better as described, and fit well.
Your customer expects to be pleased with the purchase and shipping processes.
Checklist to keep shoppers happy
Here are solutions to help prevent returns:
- Use exemplary images and videos.
- Provide exacting benefits and descriptions. Explain why your products are superior and anticipate shoppers’ “WIIFM” questions (what’s in it for me?).
- Specialize in selling apparel with stretchable fabric. The more the clothing stretches, the more likely the sizes will fit which will minimize the odds of returns.
- Be careful with sizing by being very detailed in every possible aspect to decrease customer-service questions and returns.
- Make sure you specify the quality of products such as good, great or premium but keep faith with your statements. (But as indicated previously, don’t sell low-quality merchandise.)
- Before shipping: Double-check each product – including seams, threads and zippers.
- Make it convenient and pleasant for shoppers in answer questions. If not in real-time, respond in minutes in a personable fashion.
- Impress your shoppers on delivery by packaging goods like they’re presents. With gift-wrapped deliveries, you’re more likely to avert returns.
- Include added-value: a bonus with all purchases – from either a bangle bracelet to bar or package of scented soap. Be sure to gift-wrap the added-value items.
Good luck with these eCommerce prescriptions for the disease of high clothing returns!
From the Coach’s Corner, more information for retailers:
Marketing Psychology: Choose the Best Colors for Online Sales – Here are color tips to improve visitor experience and to capture customers – including a great infographic on 40 facts about the psychology of colors.
Psychological Pricing Tips to Sell More Products, Services – Depending on your products or services, psychological pricing is based on the idea that certain prices are more appealing. Here are six options.
Ecommerce – How to Improve Conversion of Mobile Shoppers – To convert your mobile visitors to customers, you must understand their mindsets. You see, mobile shoppers have different goals and obstacles than desktop users.
Key Strategies for Best Holiday Sales on Amazon – For top holiday sales on Amazon, due diligence is imperative to maximize your sales while also positioning your business for success in the future. Here are the key strategies.
10 Leading Principles for Your Supply Chain Success – Explosives disruptions from weather, commodity shortages, price volatility, and shifts in buying behavior are examples in the challenges of supply chains in the pursuit of profit. Here’s what to do.
“The reason it seems that price is all your customers care about is that you haven’t given them anything else to care about.”