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By Returnalyze on June 14, 2024

Retail Returns Analytics: The Hidden Driver of Customer Loyalty

Want to leverage retail returns to drive loyalty and revenue? Read key takeaways from our recent webinar.

The idea that returns are always negative is not only incorrect, but it can also lead to businesses missing valuable opportunities to drive loyalty. A well-handled return process can create a positive customer experience that reinforces loyalty and increases lifetime value. The key to optimizing that process? Returns analytics.

That’s why conversations like the one in our recent webinar “Returns: The Hidden Driver of Loyalty” are so important. Returnalyze VP of Customer Success Christine Bradford joined Brooks Running Digital Innovation Director Kristl Date-Dopps, Hatch Collection Senior CX Manager Morgan Yawger, and Optoro VP of Customer Success Zach Kramer to discuss the post-purchase experience and its many opportunities to drive loyalty.

If you missed the webinar, don’t worry. Read on for key takeaways from this conversation so you can benefit from their expert guidance.

Strengthen Loyalty With A Customer-Centric Approach to Returns

To drive loyalty with returns, it’s important to develop an efficient customer-centric approach that builds trust. Customers who know they can quickly return items without a hassle are generally more confident in making additional purchases.

What we see with our retailers and brands is that their best customers are also their most frequent returners. So, these are shoppers who are loyal to the brand. They're willing to take risks with what they buy, and they're keeping a lot, but they're also returning. On the flip side of that, we hear that 95 percent of customers are less likely to shop at a retailer again if they have a poor returns experience. So, on one hand, you have your best shoppers as your most frequent returners. Then, on the other hand, they're going to churn as customers if they don't have a great returns experience. So, returns should be viewed as an opportunity to delight your best customers

Zach Kramer

VP of Customer Success


Customer-centric return policies are obviously a pivotal part of this. The ease with which customers can comprehend and utilize a return policy makes a big difference in how customers perceive the retailer. 

For example, a returns process that emphasizes customer needs, preferences, and convenience promotes the idea that the retailer values customer satisfaction. Brooks allows customers to try footwear and return it within 90 days. This emphasis on customer satisfaction helps shoppers feel more confident about their purchases while promoting brand loyalty.

It’s also important to ensure that the returns process is transparent and efficient. Customers shouldn’t be left in the dark about the status of their returns. Additionally, the longer they have to wait for a refund or exchange to process, the more likely they are to perceive the retailer negatively. 

When it comes to loyal customers, it’s also worth considering a dynamic return policy that rewards them for their loyalty. Whether offering free returns or waiving fees for damaged items, this personalization helps promote customer loyalty.

Effectively Communicate to Reduce Returns and Boost Customer Satisfaction

A return policy isn’t the only place where clear, effective communication is key. Every touchpoint with a customer is an opportunity to proactively convey vital information that reduces returns and prevents negative experiences before they can happen.

Product descriptions, in particular, are vital for customers to receive the right product during the initial transaction. When descriptions are clear and detailed with accurate sizing information, customers can make more informed purchasing decisions. This minimizes dissatisfaction and retail returns.

Analyzing which customer segments are more likely to return items can also help retailers with their marketing and product development efforts. For Hatch Collection, providing detailed sizing information is pivotal since they sell clothing designed to be worn before, during, and after pregnancy. They understand that their customers’ size needs will fluctuate, so they offer free exchanges for size or color on a monthly basis.

When we mention communication, it’s important to understand that we also mean customer communication as well. Customer feedback in the form of reviews and testimonials can inform product descriptions, product development, and policies like the ones mentioned above. 

Leveraging customer feedback is another way to convey to customers that their needs and concerns are important. Thus, acknowledging and integrating these kinds of direct customer signals can help promote loyalty.


Efficient Inventory Management Facilitates Seamless Returns Processes

Inventory management may not be on a customer's mind, but their overall satisfaction can take a nosedive when the products they want are out of stock. 

That’s why the entire lifecycle of the returns process, from customer initiation to product restocking, must be efficient. When self-service returns are an option, customers want a seamless experience that doesn’t require complicated policies and procedures.

Restocking procedures should help ensure inventory is quickly available for resale, which is crucial for maintaining sales, reducing losses, and keeping customers satisfied. For example, Morgan explained how efficient inventory management helps promote exchanges instead of refunds. 

We want to make sure that if a customer is looking to exchange, we have the inventory… rather than having to come back to us and get a refund. So we're always analyzing the inventory levels from that point of view to make sure we're able to offer our customers a direct exchange so they're not having to go and purchase two sizes, try one on, and return it.

Morgan Yawger

Senior CX Manager

Hatch Collection

Efficient restocking methods are particularly important for popular or seasonal items. For seasonal products, identifying return trends allows retailers to quickly take action should issues arise. For example, monitoring return patterns in real-time allows retailers to make dynamic adjustments to product listings and inventory management. These quick pivots can ensure sufficient stock levels to meet customer demand without negatively impacting service quality.

Leverage Returns Analytics to Improve Customer Loyalty

If you’ve been paying attention, you likely already picked up on the importance of returns analytics. Without increased returns visibility, businesses simply don’t have enough information to successfully leverage retail returns to drive loyalty. That’s why retail analytics is vital.

While it may be fairly obvious when a product has a high return rate, returns analytics can provide deeper insights into the reason behind those returns (e.g., sizing, damage, quality, etc.). 

We try to track everything. Not just product category, style, size, color, when they returned it, etc. But also, what did the customer do on the site, or what information did they see before they made the purchase and then returned it? What do the reviews say about the product? Does that correlate… That level of detail that we’re driving down to, there are stories to tell and insights to find that will drive action to solve problems.

Kristl Date-Dopps 

Digital Innovation Program Director

Brooks Running

The right returns management platform will not only analyze quantitative data but also qualitative data in the form of unstructured customer feedback. The ability to cross-reference such vast data gives retailers access to insights that can inform future product development, inventory decisions, marketing efforts, return policies, and so much more.

Drive Loyalty and Boost Revenue with Data-Driven Recommendations from InsightFinderAI

Returns management isn’t just a logistical challenge to set and forget. It’s a critical part of the overall customer experience and a valuable opportunity to drive loyalty. To do that, however, it’s vital that retailers leverage their returns analytics. 

Sifting through such a vast amount of data may feel overwhelming. Fortunately, retailers can now easily access crisp, data-driven recommendations that improve customer loyalty, reduce returns, and uncover revenue opportunities with InsightFinderAI. Retailers will receive an automated roadmap to deliver targeted revenue impact and improved customer experiences.

Plus, we’ll be with you for the entire process. A partnership with Returnalyze comes with step-by-step guidance from our returns experts because we know how important it is to have an expert in your corner when you need it.

Ready to drive loyalty and recover revenue with InsightFinderAI? Schedule a demo or contact our team today.

Published by Returnalyze June 14, 2024