Reducing Web returns A little information can go a long way This holiday figures to bring a rash of new Internet shoppers perusing your Website and, hopefully, buying your merchandise. But as sales increase, so will returns. And as all catalogers know, returns place an added burden on your operation.
According to management firm McKinsey and Co., return rates on the Web can run as high as 35%, mostly from first-time Web shoppers. Conversely, operations professionals estimate print catalog returns at 2%-5% for hard goods, 15%-25% for shoes, and 15%-30% for fashion apparel.
Marketers stand a better chance of reducing future returns if they know why products have been returned in the past, says Josh Leichtung, president of San Francisco-based Internet consulting firm NetStrategies@consultants: “You should request feedback from your customers – through return forms, an 800-number, or e-mail – about the cause of any returns.”
Most fulfillment and catalog management systems have a built-in “reasons for returns” report capability, which analyzes returns by vendor, item, and quantity returned as percentage of units shipped. Typical reasons include duplicate shipments, late delivery, wrong items, wrong color or size, and items arriving damaged. Examining these reports can indicate patterns or problem areas. If, for instance, the lion’s share of your returns involve merchandise from one particular vendor, you might want to reexamine your relationship with the company.
On the other hand, if a particular item’s return rate is vastly higher when ordered online as opposed to when it’s ordered from the print catalog, you should compare how the product is depicted in each selling channel. Perhaps you need to include online a button that shoppers can click to enlarge the product photo.
Also, taking advantage of the Web’s unlimited space should enable you to reduce returns, Leichtung says. By expanding the product copy on your Website, you can provide special instructions regarding fit, size, and color issues to address the customer’s questions and concerns, in a way that the limited space of a print catalog doesn’t allow.
Making returns easier The ability to go into greater detail online can also simplify the returns process for those customers who nonetheless aren’t satisfied with their purchase – which is critical if you want these customers to try your company again. Sandy Grossman, vice president for Leesburg, VA-based third-party logistics provider Genco Distribution Systems suggests posting not only detailed return instructions on your Website but also answers to the five most frequently asked questions about returns.
For its part, Seattle-based kitchen products cataloger/retailer Sur La Table simplifies the return process by sending customers a preaddressed return label to use to ship back merchandise, says vice president of operations John Salvatore. Sur la Table has a return rate of 3%, and about 10% of its orders come from its Website.
Nordstrom, a Seattle-based cataloger/retailer/Web marketer, also ships out a preaddressed, prepaid postage return label (and waives return charges if the customers use a Nordstrom credit card). Nordstrom also allows customers to return Web purchases to the stores. Nordstrom.com spokeswoman Shasha Richardson says that the company’s total return rates, among the Web, the catalog, and the stores, are 22%-25%.