By Alex Timlin, Senior VP Verticals at Emarsys
For most retailers, the last two months have been all about preparing for 27th November — Black Friday. But there’s another, less well-publicised, date that retail brands should be thinking about this month: 3rd December — “Returns Thursday”.
In recent years, +143% more items have been returned on 3rd December than any other date in the year, as shoppers return impulse items that they bought during the Black Friday weekend.
According to recent estimates, 1 in every 3 shoppers return what they buy on Black Friday, with approximately 30 million unwanted goods being sent back to stores.
For many industries, this sudden reversal of cashflow can represent a huge logistical and business challenge. Take the fashion industry as an example. Despite record sales on Black Friday, in 2018 UK fashion retailers were hit with a £1.6 billion bill, purely as a result of post-Black Friday returns.
And this isn’t just limited to the UK. Customers around the world have shifted buying habits and increased the number of items they return. Today’s shoppers want the convenience of purchasing anywhere at any time, but this impulsive purchasing mentality means that customers are spending less time researching and trying items before they buy. This has led to both an increase in returns, and a consumer mindset that treats returns as part and parcel of the shopping experience.
Returns as a customer experience concern
While Returns Thursday represents a serious logistical challenge for brands, it also poses a great opportunity when it comes to the customer experience.
One of the biggest problems surrounding Black Friday, is that it represents a one-time event. With every retailer offering similar bargains at the exact same time, Black Friday is rarely positioned as an opportunity to build loyalty or to encourage repeat purchases into the long term.
Consumers know that the deals being offered aren’t provided as a personal ‘reward’ for their patronage, and as such the loyalty element associated with more personal discounts disappears.
Given this fact, providing a great customer experience is more important than ever on Black Friday. Stores and sites that create a seamless shopping experience can help to extend Black Friday beyond a one-day event, encouraging customers to revisit in future.
After-sale support is also a major part of this process, with the ability to easily return items being a key consideration for today’s digital customers. According to research from Emarsys, 45% of consumers say that not having a free returns policy is enough to put them off buying something they’re interested in this Black Friday (more than any other factor), while 48% say that free returns is the most important consideration for them — after the size of discount offered.
Who should foot the bill for customer returns?
With £1.6 billion spent on returns by the fashion industry alone, it can be tempting for retailers to push the cost back onto customers — or to discourage returns entirely through complex processes and short return times. To do so, however, is to fundamentally ignore how the retail landscape is changing, and how today’s consumers expect to shop.
While the move to omnichannel retail had already helped to shape this consumer expectation, now the coronavirus pandemic has taken this trend even further. Unable to physically touch or try on products in store, consumers are now more likely to return items than ever before.
As consumer expectations change, and returning items becomes part of the buying process, retailers need to find a way to manage this shift. Penalising customers with high return costs will only alienate them from your brand, while complex return processes can seriously damage your reputation and customer experience.
So where does this leave retailers? If retail brands don’t want to spend a fortune on returns, but also don’t want to limit customer loyalty, how best can they prepare? How can retailers meet their customers halfway and provide a best of both world’s approach?
Here are three steps to consider before Returns Thursday 2020:
1. Provide customers with information up front
Customers don’t want to return the products they buy; but they often have to as part of the online shopping process.
Rather than penalising shoppers, retailers should provide customers with more information during the shopping process. Providing better product information, more accurate size guides and more detailed product photography can all help to minimise the volume of returns — all while increasing customer satisfaction. Photos of product in situ can also go a long way to reducing return rates, as can video content, 3D animations and even AR overlays.
The more detailed, visual information that you can provide to customers, the more likely they are to be satisfied with their purchases and the less likely they’ll be to return them come 3rd December.
2. Personalise your offers and deals this Black Friday
Many of the items sent back on Returns Thursday are the result of impulsive purchases made when shoppers felt under pressure. Once items arrive, however, these consumers realise that they didn’t put enough time or thought into their purchases and ship them back to the store.
Brands need to maintain this level of excitement during Black Friday, but while still providing customers with products they love (and will continue to love). To achieve this, retailers need to invest in understanding their customers. This means making the most of consumer data, and using accurate, AI-powered personalisation to help shape the offers, discounts and deals that shoppers receive this Black Friday. Already, tools are becoming available which use visual recognition AI to analyse the size, pattern, style, colour and shape of products based on their images online. This visual data can then be used to recommend these products to shoppers based on their own unique tastes and preferences, achieving a level of automated personalisation that even Amazon cannot match.
3. Remember returns when measuring success
It’s surprising how many brands don’t factor returns into their advertising costs or customer lifetime value calculations during Black Friday.
As just one example, let’s say you’re a fashion brand with $10m in online sales, but 40% is returned. Facebook Ads Manager and Google Analytics will say that you made $10m, but the CFO’s report will say you made $6m. That’s a $4m gap. Marketers should therefore focus on overall business outcomes and not just marketing performance metrics. This will not only help to provide a more accurate picture during the Black Friday weekend, but will also help brands prepare ahead of the Returns Thursday rush.
By Alex Timlin, Senior VP Verticals at Emarsys
Published 20/11/2020
