Doddle APAC CEO Justin Dery discusses the findings from the business' research on returns in the Australian eCommerce market.
What trends did you uncover in your research?
We found returns are actually a loyalty driver and have a big influence on checkout conversion.
As many as 72% of Australian consumers check a retailer’s returns policy before committing to a purchase.
From our own desktop research, we know there are many retailers that still have really inconvenient returns experiences.
Whether this is because they think this will dissuade customers from returning or because returns have not risen to the top of their to-do list, it’s having a negative impact on checkout conversion.
It also isn’t enough to just promote a good returns policy and process; retailers have to walk the walk.
This is because 41% of Australians have stopped shopping with a retailer completely, due to a poor online returns experience.
A trend we’d previously thought we understood was 'wardrobing', whereby a consumer purchases an item and wears it out, with the intention of returning it for a refund when they are finished with it.
This concept had been blamed for why some retailers would not offer free returns.
However, the research uncovered that only 11% of consumers had ordered multiple items online with the intention of returning one or more of them, and just 22% of that 11% admitted to having engaged in wardrobing.
The few bad apples analogy came to mind when we learned this, but it also reinforced the need for retailers to adopt digital returns processes to better track customer behaviour across both buying and returning for true lifetime value analysis.
Why do you think returns are becoming more important?
The impact of COVID-19 has meant retailers have had to expedite their ecommerce roadmaps overnight.
Compared to other markets like the UK, we used to believe Australia was roughly five years behind in terms of the maturity of the market. But I think that may have shifted recently.
Within the space of a few months, we have more consumers shopping online than ever before and also shopping online more frequently.
Consumers are therefore savvier as to what makes a good and bad online experience and returns is an important component of that experience.
More than ever, every customer and every sale matters, so retailers are more attuned to ensuring they are providing the best experience they can, whether that’s through free returns or extended returns windows.
What impact does a good returns experience have on a fashion business?
Loyalty and conversion but it’s even more exaggerated for fashion than other verticals.
The convenience of your returns policy, process and experience, is a deciding factor for the majority of consumers to purchase and how likely they are to shop with you again as well.
But there is a cost to returns and a lot of retailers in the past have struggled with balancing a great experience with what’s profitable.
Blanket 'free returns' policies drive amazing results for conversion, because they remove the risk for consumers buying unseen and untried products online.
However, a manual returns process without any capture or analysis of the returns data means they can quickly become unwieldy and costly.
Digitising the experience via returns portals is the key to solving this conundrum.
For those just starting out on a digital returns journey, Australia Post’s Easy returns portal is a great entry point and a free platform for eParcel customers.
Capturing data on who is returning, what they are returning and why they are returning it, enables retailers to make smarter decisions around product, merchandising and marketing in future.
This digital journey also supports operations to know what volume of returns are expected and prioritise high demand and or value items to be processed for resale first.
In your opinion, what does the future of retail look like?
More collaborative.
It’s almost impossible for retailers to be experts on every new technology that emerges and how it can drive value for their business.
Working with trusted partners who can help retailers to filter the opportunities and improve the customer and staff experience via these technologies will be an important strategy for retailers going forward.
It’s not just external collaboration but internally as well.
The opportunity exists for retailers to encourage collaboration between marketing, ecommerce, data and logistics teams especially around the returns process, policy and journey.
Doing so will drive better experiences for customers, better insight and profitability for retailers and a stronger retail industry.