Record numbers of goods were returned by customers after this year’s Black Friday. In fact, the total number of returns for November 2021 in its entirety were already hit by Black Friday 2022.
The spike has no doubt been influenced by the huge shift to online shopping, fuelled by high rates of physical store closures in the last two years. However, it’s not down to this alone, there are a number of other factors driving the trend.
Cost of living crisis bites
Even before inflation hit a 40-year high this September, a number of high profile ecommerce marketplaces including ASOS and Next, warned that 2022 profits were set to slump. The spike in returns were blamed on buyer remorse in the face of uncertain economic times. And with inflation not set to drop until mid 2023, this trend looks set for the long term, as customers search for ways to combat ever-rising costs.
The ‘lipstick effect’
As per the last economic downturn, we’ve seen the emergence of the ‘lipstick effect’ with customers turning to small luxuries amidst the cost of living crisis. This ‘less is more’ trend, with the shift towards cherry picking one standout item, has been mirrored in the returns process. This year’s Black Friday saw a significant 8% jump in UK returns compared to last year, with shoppers buying multiple items but then taking their time to select the goods they’ll return, and selecting one or two favourite items to keep. There’s been a significant rise in the purchase of mood boosting items such as false nails, lipsticks, chocolate and coffee – small luxuries that can have the power to get you through the day when times are tough.
Wardrobing at home
Increased closures of physical stores in recent years have had a huge impact on the way customers shop for clothes. With reduced opportunities to try on clothes in-store, the home has become the fitting room; shoppers are buying multiple items to try on at home, with bulk returns for unwanted or unsuitable items. ‘Try before you buy’ has been a real success strategy for many retailers. For some brands, try-on customers typically have an average order value that’s three times higher than customers who don’t participate in a try-on experience.
Three top tips for cracking the returns process
Simplify the process
It’s all about simplifying the process and turning any negatives into positives with outstanding communication and execution. Not only do customers rate value but they’re also after a smooth experience and open communication and efficient and clear steps in the process are key. NetSuite’s return material authorisation feature is integrated into the customer support area, allowing retailers to easily track recurring issues over time and provide insights through dashboard analytics. This means customers can be kept up-to-date at every stage of the process, even if there’s a delay. Customers want transparency – even if there’s a slight hiccup.
Third party couriers
The current economic situation has put a huge strain on public services, meaning postal strikes beyond the planned Christmas action are likely. Retailers should therefore avoid solely relying on Royal mail, not only over the Christmas period, but in the months to come. The likes of Currys have recently dropped Royal Mail in the face of strike action, and we’ve seen more and more businesses switching to and choosing third-party couriers for the cost-effective and more reliable service they offer.
Match return channels to preferred buying channels
Tracking customers’ purchasing preferences though data collection is key to understanding what type of returns process would work for them. Returns policies will obviously vary across different retail sectors and product types, but the common denominator of a winning returns policy will be watertight enough to prevent abuse, but flexible enough to make the process as smooth and seamless as possible for customers.
To conclude
In the midst of economic struggles and continuing disruption from strains to public services, hassle-free returns are more important to customers than ever. And with some predicting the effects of the cost of living crisis are set to last as long as ten years, this isn’t going to change any time soon. A stress-free, cost effective returns strategy is vital for keeping customers happy and maintaining a competitive advantage during these uncertain times.
By Ian Moore, founder of Excellent Zephyr
