Returns are a fundamental part of the customer experience. Do them well

“What do my customers really want?” The savviest retailers are asking this question every day, and rightly so.

It’s important to recognise that the rise of digital has completely transformed customer expectations and behaviour.

Now, a positive customer experience doesn’t begin with browsing and end at the point of purchase. Instead, retailers must leave a lasting impression on customers at every stage of the shopping journey. A few years ago, free returns were more of a ‘nice to have’ than a necessity, but today shoppers expect free and easy returns, and they’re happy to abandon stores that don’t cater.

This was reflected in our 2019 research into the attitudes of 2,000 UK consumers towards returns, which revealed that over two-thirds consider them an essential factor in their choice of retailer. And while we know that returns can be tricky, a further 78% said that if a retailer offers free returns they’ll buy more with them over time; highlighting a clear opportunity for savvy retailers. Instead of viewing returns negatively, retailers should use them to drive loyalty, boost revenue and increase customer lifetime value — propelling them ahead in the battle for the consumer.

So how can retailers ensure they’re giving their customers exactly what they want?

Experience is the new loyalty

The online channel is a lucrative opportunity for retailers. Many brands are already benefiting from reduced overhead costs and the ability to reach a wider customer base. But while there’s been a dramatic improvement in the browsing element of user experience, pitfalls still come near the end of the journey. With so much of the battle for the consumer being fought online, every stage of the online shopping journey must be built with the customer in mind.

Retailers would do well to remember that post-purchase customer service has, and always will be, a crucial component of the total experience. Another valuable touchpoint, the way stores handle returns could make or break a customer’s decision to shop again. For retailers, the inconvenience of returns will never disappear but embracing, rather than fearing them, could revolutionise that customer’s experience. Much in the same way that flexibility is key in delivery options, any returns experience must meet consumer expectations by being convenient and straightforward. After all, some of the best customers can have high returns rates but still be profitable overall in total lifetime value.

Take a preventative approach

On the flip-side, it’s easy to see why many retailers take a cautionary approach to returns. The process can be expensive and time-consuming, particularly for smaller retailers with fewer resources at their disposal. One way to mitigate issues around returns is to simply take steps to reduce the number of returns being made in the first place. This means taking a deeper look at your website to ensure as much accurate information as possible is available about a product, to help inform customers before they commit to purchase and delivery.

While it may be tempting to embellish a product description to achieve more sales, these undoubtedly lead to increased returns. Similarly, pictures that make an item look larger, more colourful or better-finished are also likely to result in returned items. As shoppers grow less tolerant, retailers must employ new methods to ensure they understand their consumers — and are committed to making their lives easier.

Invest in tech to streamline the entire commerce journey

It’s a significant oversight for retailers who don’t investigate what tech is out there to make their lives, and their customers’ lives, easier. And it doesn’t always have to be ‘the next big thing’ when introducing technology. Sometimes the most practical solutions can be the most effective.

Almost a third (31%) of shoppers said that they would be more likely to buy something online if they had the opportunity to pay for it after trying it at home.Flexible payment options like Klarna’s Pay later can be a significant competitive differentiator by allowing shoppers to see, touch and try their items before having to part with any hard-earned money — turning their sitting room into a fitting room. This reassures them they’re getting exactly what they want, while also removing any anxiety shoppers may feel at the point of purchase.

Offering choice at the checkout also plays a part in building total lifetime value. 26% of respondents say paying after delivery would make them trust a retailer more and 63% reveal it would encourage them to keep more items — helping build a relationship with customers and secure long-term loyalty.

What it boils down to, is this: optimising the experience needs to be embedded into every single interaction a customer has with a business. Improving returns is an opportunity to further streamline the shopping journey, and with our research revealing that the volume of online returns has climbed 14% since 2017, it’s clear that returns aren’t going anywhere. Retailers that offer shoppers a fantastic purchase journey from start to finish are the ones that will come out ahead.

Luke Griffiths

Luke Griffiths is General Manager at Klarna UK.