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Retailers of every size know the pleasure of making a sale, and the letdown that inevitably comes when a product is returned. Rather than lamenting the loss, companies should dig deep and implement tactics to help them understand the reason for the return. With that knowledge, they can learn how to turn a return into a sale. Read on for a three-step process to do just that.
1 Ask why the item is being returned.
Before you can offer a solution, it’s important to understand the root cause of the return. Empathize with the customer and actively listen to their needs. Implement a protocol, in-store, online and at home. If a customer returns a product in-store, have your employees ask questions about why the product is being returned. If a customer is returning an item through the mail, include a survey in the packaging that asks the same questions, or create a microsite online as part of the returns process, where customers can answer questions as well.
Tip: Set up a Return Merchandise Authorization
Return Merchandise Authorization is a reverse logistics process that requires a customer to contact you before making a return, whether on your website, through email or by phone. This communication allows you to catch the customer in the midst of a return and propose another solution, preventing you from losing a sale.
2 Suggest an alternative.
Once you know the reason for your customer’s return, offer them another, more appropriate product for purchase. Base your recommendation on their answers. If a color or fit was off, show them products better suited to their specific needs in-store and across multiple channels. If you can’t find a replacement product, be sure to let them know of any special promotions going on or try to cross-sell them products from other departments.
Tip: Monitor the products your customers are returning. That way, if you find an item consistently being sent back, you can use return data to understand why it’s defective, if it’s overpriced or just not matching up to its advertising. This will allow you to address the issue and prevent returns in the future.
3 Suggest a gift card or store credit.
If the customer is intent on returning their merchandise without making a purchase, propose in-store credit or a gift card instead of a full refund in cash or on their credit cards. You could also enforce a policy that requires returns to be redeemed as store credit only. That way, the value of the sale can still be used exclusively in store or online.
A healthy returns process is the cornerstone of a successful retail and e-tail business. By studying your customers’ return habits and implementing a system to track the reasons for their returns, you can find multiple avenues to convert their dissatisfaction into another purchase.
The holidays might be a while away, but if you are a sales-oriented business, it’s never too soon to start planning. For many retailers, particularly those in ecommerce, the holiday shopping season is the biggest and busiest time of year. And, it’s expected to only get bigger with a projected 15.8 percent climb in ecommerce for the 2017 holiday season1.
To prepare your business for what lies ahead, it’s helpful to start by studying customers’ expectations and where and when the spending took place in the previous year. Ready to dive in to see what’s in store for 2017?
What to Expect this Holiday Season
Consumers are shopping last minute. While Black Friday and Cyber Monday generate buzz online and offline, last year the majority of consumers shopped in the weeks following Cyber Monday2. This is due to several factors including retailers extending cyber sales and better online shipping options3.
Online and mobile shopping will continue to grow. Last year, over half of consumers shopped online for gifts, with 20 percent using their mobile devices4. And, as companies work to refine their omnichannel strategies to accommodate a generation of mobile-friendly consumers, ecommerce will likely continue to dominate.
Consumers are hunting for bargains. Last year, 73.3 percent of customers relayed that the top factor for choosing a retailer during the holiday season was sales or price discounts5. Given this, retailers should make compelling offers to increase their competitiveness.
Consumers want shipping deals too. In 2016, 48 percent of customers said free shipping and shipping promotions was a key factor in purchasing from a retailer, the highest ever6. When planning for the 2017 holiday shopping season, companies should consider integrating free shipping promotions if they haven’t already.
Companies garner more consumer support when they contribute to the quality of peoples’ lives. Today’s consumers are more willing to spend money on brands that they believe are meaningful and will enhance their personal wellbeing and the causes and communities they care about. A study found that for every 10 percent increase in meaningfulness a company can increase its purchase and repurchase intent for consumers by 10 percent and 5 percent respectively7.
For the 2017 holiday shopping season, making buying exciting, affordable and easy, as well as getting merchandise into customers’ hands in a timely, affordable fashion, are important factors for retailers to consider when planning their retail strategies. As the above insights suggest, customers will be shopping for the best deals with the quickest delivery turnaround and they’ll expect shipping costs to be part of the deals offered. Start planning your promotions now to have an amazing holiday season of sales.
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