Proactively facing up to the returns headache

Brought to you by Retail Insider and K3

Retailers who do not offer their customers a free and easy returns process are likely to lose sales and customer loyalty, according to myriad pieces of research, which rather states the obvious.

Research from payments company Klarna found 75% of customers say easy returns are an essential factor in their choice of retailer, 78% say free returns mean they would buy more with a retailer over time, and 86% say the option of free returns will make them more loyal and more likely to keep coming back to a brand.

But at what cost to the retailer? Such are the levels of returns at clothing retailers – particularly at the fast fashion end of the market – that solutions are being sought to mitigate this margin-killer within their businesses.

In what can possibly be seen as a watershed moment for the industry Asos made a public statement that it was on the warpath to track down those customers who perennially order goods but never make a purchase.

It is on the lookout for – and I suspect it won’t be too difficult to find – unusual patterns of returns activity. This includes those people who actually wear the item before returning it as well as those serial returners who simply send back mountains of goods. The culprits will find their Asos accounts deactivated.

This is one proactive – stick-type approach – to the situation and it is likely to lead to others following suit (if they are not already doing it behind the scenes on the quiet). Around the world there are other initiatives being adopted by retailers who are working more on the carrot-type approach. In the US, Walmart-owned Jet.com has been offering discounts on orders when customers opt-out of the free return option.

This route to reducing returns has also just been introduced by India-based Myntra that offers customers at the checkout the option for their order to be non-returnable, which then gives them the item at a reduced cost. It calculates the discount on a product-by-product basis.

It is absolutely the case that more such initiatives will be introduced as the retail industry works towards a situation that is profitable for themselves and flexible and convenient for the customer.

Glynn Davis, editor of Retail Insider