Josh Horton, product marketing manager, Bazaarvoice
The growth in e-commerce has created new standards in retail, but more importantly, it’s created new standards in consumer expectations. Today’s shoppers have access to innumerable product choices and resources where they can research products and price compare their options. Additionally, they demand convenience, speed and excellent customer service with every shopping experience. These shifting shopping behaviors have created new challenges for retailers, one of the biggest being shipping and fulfillment.
To meet the demands of today’s shoppers, many retailers have started expediting their shipping windows to next-day or even same-day delivery, while others have created convenient fulfillment methods where shoppers can purchase online and pick-up in store. Though these new models are great for shoppers, they will inevitably increase return rates for retailers.
Due to the nature of online shopping, online return rates far exceed those in brick-and-mortar stores. While 9% of products bought in store are returned, it can be three times this amount online. In fact, UPS predicted that 5 million returns would be made the first week of January accounting for an estimated $260 billion in lost sales for U.S. retailers. Handling high volumes of returns is expensive and a significant undertaking for businesses, so retailers must find ways to avoid returns by helping their customers make the right purchase the first time.
Giving consumers access to helpful, relevant ratings and reviews while they’re shopping is one of the most effective ways to do this in the online environment. Here are four ways that online reviews can help retailers reduce their return rates.
Use ratings and reviews to set customer expectations
By featuring ratings and reviews on their e-commerce sites, retailers give shoppers a better understanding of the products they’re considering and can help set expectations about functionality and usability. Shoppers can learn how other people have experienced the product and decide whether or not it’s the right product for them. Online reviews are a great supplement to product descriptions, bringing products to life with the subjective and unbiased opinions of other customers.
Take fashion as an example. Fashion not only has the highest return rate of any category, but also the highest rate of “intentional returns”—returns from shoppers who intentionally order duplicate items to compare against. Shoppers are skeptical of buying apparel online because they prefer to try on, touch and feel clothes in person, so it’s no surprise that returns are common when clothes don’t feel or fit as expected.
Retailers can help set expectations about their products by encouraging previous purchasers to share detailed information about themselves, both through text and photos, when leaving product reviews. This illustrates how garments of different sizes fit and look on real people, and makes it easier for online shoppers to decide to buy or not to buy.
Analyze customer feedback to proactively prevent returns
Ratings and reviews help inform other consumers making their purchase decisions, but businesses should also use reviews to glean insights into who buys their products and how they use them. Reviews can surface product flaws before returns become a larger problem, so businesses should continuously read and analyze this valuable customer feedback and take note of any recurring complaints to identify opportunities for improving their products and services.
Additionally, some businesses use reviews to decide whether or not to continue selling certain products, even if return rates and customer service complaints are low. Many consumers don’t bother returning products or filing complaints for products below a certain price point. But if product reviews are overwhelmingly negative, businesses can choose to fix or discontinue selling the product to proactively prevent bad experiences for their customers and future returns in the long run.
Reduce uncertainty by answering customer questions
While product descriptions provide a useful overview of the product, it can be difficult to include all of the information customers are looking for in a compact and concise manner. Recent research shows, 91% of answers to questions on product pages were not reflected in the product’s original marketing copy. This indicates that customers often have unanswered questions about products, which can prevent them from purchasing or return the products post-purchase. By providing Q&A functionality on product pages, retailers have the opportunity to engage with consumers and help fill these knowledge gaps.
This approach also provides a scalable way to communicate an answer to a mass audience rather than on an individual basis through support calls or live chat. By crowdsourcing answers from owners of the product and other customers, questions can be answered quickly by a variety of trusted sources.
Use reviews to drive in-store purchases
Today’s customer journey spans across multiple devices and channels, and the customer experience, whether on the web, in store, or on mobile, must be consistent. Online ratings and reviews are critical for driving in-store traffic and sales; in fact, almost half of brick-and-mortar shoppers read online reviews before making an in-store purchase. While the retail industry has made great strides to bridge the online and in-store shopping experience, even the best technology can’t entirely replicate trying on or using a product in person.
According to a KPMG study, 37% of returns are due to customers not liking a product or the product not fitting. Offering a click-and-collect service, where shoppers can browse and buy online and pick up in store, provides the convenience of online shopping with the confidence and instant gratification of in-store purchasing.
For retailers, click-and-collect can increase footfall to stores and help reduce shipping spend by avoiding the uneconomical “last mile”. For customers, it provides a convenient collection experience and hassle-free returns.
Offering a competitive returns policy can be a double-edged sword: A strict or cumbersome policy can prohibit sales, while a free and flexible policy leads to increased returns. It doesn’t have to be this way. Ratings and reviews can help increase certainty about purchases, proactively prevent dissatisfaction, and even drive in-store traffic—all of which drive returns down and satisfaction and loyalty up.
Bazaarvoice provides ratings and reviews technology to 222 of the Top 1000 online retailers in North America, according to Top 500Guide.com.