Reducing eCommerce Returns: The 2020 UK Report

A comprehensive consumer survey on what's driving returns, including strategies for preventing them and how to stop them from affecting LTV.
INTRO
Customer returns: A threat to brands of all sizes

There’s not a single area of business not affected by returns, from engagement rates, to brand sentiment, to overall profit: and the problem is only getting worse.

In fact, some analysts predict that by 2023, the rate of UK returns will have grown by more than 27%, totaling £5.6 billion [Inviqa].

In this comprehensive survey, we dug deep to determine the top reasons why shoppers make returns. We then compiled data-backed strategies to reduce returns, as well as how to drive overall LTV and engagement despite them.

Table of Contents
01
Survey Methodology & Audience Data
02
An eCommerce Nightmare: The Rising Rate of Returns
03
Fighting Returns With Reviews & UGC
04
Driving LTV After Returns With SMS
01
Survey Methodology & Audience Data
02
An eCommerce Nightmare: The Rising Rate of Returns
03
Fighting Returns With Reviews & UGC
04
Driving LTV After Returns With SMS
Survey Methodology & Audience Data
Chapter 01
Survey Methodology & Audience Data

In July 2020, Yotpo conducted a survey of 1000 eCommerce shoppers in the UK across four different demographics: Gen Z,  Millennials, Gen X, and Baby Boomers. 

Key audience data

  • Of the shoppers polled, nearly 42% said that they do most of their shopping online, with 11% claiming they do all of their shopping online.
  • Clothes and accessories are far outshining every other industry as the number one thing people are buying right now (87%), followed by food and beverages (69%), cosmetics and skincare (52%) and home and garden (50%).

  • Unsurprisingly, clothes and accessories dominate as the most commonly returned items (50%).
  • 63% of survey respondents are shopping online more frequently since the COVID-19 pandemic began.
An eCommerce Nightmare: The Rising Rate of Returns
Chapter 02
An eCommerce Nightmare: The Rising Rate of Returns

To determine the biggest factors influencing eCommerce returns, we first took a step back to determine what drives shoppers to purchase in the first place.

When asked to rate the importance of the following options when making a purchase, 76% of respondents cited “detailed product descriptions” as “very important.” This was followed by “return and refund policy” (69%) and “customer reviews” (59%).

A particularly interesting finding is that among Gen Z, the percentage of respondents who rate customer reviews as “very important” is higher than the overall average of 59%; it jumps up to 67%. For Millennials, 68%.

Moreover, when asked to rate the importance of customer photos, 33% of Gen Z rated this as “very important”; for Millennials, it jumps to 35%. Both are higher than the overall average of 27%.

Next, we got right to the root of the issue, asking respondents for the top three reasons they made a return.

Shoppers overwhelmingly chose fit issues (66%) as the number one reason for returning an item, followed by products being different than described (39%) and appearing different in person than they did online (36%).

The main takeaways

The rising rate of returns may seem dire, but there’s hope.

The data we gathered offers compelling evidence that a combination of customer reviews and user-generated content (UGC) can help customers make the right purchase the first time around, stopping the returns process in its tracks.

In addition, when returns do happen, ensuring that the process of returning an item is as positive as possible is essential. While a flexible returns policy is important, reengaging a customer who has made a return through SMS can transform a dissatisfied returnee into a brand-loyal, repeat purchaser.

Fighting Returns With Reviews & UGC
Chapter 03
Fighting Returns With Reviews & UGC

In the fight against returns, it naturally follows that the best tactic is guiding shoppers to the perfect product the first time around. You only get one chance to make a good first impression; when asked, “If you bought online from a brand for the first time and you’ve had to make a return, how likely is it that you’ll buy from them again?” 30% of our survey respondents said “not likely.”

When it comes to helping customers make the right purchase decisions, it’s critical to bridge the online-offline gap with reviews and ratings, as well as user-generated photos and videos. All of these can help relay important product information, while simultaneously conveying a sense of authenticity, helping potential buyers to envision how your products might look in real life.

Strategies

1.) Collect more reviews with SMS review requests

Take advantage of SMS’ high CTR by requesting reviews via text. SMS review requests see a 66% higher conversion rate compared to email review requests. 59% of respondents polled (with higher numbers for Millennials and Gen Z) cited customer reviews as “very important” in inspiring a purchase decision. If you’re collecting high quality reviews and UGC and displaying them intelligently onsite, you can help shoppers avoid the most common returns pitfalls.

2.) Answer your customers’ questions

Make it easy for customers to ask questions by offering a Q&A section for all of your products. With the ability to get quick and reliable answers from both past buyers and your team, you’ll help bridge the gap between how your product looks or is described online versus how it may actually appear on a buyer’s doorstep. This increases the likelihood that a shopper will make the right purchase the first time around.

3.) Surface relevant reviews

An on-site Reviews widget with AI technology allows you to automatically present topic filters according to their prominence in reviews. This enables shoppers to easily sort reviews by the topics that interest them the most, such as “Delivery,” “Size,” “Price, “Skin Type,” and “Fit.” Since problems with fit emerged as the number one reason why buyers return items, this can help nip that issue in the bud.

4.) Engage with on-site galleries

Help shoppers avoid the common returns pitfalls of “it looked different in person” and “it was not as described” with galleries of real customer photos and videos beautifully displayed throughout your site and social channels. Visual UGC is the best tool in your arsenal for bridging the online-offline gap for potential buyers.

