Minimize Costly Merchandise Returns This Holiday Season

November 20th, 2019

Minimize Costly Merchandise Returns This Holiday Season

How Leveraging Your Data Insights Can Cure the Holiday-Returns Headache


As customer service and experience become a heightened focus in the retail landscape, balancing return policies while offering elevated customer service is more important now than ever. While retailers are dealing with returns all year long, this is a pain-point that increases during the holidays each year.

Logistics platform Optoro, which specializes on returns optimization, reports an overall merchandise return rate between 8-10% for brick-and-mortar store purchases, while e-commerce returns culminated to a staggering 20%. These numbers tend to dramatically increase during the holidays, especially for online purchases. In fact, 30% of seasonal e-commerce purchases are being returned. Overall, 89% of consumers claim they have returned an online purchase, according to e-comm platform, Shopify.

Brands specializing in apparel and accessories are especially vulnerable to this phenomenon, as the customer is being deprived of the ability to give items a physical evaluation prior to purchasing. Knowing this, customers proceed to check-out reserving their right to evaluate items upon recept and return if the purchase doesn’t hold up to the description, as well as, expectation. This reversed buying process usually leads to increased return rates for e-commerce brands. But you need to offer great customer service in order to get the sale, and that often includes a low-risk return policy. So, what can retailers do to reduce these costly returns? 

Fortunately, there is a sea of SaaS (Software-as-a-Service) offering data-driven technologies that can help solve the returns dilemma and enhance the customer experience while offering retailers invaluable insight into shopper preferences and expectations. Some noteworthy SaaS companies to consider are Optoro, which focuses on reverse supply chain optimization, Vend POS - a cloud-based point-of-sale and retail management platform for brick-and-mortar retailers and Springboard Retail which is a purpose-built software delivering seamless customer service.  

Another way to minimize returns and surprises can be achieved by implementing sizing guides, stating whether items are true to fit or run small/large, specifying relative sizing of jewelry either on a person or in comparison to other common objects, expanding the item description. This will allow you to tap into a very detailed analysis of individual customer data and match them with merchandise information to recommend personalized and custom suggestions.  

Stitch Fix, for instance, a company that funnels customers through a series of questions called a Style Profile in which it will log the customer’s body type, style and fit preferences, lifestyle and budget. The information is then accessible for personal stylists who curate customized boxes that deliver straight to your door.  

It is not just within the apparel industry that retailers maximize the use of technology to minimize returns. Many other companies offer virtual reality features to overcome the barrier of delayed evaluation. Known furniture brands for instance utilize VR to showcase furniture in your home through a smart phone lens.

While eCommerce retailers like Stitch Fix are becoming more savvy and adopting this technology, many independent brick and mortars are just learning to integrate these tools to drive their customers to their business, and to the point of sale, because we now understand that 3 times as many Gen Z shoppers still prefer to buy specialty items in-store after browsing online*. 

The value of these types of data that can be collected can give valuable insights into the consumer’s buying process and deliver customized experiences to drive consumers toward to the sale. Retailers can scan customer activity and purchasing patterns to shape their product lineups with greater precision and make more informed projections on future sales, slashing excess inventory. 

Returns are ingrained into retail's DNA but managing and analyzing the data that is available can help make returns the recessive gene of your brand. If virtual reality headsets can push Macy's above the 98% shopper satisfaction threshold, just imagine how data-driven technologies can empower your brand to deliver deeply personalized experiences that fit each customer like a glove. 


Join us!

Smart Retail: The Path to Purchase

How to Keep Customers Discovering Your Store and Maintaining Loyalty

Mark your calendar to join us on February 4, 2020 for an in-depth panel discussion moderated by Nicole Leinbach Reyhle of Retail Minded at NY NOW® and learn new ways for small businesses to implement affordable technology to engage customers and increase ROI.

*Data presented by the National Retail Federation article What do Gen Z shoppers really want?


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