how to use item returns to build customer loyalty

The arrival of the Covid-19 pandemic in France in March 2020 has led to a considerable increase in online shopping. Although e-commerce numbers have been steadily increasing for several years now, total population containment and physical store closures have left consumers no choice but to shop online.

According to Fevad, internet sales reached a turnover of 112 billion euros in 2020, an increase of 8.5 percent compared to 2019. A dynamic that was consolidated in 2021, with a consumption that amounts to 129 thousand million euros, an increase of 15.1 percent compared to 2020. The year 2022 should follow this upward trend.

Unlike stores where it is possible (and even recommended) to test before any purchase of clothes and certain products, online shopping involves some risks: sizes too small or too large, non-conforming materials, etc. one solution if the consumer does not want to keep the item: return it.

In the European Union, the return of orders is a consumer’s right. Within 14 days, it is possible, for whatever reason and without justification, to return a product purchased online or remotely. According to Statista, 45% of online shoppers returned at least one item in 2020 (a rate that rises to 53% in neighboring Germany and 52% in the Netherlands). That is, this is an important aspect that must be taken into account in the customer journey. Of 1,000 French people surveyed by ParcelLab in 2021, 49% say that a simplified returns policy is an important criterion when making an online purchase.

“From a retailer’s point of view, returns have so far been seen as a disadvantage and sometimes even a threat. Returning is sometimes perceived as a failed purchase, it incurs incredible costs, whether in shipping, processing, sorting, repair services, and finding a new life for that item. That’s why the decision to put items in the trash appeared to be the most cost-effective. It’s the way that until recently seemed the easiest and fastest way,” Ronit Mayer, co-founder of SaaS technology company Otailo, which offers sustainable alternatives to facilitate returns, told FashionUnited. The company offers circular routes, in partnership with stores physical stores for resale, renovation, recycling of items.

“Once a buyer has made the decision to return an item, they basically want to find the easiest and fastest way to get an exchange or refund. The downside is that the classic return process is quite long, it can take up to two weeks! If there are any issues along the way, shoppers end up with endless emails and calls with customer service. It can be quite frustrating”, explains the businessman. They are also 43 percent to abandon a purchase if the return conditions aren’t clear and advantageous enough, according to a study shared by Journal du Net.

Aygin Kolaei/FashionUnited

Returns, an opportunity for brands

For Otailo, returns, if well organized, represent an opportunity to build loyalty and create a close relationship with customers, they should not be considered as threats: “processing returns in an optimal way – however complicated it may be for the retailer – guarantees consumer loyalty, who will inevitably want to make more purchases on the platform”, he analyzes.

“The mission is to find the most viable and cost-effective next life for every return. This can go through an authorized dealer, who offers a price as close to the original price as possible. This solution is particularly sought after by eco-friendly fashion brands that want sustainable returns management and also actively seek to reduce carbon emissions. In this approach, physical stores are a valuable ally. People who return their items usually prefer to do so at the store. This is a well-known retail industry standard commonly referred to as BORIS, Bought Online Return In Store. Physical partners that engage directly with the brand and that are pre-authorized to process the returns offer a significantly more cost-effective and sustainable way to process returns,” notes Ronit Mayer.

According to Otailo, this solution also increases the number of visitors to the stores. The advantage for the buyer is the possibility of being refunded on the same day, exchange with a person and not with a chatbot or messenger and avoid a long journey.

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