Winter is coming - hot season of sales or returns?

Image showing a winter shopping scene, depicting increased sales and returns during the holiday season.

To paraphrase a well-known quote, the last quarter of the year is approaching, and thus the most anticipated period among digital managers. For a large part of e-commerce businesses, this is the time of harvest, when the highest revenues are realized. The question, however, is what will this year's Black Friday or pre-Christmas shopping rush look like? 

Double-digit inflation, rising costs of doing business, unpredictable levels of fixed costs: energy, heating, fuel - all of this means that, on the one hand, reduced demand can be expected, while, on the other, operational profitability must be secured. 

One of the more thorny topics among those running online stores is invariably the issue of returns. Various market reports show that in more than one industry one in three or even one in two products purchased is subject to returns. 

Interest in this thread can already be seen from industry giants. Zalando, implementing technological innovations, has reduced the scale of returns related to inappropriate sizing by 10%. Zara, too, has made changes to its global sales policy - as of recently, any return of purchases made electronically is chargeable.

Interestingly, while exploring the topic, I came across an interesting report (published in 2019, back before the pandemic) that shows that customers in many countries are definitely satisfied with their returns handling processes.

This shows that big investments in research and innovation for improving complaints and returns processes are unlikely to be a priority (one might even be tempted to say that they don't make much sense). Importantly, the report showed that many returns are avoidable, as they are mainly due to a lack of proper product content or other problems related to product information. 

By far the main problem is the lack of a good representation of size or color, resulting in misconceptions about the purchase vs. the actual condition upon receipt. And adding to this the mismatch between description or photo and reality, we find the factors responsible for almost 60% of returns.

So how to significantly reduce the rate of returns? The answer seems obvious - deepening investment in better parameterization of product offering data.  

Question: what are you doing in your e-commerce business to reduce the return rate?

PS. I also encourage you to download the e-book on how our Ergonode PIM can help reduce returns - download here.


Marcin Piwowarczyk
CEO & Founder of Ergonode PIM | Product Information Management | e-commerce | digital channels

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