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Great Expectations: The Rise of Returns and the Post-Purchase Experience

It’s no great secret that the modern consumer holds online retailers to increasingly high standards. Competition has never been higher, and as first generation digital natives start to rise up through the ranks, with Millennials now outstripping Baby Boomers with their collective spending power of more than $1.4 trillion, the eCommerce industry is engaged in an increasingly complex dance, as it attempts to keep a balance between profit margins and high levels of expected customer service.

Hand lettering signage reading "free delivery" on a glass window

As retailers, we tie ourselves in knots to bring the right kind of highly converting traffic to our stores, investing heavily in user research, journey and experience. World class product photography, visual merchandising, sleek checkout experiences and well-judged upsells all combine to get sales over the line. But increasingly, it’s the post-purchase experience that is critical to our customers’ satisfaction and lasting loyalty – an area where brands can differentiate and innovate, as well as making smart, data-led savings.

The Land Before Prime

It’s amazing how quickly we adapt to take a shiny new novelty for granted. Next day delivery may once have been a juicy carrot for retailers to dangle, but in recent times, and especially since the dawn of Amazon Prime, simply not offering such a service may well see your customer drifting away on a sea of newly opened tabs as they start to “power shop” around for a comparable product with a faster shipping speed.

Delivery, expedited or otherwise, comes at a price, and where some retailers or marketplaces will eat this cost to win the extra sales – or attempt to offset the expense in marginally higher product pricing (at the risk of seeming less competitive) – others run the risk of putting off customers with a higher additional charge. Unexpected delivery costs at check out are one of the biggest contributing factors to cart abandonment. Shopify have some excellent suggestions about ways to counter the issue, via increased clarity around delivery costs from the product page itself. However, as customers’ expectations around free or next day delivery become more and more hardwired, this problem isn’t going away any time soon.

Return To Sender

In a similar camp to the delivery conundrum comes returns policies. A necessary evil, as with free or next day delivery, online shopping habits are increasingly influenced by a culture of free returns, and research towards the end of 2018 showed that this offer was up there as one of the top motivating factors for customers with regards to making a purchase.

Bar chart showing that 64% of customers would be more likely to shop online if offered free returns

Zappos are, of course, renowned when it comes to generosity in this department, with a pretty much unbeatable 365-day returns policy, and free two-way shipping. Interestingly however, their best customers appear to be the ones who return the most orders. Customers spending a lot of money on their products are, perhaps understandably, more choosy, but the larger profit margins on those high-end products make up for those additional shipping costs.

Of course, a policy on this scale simply isn’t possible for a lot of retailers, but many do offer free returns of some nature, and when they do, this offer tends to be splashed in no uncertain terms across their site via banners and crystal clear signposting.

Getting Smart About Returns

With profit margins at stake, retailers are wise to the ways in which they can minimise the returns that arise from retailer error. Inaccurate sizing, item not as described or a defective item are all counted amongst the top reasons for returns to be made, and the blame falls at the door of the retailer in these cases. The real crunch comes from the hits you aren’t to blame for; shoppers making purchases that they have every intention of returning, most commonly seen with shoppers recreating the changing room experience from the comfort of their own bedrooms. Another issue comes from people buying clothing with the intention of wearing once and returning to the vendor.

One solution to minimising, and even learning from, these kinds of problematic returns, can come from a canny combination of apps and Shopify Flow. Last year, Shopify acquired Return Magic, a clear sign of the platform’s belief in the potential for innovation within the realm of post-purchase experience. Return Magic combines a smoother return process for customers with better analytics and insight for businesses. It’s this data that can be harnessed to help businesses become better informed about the types of returners that your store is attracting, and taking action to minimise or limit the impact.

In order to do this, Plus retailers are able to use a workflow like this one to establish refund thresholds, then automatically use that threshold to tag and segment customers. Once customers have been categorised, an onsite personalisation tool can be used to exclude repeat offenders from privileges such as free returns or full refunds. What’s more, customer service can be alerted to any abnormal behaviour surrounding returns within the parameters you set, and triggered to investigate.

shopify plus flow returns workflow

The Future of The Post-Purchase Experience

While it’s easy to focus on getting conversion rates flying, returns represent the double blow of a lost sale and a potential blow to overheads, and play a huge factor in creating positive post-purchase experiences for customers. While it’s highly unlikely that consumer attitudes to returns will drastically change in the years to come, with the smart use of data, apps and CRM platforms or powerful Shopify Plus features such as Flow, retailers are increasingly well-equipped to make informed strategic choices to maintain the balance of profit and customer satisfaction.

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