Send it back, Jack!
Everybody loves a good discount. In 2023, shoppers are navigating for the best deals and saving more than before. Women especially are grabbing great discounts to maximize savings. This chapter covers who's getting the best deals, where they're shopping, and how much they're saving.
In a shifting economic climate, returns provide a lens into evolving consumer priorities. Here, we explore the patterns in return behaviors across age groups, genders, and platforms, highlighting the influence of deliberate purchasing and discounts' effect on return rates.
In this chapter, you will need to understand the difference between two important measures:
1. Return rate
Measures the percentage of items being returned
2. Return to purchase
Measures the monetary value that is being returned compared to the full purchase amount.
Return to Sender?
E-commerce sees 20% fewer returned items since 2022
Post-pandemic, online shopping returns have been a hot topic. In the Nordics in 2023, the average e-commerce return rate across all sectors was 6.6%, marking a significant 20% decrease from 2022. Simply put, people are returning fewer things that they buy online.
It's natural for e-commerce returns to decrease when in-store returns increase due to two key factors: during the pandemic, many physical stores were closed, and now, post-pandemic, an increasing number of companies have been optimizing the use of their stores to promote in-store returns. This cost-effective approach contributes to enhanced profitability and higher foot traffic in the stores.
And many companies, especially fashion resellers, are increasingly scrutinizing and managing unprofitable customers with high return rates. Another reason for lower return rates is the introduction of return charges. Companies have started analyzing the reasons behind product returns to prevent unnecessary returns. Many retailers now understand that the customer experience does not end after the delivery of the product; they must take responsibility for the entire buying journey - not risking losing the consumers' trust.
CMO at Easycom
In-store returns rise
while online rates decline
Many retailers have introduced return fees and promoted click-and-collect over the last few years, strategies that might positively impact sustainability. However, it is essential to note that despite this trend reversal, e-commerce returns remain more than three times more frequent than those in physical stores.
While consumers have become more thoughtful about their purchases, they have continued to return items. Interestingly, there has been a shift: in-store return rates have increased by 5% since 2022, while e-commerce returns have decreased.
The return-value decreases
Return rates online are seeing a decline, contrasting with a rise in physical stores. These numbers combined show that consumers across all age groups return fewer items in 2023 than in 2022. Additionally, there’s a noticeable trend in the value of returned products; cheaper products were more commonly returned this year than the previous year.
Discounted items are
less likely to get returned
A discount, whether on a sale tag or as a membership reward, does more than attract buyers; it appears to make them more committed to their purchase. Consumers are almost 65% more likely to reconsider and return full-priced items than those sold at a discount.
Breaking down the numbers, in the year to date, 2023 has seen a return rate of 1.4% for discounted items. In contrast to non-discounted items, they have a higher return rate of 2.3%.
Interestingly, even though discounted items are less likely to be returned, their return rate has jumped 130% over the last two years. It suggests that while shoppers buy more discounted items, they are also increasingly thoughtful about the value they get for their money.