Over eight in ten (84 per cent) online shoppers would turn their back on a retailer after a bad returns experience. That’s according to new research from Klarna, which highlights the power of returns as a customer acquisition and retention tool, and the repercussions of getting them wrong.
With 39 per cent of consumers* having done more shopping online since the pandemic, an increased reliance on returns means people’s patience is waning when it comes to clunky or costly returns processes. 83 per cent of online shoppers admit to getting frustrated by retailers which have an inefficient returns process, while 82 per cent agree that retailers, in general, need to improve their returns capabilities.
Demonstrating the need for retailers to keep up with consumers’ changing needs, some of Brits’ biggest frustrations with returns stem from the inconvenience of slow, out of date or inflexible returns processes. Over a third (36 per cent) cited slow refund processes as the most frustrating element of returning items bought online, highlighting the importance of flexible payment options. Other frustrations include having to print off return forms when they don’t have a printer (25 per cent), the inconvenience of queuing to return at the post office (23 per cent) and not being able to return items in store that they’ve bought online (21 per cent).
Exacerbated by Coronavirus, these frustrations with the returns process are the driving force behind emerging shopping trends, as people find ways to avoid inconveniences. Over the past 12 months, a fifth (21per cent) of online shoppers say they have reluctantly kept an item they were unhappy with because it was too much effort to return it, 12 per cent have avoided returning items at the post office because it’s difficult to social distance, while 11 per cent have gifted and 9 per cent have resold items they don’t want instead of returning to the retailer. In the long run, this could mean people avoid buying again from retailers that don’t meet their needs.
For those retailers that get returns right, this can serve as a competitive advantage, helping to attract new customers, and boost customer loyalty. 84 per cent of online shoppers agree they’re more likely to buy from and 86 per cent are more likely to come back to online merchants who offer free returns. However, even a little added inconvenience can come at a cost: over two thirds (70 per cent) of online shoppers state that if a preferred retailer stopped offering free returns, they might not shop with them.
Alex Marsh, head of Klarna UK, said: “Nobody wants to be out of pocket as a result of items they don’t even choose to keep, so it’s no surprise that slow refund processes are the top frustration factor when it comes to returns. As reliance on returns grows, retailers need to ensure they’re offering a smooth, seamless process that meets the needs of today’s customers – considering everything from effortless logistics to flexible payment options. As our research suggests, those that fail to adapt will lose customers in the long term.”
The research also uncovers a consistent trend of rising consumer expectations when it comes to returns services. Compared to 2019, a greater number of online shoppers now believe that returns are a normal part of online shopping today (80 per cent, up from 77 per cent) and expect that every retailer they shop with offers free returns as a minimum standard of service (81 per cent, up from 75 per cent). And, as customers increasingly demand free and easy returns, more consumers also now state they’d never shop with a retailer that didn’t offer free returns (57 per cent, up from 53 per cent), and that all their preferred retailers offer free and easy returns (73 per cent up from 70 per cent).
Natalie Berg, Retail Analyst and Founder of NBK Retail: “Consumers often expect a returns policy to mirror that of delivery – fast, frictionless and free – but that’s not always the case. The pandemic has thrust the issue of returns into the spotlight, exacerbating the disconnect between the effortlessness of placing an online order and the inconsistent and often friction-filled experience of making a return. Returns are fantastically out of sync with an otherwise seamless e-commerce experience.
“As we reimagine retail for a post-COVID world, retailers must accept that returns are part and parcel of 21st century shopping and, if managed well, can encourage conversion and drive loyalty among their most valuable shoppers. Retailers can no longer afford to ignore the post-purchase experience.”
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