Many retailers online are now offering free returns and extended return windows for Black Friday and the holidays. The intention is to lower the threshold to buy. On average, 20% of all online purchases are returned, whereas in brick and mortar stores, the figure is only around 9%.
In some industries, such as fashion, where fit is paramount and harder to gauge online, return rates are even higher. At online fashion giant Zalando, for example, 50% of sales are returned—every other item sold comes back.
The industry has coined December 3 as Returns Thursday, since that date, following the extended Black Friday weekend, sees more returns than any other day of the year. Indeed, while enticing to consumers, the problem with generous holiday-timed return policies is that they encourage returns rather than prevent them.
Online stores should focus more on helping customers find the right products than on promoting free and easy returns. At global tech agency Reaktor, we help major retailers, such as Adidas, minimize and prevent their returns. Even the smallest adjustments to the operations and appearance of an online store can have an enormous positive impact on the amount of returns and thereby the environment.
Returns are indisputably bad for the climate. Shipping things back and forth creates needless greenhouse gas emissions. Only 54% of all packaging gets recycled. And an estimated 5 billion pounds of returned goods end up in landfills each year. These piles of discarded items now sit in deserts around the world, from Ghana to Chile. Many retailers also burn, shred, and otherwise destroy returned items (alongside unsold ones) to make sure the value of their brands stay high.
Many businesses are now coming up with innovative ways to be more mindful of their growing returns and the subsequent waste. Many sell returned items at outlets or in dedicated secondhand stores. Some even create clothing from recyclable materials, such as wood or used plastic. While laudable, these efforts are ultimately still not enough. The most environmentally friendly act of all would be if these sales-that-result-in-returns never happened in the first place.
In fact, both shoppers and retailers win when returns are minimized. Shoppers don’t need to go through the trouble of returning a product while retailers can better bank on completed sales.
Here are three ways all retailers can minimize returns online and make the original purchases stick, while also engaging their consumers in more conscious shopping.
1. Use AI and machine learning to understand returns
Retailers have enormous amounts of data at their disposal when it comes to returns online. Many even ask their consumers to fill in short questionnaires at the end on why they’re returning a particular product. Still, most brands don’t make full use of all this information.
That is where tools, such as AI and machine learning, can do a lot of the heavy lifting. AI can quickly and effectively analyze enormous amounts of data, identifying the most often returned items and the reason behind the returns. If a product is constantly found defective or otherwise disliked by consumers, it’s best for both the brand and the environment to pull that product out of circulation.
Similarly, AI and machine learning can draw on reviews and returns alike to match users with other like-minded people, creating audience groups to whom various product offering adjustments can then be offered. An AI tool could, for example, point out to a shopper looking at a shoe on the site that “most customers prefer a larger-than-usual size in this model,” thereby encouraging that shopper to move up in size before ordering. Such small adjustments can have a big effect on return numbers.
2. Sharpen product descriptions
A large share of returns happen because of a mismatch between the online description of an item and the actual product received. Much of this can be fixed simply by readjusting the way retailers present products online. It’s important to have all measurements and sizes explained to the shoppers in ways that make sense (and match what they know from other retailers), and to provide an amplitude of photos that display the product from all sides.
And rather than just portray shoes or clothes in pictures, a video can show how the material handles movement, for example. AR/VR tools can even let shoppers virtually try on clothes from the comfort of their own home.
3. Guide shoppers through the site
Ultimately, the most effective e-commerce sites are the ones that best mimic the human-to-human interaction that happens in brick-and-mortar stores. Online shops should intently listen to their shoppers, give personalized recommendations, and help out in picking the right materials, sizes, and fits. In other words, online stores should guide customers through the entire shopping journey rather than just rush people to “add to cart” and “buy now.”
Product finders are an example of a new technological tool that can easily create this experience for users. By talking the shopper through the process with a few easy multiple-choice questions—”What sport do you need this shoe for?” “How extreme is the sport?” and “What type of terrain is involved?” for example—the product finder can, with a little help from the shopper, create a more customized recommendation. That in turn makes the online ordering experience much less stressful for the consumer. Not only do they find the right shoe that fits, they also don’t have to order five different pairs to test out (ultimately resulting in returns for the ones that don’t make the cut). Which would automatically lower the number of returns.
E-commerce is here to stay—but it needs to evolve to match customers’ needs. It’s time we make shopping online easy, fun, and most of all, sustainable. That starts with letting go of the idea that returns are a necessary evil.
Sarita Runeberg is business development director at global tech agency Reaktor.