Listening to customers is crucial for successful retailers, but often they overlook a key source of customer feedback: product returns.
Returns: A Valuable Source of Customer Insights
Every return offers a story, and while a single return might seem insignificant, collectively, they provide valuable insights. Imagine a scenario where hundreds or thousands of a particular item are returned. If customers are given a platform to share their reasons for returns, retailers can identify significant patterns such as website inaccuracies, incorrect sizing information, or packaging issues.
Gathering this information is the first step in creating strategies to enhance the customer experience, decrease return rates, and increase overall revenue and growth.
The Challenge of Data Collection
Many retailers underutilize returns data because they lack effective systems for collecting it. Relying on paper return slips for feedback is ineffective. Customers often do not fill them out correctly, warehouse staff may inaccurately transfer information to digital systems, and even when data is digitized, it can remain inaccessible and underused.
A digital returns platform addresses these issues by allowing customers to easily initiate returns, providing accurate data on what is returned and why, and eliminating physical paperwork. This data can be analyzed and acted upon before the returned items even reach the warehouse.
Leveraging Returns Feedback to Enhance Customer Experience
Once returns data is collected through digital solutions, it can be used across various departments to make a business more customer-focused:
- Marketing: Identify customer segments that result in more returns than revenue and adjust campaigns accordingly.
- E-commerce: Determine if unclear product photography leads to higher return rates.
- Logistics: Recognize delays between customer drop-off and warehouse arrival, affecting resale opportunities and refund times.
- Purchasing: Identify inherent product issues flagged by customers and reassess suppliers.
These insights lead to significant improvements in customer experience and company profitability.
However, the widespread utility of returns data can create challenges regarding departmental ownership. When multiple departments are involved without clear coordination, driving improvements can be difficult. Traditionally, returns were seen as a cost center, which reduced the incentive to invest in customer experience and data collection. Defining clear ownership and recognizing the potential value of returns data can significantly enhance business capabilities.
Beyond Feedback: Optimizing Returns Processing
Returns data not only provides customer feedback but also facilitates more efficient returns processing. Retailers can implement smart policies like offering free returns for loyal customers or providing “returnless” refunds for items that are not cost-effective to ship back and resell.
Moreover, analyzing returns data reduces manual processing time, ensuring that items are sorted and prioritized based on their condition—damaged goods can be sent directly to repair or recycling, while resellable items are quickly reintegrated into inventory.
