Busting 5 Common Returns Myths – Returnalyze Returns Analytics

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Retailers take note—these five myths about returns can have a serious impact on your business.

It doesn’t really matter what a retail business is selling, it’s probably had its share of returns. That’s because returns happen. Sometimes a customer simply changes their mind or a product is damaged. Whatever the case, it’s probably fair to say that shoppers have been returning items just as long as they’ve been buying them.

So, as a business, you probably know all there is to know about returns. Right? Think again.

There are a shocking amount of misconceptions about returns. While some of these myths are simple oversights, a lack of understanding regarding returns data ultimately keeps these myths alive. At Returnalyze, we’ve analyzed the data and have the credibility to clarify these misconceptions.

Read on and discover five returns myths that every business should know about.

MYTH: Bracketing is Bad For Business

Bracketing is when a customer purchases multiple sizes and variations of an item, selects their favorites to keep, and then returns the rest to the retailer. This behavior ensures that a customer will receive their ideal product the first time, rather than returning a version that didn’t work and risk it being unavailable later.

While that may seem bad for business, we’ve found that its impact isn’t as damaging as you might think. Bracketing can even provide opportunities for increased net revenue. While consumers who bracket for sizing purposes are much less likely to keep multiple sizes of the same product, retailers often experience minimal returns from customers who bracket for color or style.

For example, when returns data identifies size bracketing, providing additional fit and sizing information can reduce those returns. Conversely, sometimes offering additional product variations can encourage customers to bracket for style and keep more than one item.

MYTH: Returns Are Only A Logistics Problem

Believing that returns are only a logistics problem isn’t just incorrect, it opens the door for net revenue losses. Yes, returned items can require additional labor, impact warehouse utilities, take up valuable warehouse space, etc. However, the impact that returns have on the customer experience and overall loyalty can’t be overstated.

For example, imagine that a garment has a high return rate. Yes, the increased returns will impact logistics, but if the issue isn’t resolved then the damage will quickly extend beyond logistics. Not only can it diminish the lifetime value of loyal customers, but it can damage a brand’s reputation and deter new shoppers as well. In addition, any marketing efforts that include that garment may see a decreased ROI.

 

MYTH: Returns Negatively Impact ALL Customers

Customers return products for a wide variety of reasons. Whether it’s an unwanted return (damaged item, size mismatch, product quality issue, etc.) or an acceptable return (customer changed their mind or didn’t like the product), each return transaction provides opportunities.

When a customer simply changes their mind about a product, making the return process easy creates a positive experience that can encourage loyalty. On the other hand, when a product has a high return rate because of a defect, solving the issue communicates to customers that their opinions matter and that a business is willing to act on those opinions.

Returns will always be part of retail. When businesses understand the different types of returns, whether acceptable or unwanted, they can use that information to increase customer lifetime value and net revenue.

MYTH: Customers Can Read Reviews So They Don’t Need A Size Guide

Surprisingly, retailers that offer clothing, apparel, and footwear often don’t include detailed sizing charts. While reviews can offer insight into fit and sizing, customer reviews can be vague or inconsistent. Ultimately, this can lead to higher returns and negative consumer experiences.

First, a lack of sizing information creates too many opportunities for incomplete transactions. While shoppers can and do read product reviews, having to dig through all of that information takes time. During that time, they could lose interest, become overwhelmed, decide to shop with a competitor, etc. In addition, having detailed sizing information makes it more likely that they’ll purchase the correct size during their first transaction.

So, along with speeding up the buying process, providing sizing information can create a better customer experience and promote loyalty.

MYTH: I Can’t Reduce A Return Rate That’s Already Low

While we understand the desire to work with certain benchmarks, it’s often more important for a business to pursue the full opportunity which would be better than an industry benchmark. Even small reductions in return rates can result in materially increased net profits and improved customer experience. By analyzing granular returns data, even low return rates can be further reduced and have a meaningful impact.

It’s also important to remember that there will always be high-returning items well above the overall benchmark that the business should act on. Looking at returns data will identify those pockets of opportunity where returns are high, even if the overall return rate is low.

Moreover, returns data can be used to generate predictive models to anticipate returns issues and work to prevent them before they turn into a much bigger problem. Both high return rates and low return rates provide valuable data that can be used to optimize and anticipate many aspects of a business’s operations.

Returns will always be part of retail. When businesses understand the different types of returns, whether acceptable or unwanted, they can use that information to increase customer lifetime value and net revenue.

 

Returnalyze | Use Returns Data to Improve Your Business

We don’t just measure returns. At Returnalyze, we help brands control their returns by expertly analyzing the data, identifying insights, and generating strategic solutions to improve multiple levels of their business.

