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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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The rising pressures of online returns: study

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The rising pressures of online returns: study
The rising pressures of online returns: study
A breed of 'serial returners' that over-orders online with every intention of returning the items they don't need is emerging, a recent study found.

As a result of consumer demand for 'free and easy returns', suggests the analysis from Barclaycard, retailers are feeling increased pressure and suffering at the bottom line.

One in three (31%) of the 308 online retailers questioned told researchers that managing returns had an impact on their profit. Meanwhile, one in five (19%) consumers said they ordered multiple versions of the same item to make up their mind at home.

This comes as online shopping grows in popularity, with spending in digital channels rising 14.1% year-on-year in 2015, compared to just 1.1% in-store. Six in ten (58%) say a retailer’s returns policy impacts their decision to make a purchase online, and almost half (47%) of these would not order an item if they had to fund the cost of sending it back from their own pocket.

Because the majority of consumers say a retailer’s returns policy impacts their purchase decision when shopping online, Barclaycard says web-based retailers are caught between trying to attract customers and remaining competitive while also ensuring they protect their bottom line.

A significant proportion (57%) of the 308 retailers questioned say that dealing with returns has a negative impact on the day-to-day running of their business and means they need to find another way to recover the cost. Thus a third (33%) of online retailers offer free returns but charge for delivery, while one in five (20%) increase the price of items to cover the cost of returns.

More than a fifth (22%) of bricks and mortar retailers choose not to sell online because they are concerned about being able to afford the costs of managing the delivery and returns process. Serial returners said they would send back fewer purchases if businesses were to standardise clothing and shoe sizes (as cited by 38% of shoppers), which can vary between and even within retailers.

One in five (18%) said a better in-store experience, such as shortened queues for clothing store fitting rooms so they can try on sizes without the wait, would also reduce the number of returns they make. The same proportion would like retailers to introduce technology to help them better visualise an item when shopping online, such as the ability to ‘try on’ clothing after uploading an image of themselves.

Sharon Manikon, director of customer solutions at Barclaycard Global Payment Acceptance, said: “Today’s time-pressed shopper expects the process to be fast, easy and free – and that applies to both buying goods as well as returning them. Faced with more choice than ever before, alongside a range of different clothing and shoe sizes, it’s hardly surprising that this new breed of online shopper – the serial returner – is starting to emerge.

“Online spending will continue to rise and the need to keep pace with customer demands presents a dilemma for businesses needing to protect their bottom line. Fortunately there is light at the end of the tunnel with many ways retailers can streamline the returns process. From developing universal sizing to offering virtual dressing rooms, the key for today’s businesses is to determine which innovations work best for them – while ensuring they don’t lose out to their more savvy competition.”

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