Understanding the returns customer

First published by Admin, on 11 August 2020

Returns management

Instead of avoiding the topic of returns management, businesses should let their bottom lines guide their decisions: by establishing profiles of their most and least profitable customer types, they can better weigh in on the true cost of having a returns policy. It might turn out that top spenders buy as much as they return!

Unveiling returns personas
To start off, businesses can create and analyse returns personas by monitoring return rates and net sales. Segment these personas by their usual behaviours, feedback, and other relevant purchase behaviours, and use the information available to identify the returns personas in your customer base. 

Once profiling is completed, businesses can better identify and take steps to build, rectify and manage different returns customer segments. Read on for a list of commonly seen returns personas:

  • The Loyalist
    The Loyalist is the “ideal” returner. Though they are much more likely to return items than the average customer, they also make purchases very frequently. Loyalists can account for approximately 39% of a brand’s revenue - they return undamaged merchandise on time, which allows brands to restock and remarket returned merchandise at full price, within the same season. 
     
  • The First-Time Returner
    Hesitant yet rule-abiding, First-Time Returners are usually responsible for bulk of the advertising spend of direct-to-consumer brands. They are quick to add items to their shopping cart, but usually think twice before committing to a purchase. Offering a convenient and liberal returns policy can thus give these First-Timers the confidence to buy.
     
  • The Fitting Room Returner
    These customers buy multiples of the same item in different colours and sizes, try them on in the comfort of their own homes, and then return what they do not want. The high rate of returns from Fitting Room Returners result in razor-thin margins for brands. Fitting Room Returners place high value on brands that make returns free, easy and without penalties. 
     
  • The Policy Abuse Returner
    Policy Abuse Returners buy with no intention of keeping, and use returns as a way to get something they want for free, such as shipping fees waived or to wear an outfit once to an event.

Putting returns management on a backburner 
Understanding and having insights on consumer return behavior is critical to ensuring profitable growth and keeping customers happy, with the ultimate goal of turning returns into exchanges. If they are merely stored away and not recognised as part of saleable inventory, returned merchandise will compound and lead to reduced profits. 

Establishing a standard procedure for handling returns can help optimise the process and make it fit more seamlessly with the overall brand experience. A convenient and cost-effective returns mechanism can thus maintain retail price points without deterring shoppers.

blu’s hassle-free returns process 
Boost customer loyalty with a frictionless returns process. Making a return can be as easy as verifying the item to be returned, choosing their preferred bluPort location, and dropping off the returns parcel at bluPort. 

With more than 100 bluPort locations islandwide, customers can drop off their returns conveniently at a bluPort along their daily commute. Cost-effective and speedy, our fast turnaround enables retailers to receive returned inventory quickly. 

Returns are the new normal and with the right approach and tools, can become a competitive advantage for businesses. .
 

 


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