There’s a seismic mind shift by brands and retailers when it comes to the increasing burden of returns which is highlighted even further with environmental spotlights such as June’s World Environment Day. Where returns were once accepted as a necessary evil of eCommerce, retailers are now more conscious than ever of their financial and environmental impact and are looking for solutions.
But why the shift and how can implementing a social proof messaging strategy help to drive up conversion rates and reverse the upward trend in returns?
The shift in sentiment around returns is two-fold. It’s fuelled by a greater awareness of the environmental impact of returns for both retailers and consumers, the former having sustainability targets to hit and the latter developing more of an environmental conscience.
And, for retailers at least, it’s also coupled with the sheer cost of dealing with returns which can hit margins hard. The cost of factors from transportation to markdowns as well as reprocessing or repackaging, can mean that a return can cost two-thirds of the price of the item.
The scale of the challenge of returns is particularly evident in fashion, where the need for customers to be able to check that something fits or suits means higher returns than in other product sectors – and that can lead to waste simply because disposing of items can be cheaper than trying to resell them.
The US saw an estimated US$212 billion of online returns in 2022, of which about 10.7% were considered fraudulent, and clothing the most returned online purchase in the US.
The challenge of returns is further exacerbated by the cost-of-living crisis, which means that when customers do buy, they are being more stringent about whether to keep a product or not. The problem is particularly evident in fast fashion, where customers know they are more likely to have to return products and bear the cost.
Companies including TJ Maxx, Best Buy, Kohl’s and Urban Outfitters are all now charging for mailed returns. The strategy is designed to redirect consumers to stores instead, where returns remain free and retailers can consolidate or redistribute items for sale more easily.
Directing to store is also a great opportunity to recapture the sale, allowing store staff to offer alternatives to the returned product. Given that 75% of customers that use BOPIS (buy online pick-up in-store) go on to buy something additional in-store, it’s safe to assume similar potential when returning in-store.
But minimizing the impact of returns means reducing the potential for returns in the first place. And that means the customer buying right first time. There are many different technologies and tools that retailers can implement to enable this. In fashion, for example, fit and sizing tools can help customers better assess how something will fit before they buy.
But customers also react well to knowing what their peers are buying – which is where social proof messaging can help. It does this through messages presented during different stages of the sales funnel, which show what other customers are buying or browsing by highlighting popular, trending items and bestsellers. Based on the real-time, accurate data of retailers, social proof messaging harnesses this power of the crowd to help increase customer confidence that they are making the right buying decision increasing conversion rates.
Coupled with review data, social proof messaging increase confidence further. In fashion that might be a more assured fit and so can help with the challenge of bracketing for clothing retailers – when customers buy a selection of sizes/ lengths or cuts of the same style to try on.
It’s a tactic already used by fashion retailer FatFace, which can help to reduce returns because customers can get a clearer idea of how other customers have rated the fit of that particular garment. For example, it might show a message that says “Top Pick! 98% of people rated 5 star”. Integrating product reviews within social proof messaging can also help customers assess the quality of a garment which can also increase confidence to buy and reduce the likelihood of returns.
The returns challenge won’t go away. Retailers need to offer customers the ability to change their minds on goods, but with changing sentiments and the very real drivers of sustainability and cost returns need to be handled better – and one of the best ways of doing that is by reducing their likelihood in the first place.