Access to our Intelligent Dashboard allows our retail partners to track their returns and explore specific trends, outliers, impact, and so much more. Granular data of that nature is only as good as the experts that analyze it though. That’s why a partnership with Returnalyze comes with step-by-step guidance and analysis from our data experts.

If you’d like to see how our intelligent dashboard can help you take control of returns, schedule a demo or contact our team today.

5 Ways Returns Data Improve Inventory Management – Returnalyze

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While returns can increase inventory carrying costs, returns data can be used to improve inventory management while reducing expenses.

 

Behind every successful retail business is a well-oiled inventory management system. The correct amount of materials and products are always ordered, they’re properly received and stored, orders are efficiently packaged and shipped, and everything is meticulously tracked. Unfortunately, from high-profile brands with large inventories to small start-up companies with minimal inventory, this perfect scenario rarely occurs.

Whether it’s from inventory distortion (out-of-stock and overstock)—which rose from $ 1.1 trillion in 2015 to $1.8 trillion in 2020 according to IHL Group—or simply poor management strategies, even the smallest inefficiencies can quickly cut into a business’s bottom line.

While returns can initially increase inventory carrying costs and reduce profits, returns data provides invaluable insights that help create targeted solutions and lead to inventory management savings.

The Impact of Returns on Inventory-Carrying Costs

Carrying costs are one of the biggest challenges when it comes to inventory management and returns can make it even more complex. While it varies by both the size and industry of the business, holding costs usually total 20-30% of the total inventory value in the best of times. When products or brands have high return rates, however, those costs can skyrocket.

A single returned item can require additional labor, impact warehouse utilities, returned inventory can take up valuable warehouse space, etc. Additionally, returned items increase risk-holding costs since returned items can depreciate, become obsolete, etc.

While some returns are allowable—such as those from consumers who simply don’t like a product—minimizing returns is an essential part of improving inventory management. And analyzing returns data is the first step.

Returns Data Helps Reduce Inventory Management Expenses

Returns data can be used to improve inventory management in a variety of ways:

 

1. Returns data can help forecast the inventory required to meet demand.

Accurate inventory forecasting ensures that a business will have enough products to meet demand without having to hold excess inventory. While keeping less inventory on hand can reduce risk-holding and warehousing costs, it can also increase the likelihood of stock-outs. Returns data, however, can provide insights that improve the accuracy of inventory forecasting since, in many cases, returned merchandise can go back into inventory.

 

2. Returns data can be used to optimize warehouse space.

When products aren’t performing well, they can take up valuable warehouse space that would be better utilized by stronger-performing products. Returns data can not only identify poor performers but it can also be used to identify categories that are likely to perform well and should receive more warehouse space.

 

3. Returns data can be used to help negotiate terms with suppliers.

When negotiating terms with suppliers that incentivize good returns performance, returns analytics are invaluable. It can help avoid unfavorable deals which lead to the retailer bearing a large share of the cost of returns (such as a large quantity of unsellable merchandise).

 

4. Returns data helps retailers collaborate with suppliers on product improvements.

By identifying the driving factors behind returns, retailers can work with suppliers to improve products as well as improve product specifications, packaging, instructions, web copy, etc. As this will lead to greater sales for both the supplier and the retailer (as well as more efficient use of warehouse space), this is a win-win scenario for both parties.

 

5. Returns data can improve warehouse staff management.

Accurate forecasts of sales and return volumes will allow businesses to set appropriate staffing levels. That means minimal staff when products are predicted to move slowly and additional staff when appropriate. Overall, the costs associated with labor will be used more efficiently.

Returnalyze Builds Targeted Inventory Management Solutions

The Returnalyze Intelligent Dashboard provides the detailed information necessary to identify returns issues that can add costs to your inventory management. In order to identify targeted solutions, however, that data must be expertly analyzed.

That’s why a partnership with Returnalyze also comes with step-by-step guidance from our expert data analysts. We’ll work with you to leverage returns data in order to identify issues, opportunities, and develop targeted solutions for inventory management savings.

If you’d like to see how our Intelligent Dashboard can help you improve inventory management, schedule a demo or contact our team today.

5 Ways Returns Data Can Optimize Influencer Marketing – Returnalyze

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When returns cut into profits from influencer sales, it’s time to look at the data. Learn 5 ways returns data helps businesses optimize their influencer marketing efforts.

