Returns for Retail Business: Study of Business Strategies

Let’s be honest: You want to send back that highlighter-yellow sweater you got for Christmas, but don’t want to go through the hassle by Morning Brew. Well, you aren’t the only one.

Nearly all shoppers (95%) said a poor returns experience will make them less likely to buy from a brand again, according to the 2022 Omnichannel Returns Index from market research firm Incisiv and Appriss Retail.

More is on the line for retailers now, as shopping continues to shift online. E-comm purchases are returned at least 3x more frequently than in-store buys, explained Giri Agarwal, Incisiv’s chief strategy officer.

Why does it matter??He called out the costs of the Es: environmental (more packaging and transportation), economic (prices passed onto consumers), and emotional (the potential for more poor experiences).

• Still: “Returns aren’t all bad,” Agarwal told Retail Brew. They’re part of the business, but need to be “optimized” to cut down on the ones that should’ve never happened to begin with, he noted.

Show me:?Apparel is the segment furthest along when it comes to “returns flexibility,” the report found.

• All 28 companies assessed in the space let orders be returned in stores, and 90% allow replacement or exchanges.

That makes sense to Agarwal, given the high return rates of the category. But he was surprised by “how relatively immature everybody is.”

Agarwal noted that Amazon is really leading the charge on returns, thanks in part to its thousands of free drop-off options. Many companies will be forced to follow in step.

• “They’re going to push traditional retail to begin to match up to that expectation,” he said.—KM

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