Returns can be expensive for an e-commerce business, but having a restrictive returns policy can limit sales. A luxury retailer of customized products was concerned about their low e-commerce penetration and wanted to shift more volume online. The retailer hypothesized that the returns policy was the limiting factor to online growth and wanted confirmation.
A diagnostic indicated the no-returns policy was a factor affecting online sales, yet there were several others. All pointed to customer purchase anxiety. A physical retail lens was originally used to create online store policies. Having consistent policies across both channels is important. However, businesses must focus on how to reduce purchase anxiety for each sales channel.
The retailer implemented their no-returns policy because each item is customized and they were concerned about having products that could not be easily resold. This is a common concern, yet there are alternative solutions that provide confidence to a customer and simultaneously protect business profitability. Following are a few solutions:
Virtual try-on software for the customer to see themselves wearing the product
Virtual consultation appointments so the customer receives expert guidance
Physical resin models that are shipped to the customer, so the customer gets a sense of size and scale in person
Balanced returns policies that mix store credit, restocking fees, and defined time windows
How the brand presents itself online should be consistent with the in-store brand presentation. The physical store offers personal consultations and the ability to try on products for sizing, so the online store should find related ways to build a customer’s confidence in their purchase. Because the business is a luxury retailer of customized products, they should not be expected to have a frictionless returns policy. However, the business should embrace the uniqueness of their products and highlight those attributes through offerings that reduce the buyer’s risk and uncertainty.
A balanced returns policy is a key way for businesses to reduce purchase anxiety. Matching your returns policy to the unique circumstances of your business helps the customer receive consistent brand signals, much like we discussed recently when pricing your products or evaluating your shipping approach.
What have you implemented to reduce customer anxiety about online purchases? What factors did you incorporate to determine your returns policy?
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