A recent study by SAP Emarsys Customer Engagement sheds light on the attitude of UK shoppers towards retailers’ return policies, indicating that 50 percent of consumers exhibit greater loyalty to businesses offering free returns.
The research, conducted among over 2,000 UK shoppers and launched at the NRF retail tradeshow, highlights the impact of returns on customer loyalty.The findings underscore the significance of free returns in consumer loyalty, with 82 percent of respondents indicating that they have ceased shopping with a retailer due to the introduction of a paid returns policy. Moreover, 44 percent actively avoid retailers charging for returns, showcasing the influence of return policies on customer behaviour.

Increasing Rate of Returns

SAP Emarsys data reveals a consistent rise in return rates, with 71 percent of shoppers having returned items in the past 12 months. However, a notable aspect of this trend is the occurrence of ‘wardrobing,’ where 25 percent of consumers admit to purchasing items with the intention of returning them. This behaviour often involves buying the same product in multiple sizes to assess the fit.

To counteract the issue of excessive returns, some retailers have implemented returns fees. Nevertheless, the study indicates that this strategy may backfire, with 47 percent of respondents expressing reduced loyalty to brands imposing returns charges.

Preference for Personalised Shopping Experience

The study suggests that a personalised approach could be instrumental in addressing the root cause of high return rates. Approximately 58% of shoppers prefer brands offering personalised products based on customer data, such as returns behaviour and wish lists. Respondents emphasise that retailers could mitigate returns by providing a more personalised product selection (26 percent) and offering personalised recommendations and deals (26 percent).

Sara Richter, CMO at SAP Emarsys, comments on the importance of personalisation: “When retailers offer more targeted products based on customer data, such as returns behaviour and wish lists, the volume of returns drops. Three in five (58 percent) shoppers prefer brands that make personalised offers.”

Richter highlights the role of advanced tools like Customer Engagement Platforms, Customer Data Platforms (CDPs), and AI in understanding customer shopping habits and return patterns. She emphasises the need for retailers to leverage these tools to deliver a tailored experience and enhance customer loyalty.