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New Survey Shows Ratings & Reviews Are a Key Tactic to Reduce Returns

By Andrew Smith, Vice President of Marketing for PowerReviews

Product returns take a major hit out of revenues. Experts estimate the average return costs between 15 to 30 percent of the original purchase price; what’s more, the cost of covering the shipping for returns can be staggering. All told, returns cost brands $550 billion each year.

But a key digital strategy can help brands reduced their overall rate of returns – that’s according to insights from 7,688 U.S. consumers who were surveyed in June 2021. Our study, “Returns in Retail in 2021,” reveals that when shoppers have access to ratings and reviews, it significantly reduces their likelihood of returning an item. In fact, two in three shoppers said they’d be less likely to return a product if they had been able to view user-submitted reviews, Q&A, or images and video prior to their purchase. 

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With 88 percent of consumers surveyed reporting they make returns at least “occasionally,” and industry reports that returns were up 70 percent year-over-year in 2020, brands should prioritize strategies to reduce returns. 

Twenty percent surveyed say they return items bought online more often than those purchased in store, which has significant implications for brands as eCommerce volumes have exploded during the pandemic. At 88 percent, clothing was by far the most common type of product returned, followed by shoes (44%), electronics (43%), home & garden (24%), health & beauty (21%), toys (19%), appliances (18%) and other products. 

Incidentally, these top product categories mirror product categories where consumers most value user-generated images, including clothing (78%), electronics (70%), home and garden (62%) and health and beauty (60%). By generating more images and videos from customers, retailers can help lower return rates for these product categories.

Free shipping (96%) and free returns (79%) topped the list of buyer considerations. Nearly half of consumers surveyed perceived the ability to buy online, return in-store as important.  

Over 80 percent (83%) of consumers with household incomes over $100,000 said free returns were important. To this end, luxury brands catering to higher-income shoppers should consider implementing a free returns policy. It’s possible that high-income households have more discretionary income to spend on nice-to-have items, and they want the option to return the item if they change their mind, while lower-income households may be primarily shopping online for necessities that they don’t plan to return. 

How Ratings and Reviews Work to Reduce Returns 

Normally shoppers have the benefit of experiencing products firsthand in stores before making purchases. But online shopping is a different world – consumers can’t feel the fabric of a blouse or hold a water goblet to understand its proportions. They are completely dependent on product descriptions and other shoppers experiences when researching items online to determine if they will meet their needs. Poor content on product description and the consumer’s experience with that product makes shoppers guess as to that item’s suitability. As a result, this uncertainty can result in more returned goods.

As well, 70 percent of consumers cited the reason for return was issues with product fit. Bracketing, when consumers buy multiple sizes of the same item, is a big hurdle for apparel brands — leading to higher return rates, driving up costs, and tying up inventory that could otherwise be sold. Ratings and reviews can help here; brands can add size and fit information to product reviews to help shoppers make more accurate purchasing decisions.

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User generated visuals play an important role as well. Imagine a shopper is looking for a dress for an upcoming wedding. She finds one she likes online, but in the photo of the brand offers, the model looks shorter in stature than she is.

If the shopper can view photos submitted by other customers wearing the dress that are her same height, she might determine she doesn’t like the length of the dress on taller shoppers, and opt to purchase a different dress with a longer hemline. Guess what? That brand just avoided an unnecessary product return by giving the consumer valuable visual insights.

Consumer Insights Fuel Continuous Improvement to Reduce Returns 

Ratings and reviews also give brands another powerful means to reduce return rates – by tapping into the consumer insights in the actual reviews themselves. By treating ratings and reviews as a consumer insight channel, retailers and brands can formulate a better understanding of what causes customers to return items.

Instead of treating ratings and reviews purely as an online conversion mechanism, it’s worthwhile thinking about how you can further maximize its potential. Display it in a way that facilitates in-depth and accurate buyer research prior to purchase and then extensively analyze the information it contains to drive impactful product improvements.

By uncovering the connection between ratings and reviews and product satisfaction and return rates, user generated content can provide a wealth of data to help brands mitigate returns – something for due consideration as we head into the post-holiday return season. 

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