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How to reduce ecommerce sales costs: Preventing online returns

Prior to the pandemic, there was a visible shift toward digitisation and digitalisation in support of what many are calling the fourth industrial revolution. The use of digital platforms over the course of the pandemic has saved many B2B and in particular B2C businesses from extinction. In 2022, digital is no longer the future, it is the now.

Those in government and other digital-related groups have actively encouraged retailers to embrace online. We are glad to see that SMEs that took the leap have reaped their rewards. One such company that we’ve helped, Serena Boutiques, have gone from strength to strength. The expansion has come rapidly for some while for others it has helped maintain their cash flow. We have heard of companies moving their entire business model online and permanently closing their shutters on their bricks & mortar stores.

While a form of online is a must for many, online is still not a low-cost model. Returned goods are one of the biggest costs for retailers, especially those in the fashion industry. During 2020 in the US alone, online returns more than doubled at an estimated cost of over $500 billion. Think of the overhead costs of rehandling the goods, inspecting, rehandling and all the general admin costs incurred with a single online return. These costs are so significant that some online retailers simply dump returns into landfill. Amazon has even developed an algorithm that determines whether it is viable for a customer to even return the item or to simply dump it / keep it themselves. How businesses manage and monitor returns is now more important than ever, especially with the shift to a more sustainable mindset.

Irish retailers will inevitably have a certain level of returns and will account for this in their margins. However, below we outline some tactics to explore that can prevent returns in the first place.

Do an audit of your website

Ensure it is well designed and properly laid out to best serve your customers. Your primary focus should be ‘Mobile First’, ensuring the website is responsive and loads correctly on all mobile devices. Over 45% of people made purchases online on their mobile device in 2021 according to Statista.com.

Put more effort into the website’s content

Put the effort into high-quality imagery and well-thought-out descriptions. This will help customers make better decisions. If a supplier provides you with poor-quality imagery, don’t be afraid to take your own. Most mobile phones have good enough cameras so there is really no excuses anymore for blurry imagery.

Include better size guides or fit information

Sizing, styles and fit can vary across fashion brands. Two brands of trousers with exactly the same size waist and leg can fit entirely differently when tried on. This issue is multiplied when dealing with children’s and women’s clothing. 3D video modelling and virtual fitting artificial intelligence is attempting to solve this problem but until you can integrate this, a quick win is to improve your item descriptions and/or include better size guides. Simply copying and pasting from the brand’s catalogue is not enough anymore. The item’s description is your only space or ‘touch point’ to sell the product to your customer online. What is the material like? Is it true to size or should they size up? What style tips can you give? etc.

Customer service and chat boxes

Introducing a chat functionality online helps open a dialogue with the customer and your brand. A chat box can help answer quick questions on sizing and availability which can be the final push a customer needs to make an order. Website chat facilities do require constant monitoring so you need to wight up your capacity to respond to messages and customer queries throughout the day. Online shoppers can be impatient, so any live chat messages left unanswered could cause you more damage than good. Consider opting for certain live chat opening times to allow you time to respond to your customers and expand if capacity allows.

Use website analytics

We are amazed at the number of people we deal with without any form of tracking on their website. Be it eCommerce or simply a brochure website. It can help categorise and understand return trends and return frequency. The data can then be used to anticipate and correct any errors in order to minimise and prevent future returns.

Preventing returns in the first place will help save much more in the long run. Customer behaviour has changed with the introduction of ‘Free Delivery’ but with positive initiatives like the ‘Green Friday‘ campaign by Kilkenny Design, companies are fighting back and encouraging consumers “to shop more consciously and support Irish brands and products”. To support Green Friday download the media posts below (click to download) to help spread the word and use the hashtag #SHOPLOCAL to get the word out.

Social Media Pack | Editable Flyer | Posters

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