Retailers shouldn’t neglect the returns process.
Contrary to popular belief, the retail experience does not end the moment a customer pays for a product. In fact, customers have very high expectations when it comes to returns, refunds and exchanges, and want the reassurance that a retailer still cares about them after they have parted with their hard earned cash. However, our recent After Payment Emotional Experience (APEX) report found that 57% of women claim this process is ‘rubbish’, as did half of men. This is in stark contrast to the 93% of retailers that are confident they excel at their returns policy. So where has this disparity come from, and what can retailers do to ensure customers remain satisfied even when they have changed their mind about a purchase?
Learnings from ASOS.
Firstly it seems with the current state of retail, nothing sparks frustration and anger amongst shoppers like a change in returns or refunds policy. Take ASOS’ recent move to cull some of its 19 million customers accounts because of the change in return rules. Customers found their accounts deactivated as the new rules – which aimed to prevent serial returners taking advantage – came into effect, without fully explaining the reasons as to why their account was chosen.
In this situation, it would’ve been beneficial for ASOS, to be clearer and more open with their customers. It’s undeniable that ASOS is hugely popular, however, this move is likely to impact loyalty, as a quarter of people from our APEX report state that a poorly explained returns policy is the factor most likely to make them avoid a retailer. This goes to show that no matter how big a retailer you are, you really need to consider your returns policy and how it is communicated.
Use data to improve the process.
Ultimately though, returns and refunds are an inconvenience to customers. However this process can be significantly improved by interrogating shopping behaviour alongside payment data. Tokenisation is absolutely key to this capability. Tokenisation replaces a customer’s bank account or card details with a unique identifier, a “token”, which prevents sensitive information from being shared, yet tracks a customer’s transactions online and offline. This gives retailers a 360-degree view of customer behaviour, from a single point of view and is incredibly valuable to retailers as they are able to converge multiple data points, irrespective of channel, offering them the opportunity to capitalise on third party marketing data. For example, by understanding where and when a shopper makes repeat purchases and combining that with other areas of scrutiny around personal details, likes and dislikes, a retailer can deliver relevant, personalised communications that add real value. When it comes to returns, tokenisation provides customers with the flexibility to return products where and when they want to. So if something is purchased online, tokenisation allows them to return in store, in a different country and currency, completely hassle-free.
Over time, as more information and insights are gathered, this data becomes even more powerful as a fuller picture of customer spending habits and preferences becomes clear. These insights coupled with a reduction in data silos enables retailers to become truly omni-channel with a great customer experience sitting squarely at the heart. By becoming a true omni-channel retailer, this approach delivers a long term competitive advantage, unlike the short term, short sighted, pricing strategies that have dominated many of today’s retail strategies and been intrinsic in the demise of others. As a key emotional touchpoint in the relationship between retailer and shopper, when done correctly and combined with a suitable long term strategy, payments have the potential to become a key competitive and brand differentiator.
It’s also worth retailers looking inwards at the retail systems they use, as a good payment system can power the streamlined returns processes that customers demand. Professor Dr Phil Klaus – Professor of Marketing and Customer Experience at the International University of Monaco believes that although “customers may not realise it, payments influence the post-purchase areas they care about most.”
So, what can retailers do?
Returns and aftercare procedures are causing unnecessary friction and many shoppers feel that retailers stop caring about them once they have paid. Therefore, retailers must deliver swift and significant improvements in order to retain loyal customers and not put off new ones with a lack of basic services, which should be the standardised norm. Retailers need to start delivering a positive After Payment Emotional Experience (APEX), with refreshing returns policies acting as a starting block.
To find out more about the importance of refunds and returns when it comes to customer experience, then click here to download our full APEX report.
July 26, 2019