think tank apparel returns


Within the online retail industry, apparel has a notoriously high return rate. In my research, I’ve found that 22 percent of apparel sales get returned on average — a figure which would be even higher if not for men’s apparel which gets returned at a significantly lower rate. The devil is in the details, though, and those can be horrifying.

I once worked in the luxury department store world, and it was common to see up to 80 percent of the items from some brands returned. While apparel retailers have improved significantly in the last decade, particularly focusing on fixing photography, product information (especially sizing and fabric) and quality control around shipments (uh, no more sending two left shoes), returns continue to be a significant thorn in the side of apparel executives.

The trick to improving the customer experience and reducing returns though may be more straightforward than merchants realize.

A few months ago, Amit Sharma — the chief executive officer of Narvar, a SaaS company started by this former Wal-Mart and Apple executive that specializes in the post-purchase experience for retailers — mentioned to me his company was embarking on a shopper survey around returns. I jumped on the opportunity to collaborate because over the years, I’ve found that while nearly every retailer focused on the customer experience, it is often to address the front part of the shopping journey: personalization, social marketing, product customization.

Baffling that so little effort was dedicated to the post-transaction experience. In fact, only 15 percent of retailers said that fulfillment areas were a priority for 2017, and a measly 4 percent said they were focusing on any customer service issues, according to the State of Retailing Online 2017 report from Shop.org and Forrester Research. This in spite of the fact that for online retailers, the single biggest moment of truth and the moment that ranks above all others in its ability to surprise and delight customers — or, in contrast, to disappoint and frustrate them — is, singlehandedly, the “out-of-the-box” experience. 

The good news for apparel merchants is that there are five easy areas they can consider to improve the online returns experience:

Product descriptions need quality checks. Retailers have invested a tremendous amount in content, including rich imagery, zoom functionality and color swatching over the years. Returns are heavily tied to consumers disliking the colors or sizes they receive. In fact, 70 percent of apparel returners said the size or color was wrong, and that was the top reason for returning an apparel item. Not surprisingly, 48 percent of apparel returners said they “bracket” their purchases (i.e. purchase multiple stockkeeping units to see which one fits best, expecting to return some items). Yes, even in spite of the proliferation of fit tools in the apparel industry now.

Be like Nordstrom because it sets the bar. When we asked apparel shoppers what is essential in a return policy (57 percent by the way say they always check the return policy of a retailer), they said that a “no questions asked” return policy is essential. (Remember the tale of Nordstrom accepting returned tires they didn’t sell?) In fact, 72 percent of apparel returners said a “no questions asked” policy is the most important thing a retailer can provide. Shoppers ranked it even higher than wanting merchants to pay for return shipping — though that was admittedly pretty high, too, at 63 percent.

There is an exception to the “no questions asked” rule, though. Retailers that don’t understand what happens after returns come back are missing a wealth of information. Twelve percent of apparel shoppers said they switched stores to find a similar item after their return. Ask these returners why. Savvy market research questions can help to improve a planner’s buys in the future, and can help marketers with ideas on “winning back” the shopper (e.g. price-matching or discounting to prevent a return, or e-mails about product deliveries that could be of interest to the customer). Retailers should see returns as permission to ask customers, “what can I improve?”

Transparency is table stakes when processing online returns. Nearly two-thirds of the apparel customers we surveyed — not surprisingly, many of whom purchased their items from Amazon — said they returned their item by mail. This means that there is a lag between the time when a shopper releases the item and when the item is processed in the retailer’s facility. Not surprisingly, this is a source of anxiety for customers: 29 percent of these apparel shoppers said they worried their return would be lost in the mail. One simple solution is to proactively inform customers either through text or e-mail of their return package status and as soon as the refund has been processed. Survey respondents who were happy with their apparel return said that was the top reason they were happy with the process. 

In-store returns could be even more popular. While omnichannel merchants are very versed in in-store returns, store returns for pure-play merchants is an untapped opportunity. Forty-six percent of apparel shoppers said it’s easier to return to a store, and 25 percent even said they would like to return packages to a nearby grocery or convenience store. This preference was even more pronounced with Millennial consumers under age 30: not only was this demographic the highest in believing that “returns are a hassle,” but 55 percent said they preferred in-store returns.

 Apparel retailers need to realize there is enormous value to creating a dead-simple, transparent returns process that keeps satisfied shoppers coming back to you. The apparel industry will never see a zero percent return rate, but it still has room to improve the impact of online returns significantly.

Sucharita Mulpuru is a retail industry analyst.

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