Retailers who don’t offer an easy returns process are losing sales and customer loyalty, with 84% of shoppers saying they won’t come back to a brand if they have a poor returns experience.
The research conducted by Klarna across 2,000 UK consumers in 2019 – and compared with the same data points from 2017 research – reveals the rapid normalisation of returns over the last two years. The majority of consumers (82%) say returns are now a normal part of online shopping, and with online sales hitting a high of 20% of all retail sales in December 2018*, this growth in returns can’t be ignored.
Returning returners: harnessing the loyalty bounce
Done right, returns can be a driver of loyalty and increased customer lifetime value, and retailers who don’t embrace the rise in returns culture could see customers snapped up by more dynamic competitors:
- Three quarters (75%) say easy returns are an essential factor in their choice of retailer
- Over three quarters (78%) said free returns mean they would buy more with a retailer over time
- 86% say the option of free returns will make them loyal and more likely to keep coming back to a brand
Retailers offering flexible returns and payment options are more likely to steal a march on competitors: 84% of shoppers want to be able to choose whether to return an item in-store or via post or pickup, and a third (31%) would be more likely to buy something online if they had the opportunity to pay for it after trying it at home.
From URL to IRL: false expectations and the reality check effect
The volume of online items being returned has climbed 14% in two years and this rise is being exacerbated by a growing gap between what customers see online and the reality of what they receive in real life:
- Consumers returning faulty items has more than doubled between 2017 and 2019 (12% to 26%), and nearly quadrupled for items in cases where the quality didn’t meet expectations (from 6% – 22%)
- Nearly a third of shoppers (27%) return items because the fit isn’t right, and because the product looks different online than in reality has more than doubled since 2017 (8% to 19%)
The findings indicate that if retailers wants to reduce their online returns, they should look to improve their online product representations with 81% of shoppers saying that better photos and descriptions would help reduce the ‘false expectations effect’ and consequently the amount they return.
Luke Griffiths, UK General Manager, Klarna, said: “It’s no secret that for retailers, returns can be difficult to manage and there is a common misconception that they’re bad for business. But retailers who aren’t prioritising their returns processes are damaging their business – losing sales, and eroding customer loyalty.
By embracing returns as a competitive differentiator, online retailers can stand out from the crowd with “pay after delivery’ – allowing their customers to turn their sitting room into a fitting room. Over a quarter of respondents (26%) said this would make them trust a retailer more and 63% said it would encourage them to keep more items, helping build a relationship with customers and secure long-term loyalty.”