July 10, 2020
First-time ecommerce shoppers rely on returns
Those customers who are venturing into ecommerce for the first time have a stronger focus on returns than other demographics – and that’s where the industry is arguably weakest.
The message is loud and clear: eCommerce is booming. The rapid rise in online shopping has tested retailers, posts and carriers to their limits and shows no sign of easing. Headlines tell us that it’s like ‘Black Friday every day’. Adaptations and improvements have been constant in the rush to get goods into shoppers’ homes and hands as easily and efficiently as possible.
The Business of Fashion is just one source concerned by the challenges facing an industry that has had to adapt to changing consumer habits at speed, reporting “mountains of returns” and brands “crumbling under an influx of inquiries”. And with first-time online shoppers reporting that they have no plans to fully return to traditional bricks and mortar outlets, further modifications must come – and quickly – if retailers are to maximise on the future potential of these new online customers.
Research conducted recently by RetailEXPO cites that over a third of consumers are unhappy with complex returns processes, while many more (56%) are much more likely to shop with online retailers that offer in-store returns. This suggests that there is much work to be done to instil confidence in new shoppers. At Doddle, we commissioned research from YouGov in May of this year to learn how returns impacted shopper loyalty and preferences. We found that older demographics were most likely to say that returns were important to their opinion of retailers, with 87% of 45-54s and 91% of over 55s agreeing.
Statista data from 2019 suggest that just 50% of over 55s had made an online purchase in the last year. They are the demographic most likely to have been forced to begin shopping online for the first time by the pandemic, and they care most about returns, viewing them as a key indicator of trustworthiness and the kind of service they are to expect.
Retailers who have already enabled an omni-channel purchase lifecycle are rightly patting themselves on the back, as they already have systems and processes in place that are rapidly scalable – and already have the relationship with consumers who might be new to ecommerce thanks to their offline presence.
Making it easy for your customers is a no-brainer and something that retailers are (mostly) expert at. However, their focus has been primarily on getting goods into customers hands, rather than giving them an easy means of return.
The problem is that when money is tight, spending decisions are rarely frivolous. That’s true for new and returning ecommerce customers alike. Their purchases can often be heavily affected based on how quickly they can be recompensated in the event of a mistake,or how much it is likely to cost them if the product isn’t right for them. This kind of reverse decision-making in shopping makes free delivery and returns appealing, but also puts an emphasis on the ease of the overall process. Arranging a pickup or making a quick return via a local convenience store, for example, often represents a far faster and less costly process for customers.
More shopping means more returns. Which sounds obvious, but Google reports that as shoppers find retailers with whom they feel confident and have a proven returns process that fits in with their lives, they begin to spend less in one shop, but buy more frequently. On the face of it, this might seem frustrating and inefficient, as the same customers are making multiple purchases and returns separately, but as Google points out, from now on retailers will need to adapt and adopt a global outlook that is coupled with a response to local demands on customer terms. This might translate into offering multiple ways to return, made clear at the point of purchase and including a network of local PUDO points. However you look at it, the shopper sets the bar.
Ultimately, these new ecommerce shoppers are here to stay and their spend will only increase as time goes on. The experiences they have in their first few purchases will have a lasting impact on their loyalties. This has the potential to be a period where incumbents leverage their offline relationships with customers to great effect, or alternatively where digital natives find their core online retailing expertise helps them to steal market share in audiences who have traditionally been unavailable. In either case, the reassurance and loyalty built by convenient returns will be crucial to building long-term with shoppers new to ecommerce.