COMMENT How engaging visual can reduce returns – and how AI can help

As online retail continues to flourish, product returns have become a growing concern for retailers. Gartner reveals that a majority of businesses have faced a surge in returns with their expanding online operations.

Product returns can erode profit margins, harm customer loyalty, and disrupt supply chain operations. Asos recently announced a £291 million loss [$340m] caused partly by “serial returner” customers regularly buying discounted clothes only to return most of them. Feeling the effects, retailers are tasked with reducing returns without alienating customers.

The solutions they’re employing vary greatly. For example, some fast fashion retailers are charging for returns to offset costs and protect margins. By framing these fees in environmental terms, they are striving to retain customer loyalty. Others are enabling peer-to-peer returns that keep customers happy but don’t eat into the retailers’ bottom line. And some are offering free in-store returns while charging for returns made by mail. This way, customers still have a free option, but walking through the store encourages them to make an exchange as opposed to the initial return they had planned.

But there is a method that cuts down on returns proactively and right from the outset — leveraging high-quality product visuals that give customers a robust, detailed understanding of the product. In this article, we explore how innovative technology, namely CGI, can help retailers create this imagery and ultimately give customers the information they need to get their purchases right the first time.

The impact of poor imagery

Although poor-quality or low-resolution product visuals may seem like a minor concern, they can contribute significantly to returns. According to Coresight Research, 55% of brands and retailers reported that more than 10% of products sold online were returned due to disparities between the displayed visuals and the received products. The home furnishing sector experienced the highest return rates, with 14% of products being returned for this reason, which can potentially be attributed to the need for exact size and fit in home environments.

Consumer sentiment research conducted by Nfinite further underscores these findings and the importance of visuals. Special Report: The state of the shopper in 2023 revealed that 83% of consumers are more likely to return a furniture product if the online image does not match the actual item received. Additionally, 45% of consumers have returned large furniture items due to discrepancies in appearance or size. And over half of consumers are deterred from purchasing furniture items if there is limited imagery available for their desired colour or finish.

The power of quality imagery and immersive experiences

This product imagery problem illuminates a clear solution. To reduce returns and instil confidence in potential buyers, retailers must meet consumer expectations regarding visual content. According to the aforementioned report, consumers expect to see five or more images of a product before feeling confident in making a purchase. Contextual imagery that aligns with their personal aesthetic or interests also plays a significant role in driving purchase decisions. And when given the ability to visualise furniture in their own space using smartphone cameras (augmented reality), 50% of consumers were more likely to make a purchase, indicating the power of personalised experiences. 

The benefits of CGI and other emerging tech in reducing returns

How can retailers produce these images and experiences consumers are so clearly looking for? Enter CGI. Over half of the retailers surveyed by Coresight Research reported lower return rates after implementing CGI visuals. High-quality visuals, such as close-ups, lifestyle imagery, 360-degree views, all made simpler with CGI, allow consumers to examine products closely and experience them as if they are in a store setting, boosting their confidence in purchasing decisions. Add augmented reality (AR), and consumers are able to see how products fit in their own rooms and spaces.

These images and capabilities that accurately depict products will not only satisfy customer expectations, they will also minimise returns and foster shopper trust. According to the report, 52% of brands and retailers investing in CGI believe it significantly reduces returns, and many of these companies are just getting started with CGI. 

Navigating the Return Maze

As retailers navigate the challenges posed by increasing online returns, optimising product visuals emerges as a powerful strategy to reduce return rates and enhance customer trust. CGI imagery and other tools like augmented reality can significantly contribute to this goal by offering accurate, holistic depictions of products. By investing in high-quality visuals and embracing technologies that enable immersive shopping experiences, retailers can minimise returns, drive sales, and build long-term customer loyalty. 

Author

Jeff Griffin is Vice President of Strategic Accounts, Nfinite