Securing customer loyalty is essential for enduring business prosperity. Retailers are increasingly adopting strategies to nurture this loyalty, and one compelling approach is the provision of complimentary return policies. A recent study by SAP Emarsys Customer Engagement revealed that 72% of consumers stay devoted to brands that offer the convenience of free returns. This statistic highlights the critical role that a brand's approach to returns plays in cementing a consumer-focused shopping experience.
The research conducted by SAP Emarsys Customer Engagement surveyed over 2,000 shoppers in the United States and revealed compelling insights regarding the impact of free returns on customer loyalty. The study found that 88% of US consumers have stopped shopping with a retailer due to the introduction of a paid returns policy. Furthermore, more than half (54%) of shoppers actively avoid retailers that charge for returns.
The rate of returns continues to rise, with 84% of shoppers having returned items over the past 12 months. However, it is essential to note that not all returns are genuine. The study discovered that nearly a quarter (23%) of consumers admit to "wardrobing," a practice where shoppers purchase items to return them. This highlights the need for retailers to address the underlying causes of returns and not just manage the symptoms.
To combat the issue of excessive returns, many retailers have implemented returns fees. However, the research suggests that this approach can hurt customer loyalty. The study found that 49% of customers are less loyal to brands that charge for returns. This finding indicates that retailers must strike a delicate balance between reducing returns and maintaining customer loyalty. Furthermore, many customers (54%) prefer not to return items. They expect retailers to "get it right the first time," emphasizing the importance of accuracy and personalization in the shopping experience.
Personalization emerges as a powerful tool for minimizing returns and fostering customer loyalty. The SAP Emarsys Customer Engagement study found that 77% of shoppers prefer brands offering personalized offers. Retailers leveraging customer data, such as return behaviour and wish lists, retailers can tailor their product selection and marketing materials to meet individual needs.
Retailers that embrace personalization have seen a decrease in returns. The study revealed that offering more personalized product recommendations and deals can reduce the rate of returns. Additionally, customers desire an online experience that resembles shopping in a physical store, where personalized recommendations and deals are readily available. For brands utilizing advanced tools like Customer Engagement Platforms, Customer Data Platforms (CDPs), and artificial intelligence (AI), retailers can better understand customer preferences and shopping habits, thereby curbing returns.
To deliver a truly personalized experience, retailers must leverage the power of advanced technologies. Understanding customer behavior and return patterns is crucial in tailoring the shopping journey. For example, a customer may purchase many items, but if a significant portion of those items are returned, it indicates a different story. Personalization enables retailers to identify these patterns and make data-driven decisions to enhance the customer experience.
With innovative platforms like Emarsys, retailers can accelerate their time to value by quickly onboarding data and channels to deploy cross-channel campaigns. The Emarsys customer engagement platform empowers marketers to build, launch, and scale personalized, cross-channel campaigns that drive business outcomes. With the ability to provide real-time, 1:1 personalization, retailers can build trust, loyalty, and lasting customer relationships.
Targeted marketing and personalized recommendations are vital in reducing returns and improving customer satisfaction. The study found that 26% of consumers believe that a more personalized product selection can reduce their rate of returns. Additionally, 24% of shoppers stated that more personalized marketing materials would decrease returns. Retailers can curate a product selection and marketing materials that align with individual tastes and needs, fostering a sense of connection and reducing the likelihood of returns.
