According to the new report, 91% of retailers are experiencing an increase in return rates, yet most continue to treat returns as a cost of doing business
Incisiv, a next-generation industry insights firm that helps retailers and brands navigate digital disruption, has announced the release of its 2023 Omnichannel Returns Index in partnership with Appriss Retail, an industry leader of data-science-driven solutions that can help optimize consumer interactions and reduce fraud risk. This second edition of the benchmark assesses 128 leading retailers across nine retail sub-segments, four capability areas, and 80 digital experience capabilities related to returns.
As the share of digital revenue has grown, the benchmark study found that shoppers return online purchases three to four times more than store-bought purchases. Despite this trend, most retailers have yet to take a strategic approach to reducing returns and continue to view them as a cost of doing business. In fact, only 19% of retailers have a strategic returns program in place.
“Our 2023 Omnichannel Returns Index shows that retailers can no longer afford to ignore returns and must take a strategic approach to reducing the cost and complexity associated with returns management.”
The study demonstrates that most retailers have a limited understanding of their returns performance and are ill-equipped to improve the process, primarily due to a lack of clearly defined metrics and measures. The two retail segments that have the highest adoption of digital returns capabilities are health and beauty, and apparel and accessories. Meanwhile, department stores and consumer electronics retailers lead the industry in return processes and customer support capabilities.
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Additional key findings from the index include:
- 91% of apparel and accessories retailers allow returns to be initiated online.
- 87% of department store retailers allow returns to be initiated via chat.
- 79% of health and beauty retailers provide personalized product recommendations.
- 78% of consumer electronics retailers allow shoppers to print return labels online.
Despite these strategic attempts to strengthen the online returns process, most retailers have significant room for improvement when it comes to meeting shopper expectations. The report found that:
- 76% of retailers display product ratings and reviews on the product pages, while only 37% allow shoppers to provide feedback on specific attributes like size and fit.
- 82% of retailers allow shoppers to return purchases in-store, while only 14% have the capability to schedule return pickup.
- 95% of retailers display order status, while only 23% allow shoppers to track return/refund status.
- 100% of retailers have self-help options for navigating returns, but only 2% provide the option to return purchases curbside.
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These findings highlight the need for retailers to prioritize their returns strategies and invest in technology and processes to minimize the impact of returns on their businesses.
“Retailers have been quick to embrace digital capabilities but have been slow to address the impact that returns are having on their customer satisfaction and bottom lines,” said Amar Mokha, COO of Incisiv. “Our 2023 Omnichannel Returns Index shows that retailers can no longer afford to ignore returns and must take a strategic approach to reducing the cost and complexity associated with returns management.”
The benchmark report provides detailed insights and best practices for retailers looking to improve their returns strategy. From leveraging technology to streamline the returns process to implementing data-driven decision-making, retailers must take a more proactive approach to returns management if they want to maximize profitability.
“The point-of-return is an underutilized customer touchpoint, despite being a pivotal opportunity to preserve shopper satisfaction,” said Michele Marvin, vice president, Appriss Retail. “When a customer starts a return, it becomes the retailer’s job to redirect them toward other products by delivering strategic messaging, promotions, and discounts designed to save the sale. When retailers invest in the returns process, they are guaranteed to see improvements in customer loyalty and profitability.”
Survey Methodology
Incisiv’s 2023 Omnichannel Returns Index is based on insights from its proprietary digital maturity benchmarking methodology, and assesses the digital capability of top retailers across, Search and Discovery, Cart and Checkout, Fulfillment, and Customer Engagement & Service. Incisiv’s digital assessment methodology spans more than 80 returns capabilities and assesses the top 128 brands across nine industry segments: apparel, consumer electronics, department stores, general merchandise, grocery, health & beauty, home improvement, luxury and specialty. Attributes are categorized as table-stakes or differentiating capabilities based on their quantified impact on key digital performance metrics such as average order value (AOV), conversion, and customer satisfaction.