While Shopify has referenced data that shows “the ROI of influencer marketing is 11x greater than some types of digital marketing like banner ads,” its success can still vary depending on a number of factors. That may include the size of the influencer’s audience, engagement rates, platform, niche, and more. Additionally, assessing the success of influencer marketing based solely on top-line sales misses an essential piece of information. Returns.

While leveraging an influencer’s audience may initially result in impressive sales, high return rates will impact the bottom line. Not only does that result in less profit, but it means that any influencer marketing efforts aren’t as successful as top-line sales might initially indicate.

That’s why analyzing returns data from these kinds of sales is essential. Returns data can provide much-needed insights into what’s working and what’s not working in a business’s influencer marketing strategy. Not only can this help increase profits, but it can also help measure the effectiveness and success of influencer marketing efforts.

1. Returns Data Can Uncover Specific Influencers Whose Sales Result in High Return Rates

If there are high return rates related to specific influencers or even a group of influencers, returns data can show who they are. This is important for several reasons.

If all of your influencer partnerships are resulting in high returns, then it could be related to a broader issue regarding product quality, shipping, the way you’ve asked influencers to describe or feature the product, or even the selection method of your influencer partnerships.

On the other hand, high return rates among a smaller group, or even individuals, can help fine-tune your overall strategy and avoid actions that may be contributing to returns. For example, perhaps the influencer didn’t thoroughly discuss the sizing or stretch of a garment. As a result, their audience may have ordered the incorrect size or engaged in bracketing.

In this scenario, it would be beneficial to communicate this issue to the individual to ensure all necessary information is conveyed to their audience. If this is an issue for multiple influencers, then it may be time to revise any educational materials you provide to influencers so they’re aware of sizing features they need to convey.

2. Returns Data Can Uncover SKUs or Brands with High Return Rates

If a particular SKU or brand has high return rates, continuing its marketing can lead to additional poor consumer experiences which can erode customer loyalty. Not only is that damaging to the business’s image and bottom line, but it can also discourage influencers from wanting to partner with you in the future.

It goes so much further than that though. Depending on the reason that a SKU or brand has high return rates, it’s possible that returns are happening across multiple sales channels. While that isn’t always the case, the potential impact on the bottom line is significant.

Until a business determines why a product has a high return rate, it may be a good idea to replace it with a product that performs better to reduce the likelihood of negative experiences.

3. Return Data Helps You Understand WHY a SKU or Brand Has High Return Rates

Whether a return is acceptable (customer dislikes a product) or the result of a critical retail error (damaged item, shipping issues, inaccurate descriptions, etc.), returns data can help businesses determine the factors that lead to high return rates among specific SKUs or brands.

This information helps businesses create targeted solutions to resolve high return rates. For example, imagine that a particular shoe has a high return rate because customer expectations about heel height weren’t met. It could be time to update your product descriptions or sizing charts and ensure influencers are aware of these changes.

Not only will these types of targeted solutions improve your influencer marketing efforts, but they can lead to fewer returns across multiple sales channels.

4. Cross-Reference Returns Data From Other Channels to Verify Returns Issues

If returns are not due to influencer marketing strategy but to critical retail errors (manufacturing issues, material quality, shipping issues, etc.) then returns data from other channels can be cross-referenced to verify this information. Additionally, while knowledge of returns issues is essential in order to develop targeted solutions, this also creates marketing opportunities.

If critical retail errors have resulted in many negative consumer experiences, being transparent about implementing solutions is a powerful way to rebuild trust and brand image. Encouraging influencers to discuss these improvements can show consumers that their complaints were heard and that their opinions matter.

5. Returns Data Can Uncover SKUs or Brands That Perform Well

Returns data can highlight additional marketing opportunities by uncovering products or brands that perform well and have low return rates.

Increasing marketing efforts for such items positively impacts the bottom line in several ways. For example, if customers are satisfied with a purchase and choose not to return it, this can indicate they’ve had a positive consumer experience. That can lead to greater consumer trust, loyalty, and higher lifetime value.

Additionally, if a product has performed well in brick-and-mortar locations, it may be beneficial to have influencers promote it via social media as well.

 

Improve the Success of Influencer Marketing with Targeted Solutions from Returns Data

While influencer marketing is a long game, leveraging return analytics allows businesses to have more control over their bottom line—but only when it’s expertly analyzed and used to develop targeted solutions.

The Returnalyze Intelligent Dashboard provides businesses with detailed analytics to help identify issues, opportunities, and solutions. Additionally, that access comes with essential step-by-step guidance and expert data analysis so businesses can leverage this information efficiently and effectively.

Want to see how our intelligent dashboard can help optimize your influencer marketing efforts? Schedule a demo or contact our team today.