By using these four strategies, retailers can engage and connect with consumers as they mitigate the deluge of holiday season returns.
Black Friday and Cyber Monday have come and gone, which means the frenzy of price-cutting and promotions can mercifully end. But now what? ‘Tis the season of the holiday gift return.
Just as much as consumers may dread boxing, labeling, and shipping their unwanted items, marketers are cringing at the potential loss in revenue. Last year, Americans returned about $260.5 billion worth of merchandise – or eight percent of all retail sales – according to the National Retail Federation. This holiday season alone, nearly one-fourth of all e-commerce sales are expected to be returned.
You might be tempted to encourage customers to buy more during the return season as a way to soften the blow – and you certainly can. But, you also don’t want to risk turning them off as you seek replacement revenue.
Here are some best practices to ensure that you are rewarded with increased customer loyalty and sales growth during the return season.
1. Start with a warm up
Connect with your consumers’ emotions and alleviate their stress, before you come on strong with a sales message. Consumer Reports published a survey which revealed that the two most aggravating return issues encountered by gift returners was getting store credit instead of cash and inconveniently located stores.
If your customers face these problems, one solution is to provide instructions that are easy to understand, including simple credit redemption directions.
Other common customer return issues include lost receipts and opened packages that might not be accepted by retailers. Companies that don’t require receipts or unopened packages for returns should make that clear in a special message that alleviates any fears your customers might have.
2. Avoid the awkward upsell
After you’ve calmed your customer’s nerves, feel free to market to them – just be sure to avoid the awkward upsell. People buy gifts for others during the holidays, so upselling during the return season becomes much trickier. It is best to avoid blanket upsell messages like,“Buy a second one and get 50 percent off.”
Be careful with algorithms that promote items that are often purchased together. These messages won’t work if the person you’re targeting was the gift giver. Instead, data-mine each customer’s longer-term history and see if you can categorize their purchases. Any holiday season purchase that falls way outside a customer’s normal activity might be best ignored.
Alternatively, create a window between Thanksgiving and December 24 to treat those purchases differently. Send consumers promotional messages based on the assumption that they didn’t buy the items for themselves.
Don’t forget to glean information about people visiting your return policy page. Consider asking those who downloaded a return receipt if they are returning a purchase for themselves, or if it was a gift.
3. Don’t let a first encounter end with a return
People that are returning gifts may be encountering your brand for the first time, so it is important not to let this experience end on a low note. Try to capture the returner’s email address. Once a product has been returned, send a customer satisfaction survey with a discount for their next purchase.
Outdoor outfitter, The North Face, is bold enough to encourage people returning items to sign-up for their loyalty program right as they start the online return process.
4. Create a great return policy, within reason
You could be risking brand loyalty with people returning holiday gifts, if your direct competitors have a much better return policy. A study from comScore found that 66 percent of customers look at a return policy before making a purchase online. If a customer’s first experience with your brand is returning an item, it can affect their lifetime loyalty.
Zappos famously gives you 365 days to return unused items, which is better than many other shoe retailers. Many other retailers are even more lenient with their return policy. L.L. Bean allows returns at any time, used or unused, no questions asked. Its direct competitor, REI, offered a similar return policy, until social media chatter informed consumers that they could get new replacements for all their old REI gear at no cost. After the word got out, REI switched to a one-year return policy. Meanwhile, L.L. Bean continues to maintain its flexible return policy.
The holiday gift return deluge is a fact of retail life. Retailers can only optimize the return experience so that it doesn’t disrupt the relationship they are building with existing customers. However, retailers can and should use the return experience as a positive moment of truth early on in the engagement process for first-time customers.
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