Today’s article is about returns management apps for Shopify, but it has some fascinating data about returns in e-commerce.
I include all the stats below.
The rest of the article is the comparison of the apps for Shopify.
An important question to think about: when you think about returns, do you see them as a cost or as a way to grow your store?
While this may sound strange, the way you approach returns will influence your conversions and customer lifetime value.
When asked about the state of returns in 2017, consumers had three key messages:
1. Returns are the new normal. They expect to return easily and be able to try at home without incurring extra costs or risks if they decide to return.
- 89% of consumers have returned an online purchase in the last three years.
- 41% buy the same item in multiple sizes or variations, with the intent to return some of them.
- 58% of shoppers mentioned that adding return friction with extra email or phone communication results in a negative return experience.
- 80% of consumers expect free returns, while only 25% of retailers offer free returns. This tells a lot about the challenge retailers face meeting the shoppers’ expectations.
2. Returns affect their decision to purchase or not. Most shoppers do read the return policy, and they will stay away from any retailers that make their policy unclear, complex or simply not customer-centric enough.
- 83% of consumers read the return policy before buying. It pays to optimize your policy for conversion like any other part of your site.
- 71% of customers find that a restocking fee or shipping fee can prevent them from making a purchase.
Fashion is the category where most shoppers expect free returns.
- 57% of customers believe that the return window should be at least 30 days.
A long return window decreases urgency to return. So with less urgency, more shoppers tend to keep their purchase.
3. Returns build trust and loyalty. Shoppers that return the most are also the most loyal. They engage with the brand, and the return policy can encourage them to buy more, growing long-term customer lifetime value.
- 72% of consumers said they would spend more and buy more often with merchants that make the return experience simple.
- 77% of returns are done by repeat shoppers. Or to say differently, people who return a lot also tend to spend a lot, and they trust the brand. It means that they are actively engaged with the brand.
- 89% of repeat customers who had a good return experience are likely to buy again. The return experience is a good predictor of customer loyalty.
On the topic of returns and loyalty, there’s a great quote by Tony Hsieh, CEO at Zappos. He makes a good case for more convenience to grow customer lifetime value:
“We also offer a 365-day returns policy for people who have trouble making up their minds. (Originally our returns policy was only 30 days, but we kept increasing it at the urging of our customers, who became more loyal as we lengthened the returns period.) Our returns run high — more than a third of our gross revenue — but we’ve learned that customers will buy more and be happier in the long run if we can remove most of the risk from shopping at Zappos.”
So how do you handle the returns? Do you still see it as a nuisance or as an opportunity?
4 Shopify Returns Management Apps Reviewed [Including Best Practice Guidelines]