E-Commerce Really Is Killing Brick & Mortar – But Not The Way You Think

May 2, 2018 12:50:07 PM

by Abigail Moore

A customer admires a windbreaker on your e-commerce site. The product description is fairly generic and there are some contradictions between the attributes and the feature bullets. Many shoppers would already be deterred, but this consumer really needs a lightweight running jacket for an upcoming 10K. She spends some time looking at the single, low-resolution image and thinks the jacket looks like it will suit her needs.

When it arrives, there's a large logo on the back that wasn't visible in the photo on your site. She finds that there's only one pocket, not three, and the hood isn't detachable as promised. The product doesn't meet her needs, so she's ready to return it for a refund.

A woman hands a credit card to a store clerk while looking at another woman

No retailer wants to disappoint customers, but returns have a substantial impact beyond diminishing brand loyalty and future purchases. When customers buy online but return in person, your brick-and-mortar locations can take a hit as well.

What Do E-Commerce Returns Have to Do with Brick-and-Mortar Stores?

In an article published yesterday on Bloomberg, Mall Owners, Retailers Clash on Avalanche of Online Returns, Sarah Mullholland connects the dots between high return rates from online sales and greater struggles for physical retail locations. Mullholland cites concerns over retail property owners, such as the massive Simon Property Group, Inc., losing out on rental income due to reduced profits reported by the retail stores in their malls. And while the author's focus remains on the woes of property firms, the implications for retailers themselves are clear.

When given the option to return products via mail or a trip to a retail store, customers more often choose the latter. That's because while it's easier to shop from the comfort of your couch, the hassle of packing up items, procuring the necessary shipping supplies, printing a label and driving to the post office don't quite compare to simply stopping by the mall and depositing unwanted items with a sales clerk.

And most retailers are dealing with a crippling volume of returns. Forbes' Steve Dennis observed as much in his 2018 retail predictions, in which he notes that many major retailers experience return rates of 30% – or more. What does this mean for retailers?

  • Disappearing profits as conversions turn into refunds
  • Lower profits in physical locations already feeling the pain of the retail apocalypse
  • Higher shipping costs due to returns that are processed via USPS, UPS and FedEx
  • Higher labor costs as employees receive and process returned goods in shipping centers, warehouses and brick-and-mortar retail locations

It might be tempting to think that returns are out of your hands, or that they mostly result from customer errors, such as ordering the wrong size or failing to carefully utilize product data. However, if you're dismissing returns as an unavoidable aspect of retail, think again.

According to research, products failing to match their provided descriptions are the #3 reason for returns.

It's true that returns will always factor into the retail industry, whether doing business in physical locations, digital spaces or both. But retailers who operate physical and virtual properties can take significant steps to reduce returns and improve the customer experience with a commitment to better product data management.

Product Data Management is the Key to Customer Satisfaction

When your product pages fail to accurately represent the items you're selling, returns are inevitable. And that's a risk a majority of retailers are taking. Retail user experience testing conducted by Baymard reveals that 52% of retailers do not adequately process vendor-supplied data before publishing it online. Some, in fact, don't make any attempts at product data normalization at all. 

Data cleansing and normalization is essential for a variety of reasons, from developing a successful taxonomy structure that lets customers filter and compare products to simply avoiding confusion when a shopper tries to make sense of units of measurement and other key details. The impact of clean, normalized data on minimizing returns cannot be overstated – when you offer potential customers inaccurate, confusingly formatted product information, you're inviting them to figure out the details once the item is received and send it back if things don't work out.

It's not impossible to resolve this issue. By establishing consistent protocols for product data management, you can ensure that customers are able to understand all of the most critical details of any item in your e-commerce assortment, from its most important functions and features to precise details, such as color and size. This promotes a more informed purchase decision that leaves nothing to chance, inspiring confidence, securing more conversions and ensuring that customers are fully satisfied with the products they buy.

While a comprehensive data management strategy involves many elements, here are just a few ways you can immediately improve consistency and accuracy to minimize returns:  

  • Check and double-check the facts: When dealing with the exact dimensions of furniture or appliances, every 1/8 of an inch can have a huge impact. Make sure that all product data received from vendors calls out the same information throughout without conflicting details and erroneous data. This makes the difference between an angry homeowner who can't install a much-needed item and a satisfied customer who recalls a worry-free experience.
  • Insist on consistency: The blender's capacity is 6-1/2 cups. No, it's 52 ounces. Or is it 1.5 liters? Sure, those values all add up to the same thing, but consumers shouldn't have to do this work on your site. And if you're displaying all of those values, you're creating the potential for confusion and inaccurate at-home calculations that just might land that blender back in your store or warehouse.
  • Say it with pictures: You might be assuming that the bare minimum is good enough when it comes to product photos. But think back to our opening example of the windbreaker – simply including a high-resolution photo of the back of the jacket would've been enough to keep the shopper from buying the jacket, eliminating the return and ideally directing her to a more appropriate choice. If you receive only one low-quality image from a manufacturer, it's important to follow up, and keep following up, until you receive quality shots that support confident purchases.

If you're currently relying on unprocessed data straight from vendors, you're certainly not alone, and your predicament is understandable. Maintaining a staff dedicated to data normalization is expensive, and the work can be time consuming, especially for teams without experience in reviewing and perfecting vendor-provided information. Some consider software solutions, but these technologies have distinct limitations. So many retailers find themselves in a double bind – it's too expensive to publish reviewed, normalized product data, but it's also too expensive to continue processing returns at the alarming rates that currently dominate the industry. And thus, returns remain a heavy burden on the virtual and physical arms of retail businesses.

Better product data management must be prioritized to eliminate this burden, but retailers don't have to do it alone. ProdX by Virtucom Group provides a solution that eliminates the need for additional labor costs while providing complete, accurate product data reviewed and normalized by a seasoned team of experts with more than 15 years of experience in retail product data. If you're interested in learning more, contact us today to find out how ProdX can reduce returns, increase conversions and make you the retailer of choice for today's smart shoppers.

Graphic with text that reads, Normalize. Display. Convert. above the ProdX logo

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