Taking it a step further: Bring products to life with video

44% of people are more likely to buy a product after watching a video about it. But a brand-produced video does not deliver the same impact as one recorded by a fellow shopper.

Video reviews are an even more powerful way to help shoppers visualize your product in real life, helping to solve for the two of the top three factors driving returns. By collecting, moderating and publishing user-generated video content, you’ll make it easier for potential buyers to envision your products in real life, helping to resolve concerns over the product being “different” than how it was described.

Brand spotlight: Green People

Skincare brand Green People needed a better way to guide shoppers to the right products, which was not the easiest task considering the company’s multiple product lines across skincare, cosmetics, hair care, dental and more.

Green People helped solve this problem by implementing Yotpo reviews onsite. To get the absolute most out of these reviews, they added Custom Questions to solicit specific, highly useful information from customers, including age, duration of time using the product, skin type and much more. The brand also added Smart Filters to product pages to empower shoppers to search for the reviews most relevant to their specific concerns. Green People next enabled Yotpo’s Q&A widget, so that they could respond directly to customer questions. Finally, they collected photos from reviews and Instagram to showcase on product pages.

People with dry hair are now able to confidently buy the shampoo aimed at their needs, and that’s all because of informative reviews, Q&A and photos, which we are able to collect and then intelligently display on our product pages,” raves founder Charlotte Vohtz.

 

Driving LTV After Returns With SMS
Chapter 04
Driving LTV After Returns With SMS

Even if you’re doing everything right, there are certain situations where returns are unavoidable. This is a well-understood “price of doing business” in the fashion industry where — according to our 2019 Reducing Returns survey — 61% of fashion shoppers claimed that they deliberately ordered more items than they intended to keep. 

In our most recent survey, 39% of consumers across all industries said they sometimes buy more products than they intend to keep, due to the ease of returns. For Millennials, specifically, this shoots up to 47%; for Gen Z, 49%. 

So what’s the solution? Make the returns process as difficult as possible, to discourage shoppers from buying with the intent to return (i.e. buying multiple sizes of the same product)? It’s actually just the opposite. 

Embracing Returns: Draper James

Contemporary American fashion brand Draper James — “steeped in Southern charm, feminine and pretty” — is particularly beloved by shoppers for its wide variety of dresses.

Draper James originally turned to Yotpo to use reviews to combat returns, since, “dresses are a product category that naturally has a bit of a higher return rate,” according to Helen Nightingale, the brand’s Director of eCommerce. Reviews would accompany the robust sizing and fit guide featured next to each dress on the Draper James site.

But Nightingale went on to note an interesting phenomenon that she was seeing among returnees:

“We do have an interesting pattern, where we see that customers who make returns are actually more likely to reengage with the brand long-term than a customer who just purchases something one time and then they’re done.”

The main takeaway

As Draper James experienced, returns are not necessarily the kiss of death for your business. In fact, based on findings from our survey, we have compelling reasons to believe that offering flexible return options and reengaging your returnees via SMS can lead to overall customer satisfaction and higher LTV.

Optimising returns: Be flexible

When asked what their preferred way to return an item was, 39% of respondents chose “drop the package off at a post office.” This was followed by “have the package picked up by mail/courier” (33%) and “in-store return” (16%).

We followed up by asking if they would still buy from a store, even if it didn’t offer their preferred return method. Almost 20% said no. When you combine this with the fact that 44% of participants claimed that they had abandoned an online order because of the return policy, it becomes abundantly clear that a flexible policy is an essential part of creating a better experience for consumers.

Draper James understands the importance of letting customers choose the returns option most convenient and best-suited to their needs. They offer three different options for returning or directly exchanging purchases — in person through Happy Returns, by mail or in-store — greatly increasing the odds that a shopper will be able to find their preferred return method.

Snapshot: The Returns Experience

  • Over half of respondents polled said a negative returns experience resulted in them not shopping with the retailer again.
  • 90% are more likely to order from a store that makes returns easy.
  • When asked, “would you order from a store that charges a fee for returns,” 54% said no.

Reengaging through SMS

Post-return is an optimal time to start a conversation with a customer. 51% of consumers are interested in being able to text with their favourite brands according to another recent Yotpo survey. When combined with the average SMS open rate — a whopping 98% — you can easily see how a personalised, thoughtfully-tailored message sent at a critical moment can transform a dissatisfied returnee into an engaged, repeat customer.

Apologise to the customer for this disappointing purchase experience, and ask them why they returned their purchase. Then, offer them an incentive to reengage with your brand based on why they returned in the first place. Was the item broken? Offer to send them a new one free of charge. They bought the wrong size? Give them 10% off their next purchase. Didn’t like what they bought? Suggest some other product options and send a coupon for five pounds off.

Conclusion

The rate of customer returns — which is only growing worse year by year — is one of the single biggest dangers for fledgling and established eCommerce brands alike.

The good news is that your brand has the power to combat returns head on, by collecting and displaying influential customer reviews and UGC at crucial points in the customer journey, helping lead shoppers to the perfect product the first time they visit your site.

Furthermore, when returns are unavoidable, you have the ability to turn a disappointed returnee into a satisfied, loyal customer by reengaging with them via personalised SMS messages.

Learn how Yotpo can help you fight returns and drive LTV with reviews, UGC and SMS marketing.

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