Consumer behavior and happy returns

As shoppers flock to online retailers in greater numbers, one of the key aspects of the shopping experience that’s missing is the change room.  Shoppers no longer have the luxury of trying on before buying and this is forcing retailers to offer more flexible, and forgiving return policies (both for online and brick-and-mortar stores). Think of it like this: you’ve got your mind on a new running jacket and head to your favorite online retailer to browse the selection. Several options come up that look right, so you add them to your cart, check the return policy, and hit the Buy Button. When that much-anticipated parcel is delivered, you head to your bedroom “change room”, find the perfect fit, and perhaps take it out for a test run. Satisfied with your purchase, you send the rest back.

This type of behavior is forcing brands to refine their return policies and make it easier than ever to return products. As most companies are defaulting to generous return policies, and free shipping and returns, consumers are buying more and more online. In the first half of 2020 e-commerce sales increased 30% year over year from 2019—generating more returns as a result. Online and specialty retail consumers are basing their decision to buy on the ease of return policies. For example, return rates in brick-and-mortar stores averages around 8%, for online orders that average jumps to 25%.
This brings us to why consumers are making returns in the first place. Are customers unhappy with the products they are purchasing? 80% are returning product due to it arriving damaged, 64% say the item purchased does not match the description of the product, and 30% are saying they are making purchases with the intent to return, both online and at brick and mortar locations.
Product returns do not always have to have a negative connotation. Too often, the phrase “I need to return this” brings thoughts of a bad purchasing experience. No one wants to have their shopping experience associated with the word “sad”. Sad it didn’t fit, sad the product didn’t match the website description or image, sad the product had to be returned.
On average, 4% of current Channel Signal consumer reviews mention product returns. Data suggests that sentiment around a brand drops about 62% when people are talking about returns in their reviews. However, reviews that mention returns can have very little to do with the product itself, and much more to do with return policies, customer service and the overall ease of the return process.
With retail spending increasing (sales jumped 5.3% in the month of January), consumers will focus on the return policy even when deciding on their purchase. Around 68% of shoppers view a return policy before making a purchase. 50% of shoppers abandon their purchase due to a lack of return choices. Positive reviews that mention returns are mostly based off of that return policy and the ease of returning product. Consumers trust other consumers making product reviews extremely relevant to the buying process.
Consumers are drawn to experiences that promote ease of use. This is especially true when it comes to return policies. The more a brand or retailer addresses not only their return policy, but the return process as well, the better. An easy, clear return policy can create long term brand champions.