Amazon overreacting; returns are a crucial retail indicator

Amazon has kicked up a furore by banning consumers who return too many items on its site. Sure, rising return rates are a challenge for brands and retailers – over 9% of products bought in store are returned and the rate is even higher online, sometimes three times the amount.

Nevertheless, while frustrating, returns are a vital indicator of product performance and customer satisfaction. Not only is Amazon’s ousting of certain customers something of a PR disaster, but it’s a blunt way of handling quite a nuanced area of ecommerce.

The question Amazon needs to be asking is just why are return rates on the rise? The reason is largely to do with the increased ease in the returns process, at which they have always excelled. As e-commerce struggled to replicate the brick-and-mortar changing room, the answer to this gap in the consumer journey came in the form of the product returns.

But a great returns policy needn’t be the undoing of a marketplace. Customer-generated content (CGC) can play a major part in helping to tackle rising return rates, by giving customers more information on products and increased certainty to buy the right product, fit or size. Here are three ways CGC can help retailers and brands to reduce return rates:

Reinvent the Q&A

While product descriptions provide a useful overview of the product, it can be difficult to include all of the information customers are looking for in a compact and concise manner. This is where Q&As can provide benefit to the customer when shopping for new purchases.

Some brands prefer to keep full control over content published on their website and answer questions themselves. Others use the power of the masses to deal with customer questions, offering a forum for them to exchange questions and build a community around the brand or certain products. No matter which approach brands or retailers choose, there is an average of 98% in conversion lift when shoppers engage in Q&A on major retail sites.

The secret to lowering returns is being responsive. It is always important to engage with consumers and start a dialogue, whether public or private, even if the conversation may start off negatively. By providing as much information about the product, hopefully the customers in market for your products are as well informed as possible and know what they’re buying when purchasing.

This may in turn have the capacity to decrease the volume of customer service enquiries, as you may answer a few customers’ enquiries with that one Q&A.

Utilise insight to decrease future returns

Even though negative reviews sound like the worst nightmare for marketers, they can actually prove to be a great tool. Candid ratings and reviews help inform other consumers making their purchase decisions, but businesses should also use reviews to glean insights into who buys their products and how they use them.

Ideally, negative feedback from customers is used to improve the product itself. If several customers are complaining about faulty zips or buttons falling off quickly, brands can utilise this information to improve their manufacturing process and eliminate those errors from occurring again. Therefore, businesses should continuously read and analyse this valuable customer feedback and take note of any recurring complaints.

Additionally, some businesses use reviews to decide whether or not to continue selling certain products, even if return rates and customer service complaints are low. Many consumers don’t bother returning products or filing complaints for products below a certain price point, but if product reviews are overwhelmingly negative, businesses can choose to fix or discontinue selling the product.

Manage customer expectations effectively

Consumers return products for many reasons: wrong sizing or fit, different colours, unexpected fabrics. Put simply, these are all instances of a product not meeting expectations. Where products aren’t malfunctioning but are still being returned as a result of this, brands can use this data to adapt their marketing strategy.

By assessing ratings and reviews on their e-commerce sites, retailers give shoppers a better understanding of the products they’re considering and can help set expectations about functionality and usability. Simply adding a sentence such as ‘customers who have purchased this product advise that this item comes up small, try ordering a size up’, can mitigate the risk of further returns.

Equally, the guidance can come direct – from customer to customer. The Australian online designer dress rental service GlamCorner managed to inspire customers to include visual content. Reading reviews of other customers alongside the visual proof helped the brand build further authenticity as well as a 50% reduction in returns and refunds within seven months of launching the programme.

Improving the online accuracy of products with visual content also reduces ‘string-purchases’ where the same or a similar product is bought in different sizes and the ones that don’t fit are returned.

Offering a competitive returns policy can be a double-edged sword. As with string-purchases, a free and flexible policy leads to increased returns. Equally, a strict or cumbersome policy can prohibit sales. It doesn’t have to be this way. Ratings and reviews can help increase certainty about purchases, proactively prevent dissatisfaction, and even optimise the products being sold—all of which drive returns down and loyalty up.

By Sophie Light-Wilkinson, vice president of marketing at BazaarVoice, a firm specialising in the collection, analysis and display of consumer-generated content.