Problem alert!

Product returns are a major bother for online businesses, and they can mean many things, for example:

• Product photography is not a faithful representation of the real thing;
• Not enough information about the products;
• The product was damaged or defective;
• The customer experienced buyer’s remorse.

Companies do their best to reduce product returns but still, at least 30% of all products ordered online are returned as compared to 8.89% in physical stores. How can online businesses tackle this issue and optimize their revenue?

Why reducing product returns should be a priority

Returns are one of the biggest challenges when running an eCommerce business. As previously said, an average of 30% of online bought products are returned. In 2021 the National Retail Federation reported that US customers are expected to return more than US$760 billion worth of goods purchased that year. This comes with severe consequences for companies.

Return rates are also an important indicator of customer dissatisfaction. If your return rates are high, it means you are not providing the service your clients expect.

These are two main reasons why online businesses should focus on reducing their return rates. It really comes down to reducing costs, complaints, and unsatisfied customers.

However, there’s also an important player in the eCommerce industry that would benefit from reduced product returns. The environment!

When someone returns a product, it means they will send it back to its origin and eventually buy a new one. This triples the amount of transportation involved in the buying journey, which is highly associated with pollutant gas emissions.

Reducing product returns has to be part of every online business “to-do list”.

Make-to-stock needs to change…

How to reduce product returns then?

It really comes down to the way one produces and manufactures. Right now, most businesses have a make-to-stock model.

Make-to-stock relies on the predictability of customers’ needs, where companies have to anticipate what they will buy and when they will it. Which often leads to overproduction. eCommerce businesses end up with lots of components and products they don’t need and probably won’t sell. This is hugely wasteful and has a negative impact on the environment. 

It’s about mass production, and mass production has severe consequences for businesses too. Having to make things in bulk before they’re sold can also have a big toll on budgets as we know. Many companies have to spend a lot of money upfront in order to buy up components or materials to create products, and they only get that money back when – and if – that product is sold. 

Also, the company needs to maintain a large storage space to keep its inventory. This storage space itself can cost money to rent or buy or may simply mean the firm has to occupy bigger premises than it really needs.

Finally, mass production and make-to-stock lead to a higher product defect probability and therefore, more returns.

Make-to-stock has to be replaced by a different way of manufacturing to reduce product returns and improve overall quality. Make-to-order has to be part of the future of eCommerce.

The benefits of make-to-order

There is a wealth of potential benefits to this model, not only to businesses and consumers but to the environment too.

It reduces storage needs and logistics pressures on companies and manufacturers, while also allowing for greater personalization of products. This helps control costs while also boosting brand appeal.

Companies will only produce what is ordered and that also saves on manufacturing costs besides boosting product quality.

Another big profiter of make-to-order is the environment. Making custom products tailored to clients’ needs means nothing is wasted.

There are no unsold products, nothing to be dumped in landfill. This helps reduce the waste of both money and materials.

On-demand and make-to-order can also reduce product returns. Why? Well, if you order something that is not yet produced, it means you really want it. It’s not just some spur-of-the-moment purchase. Also, unlike mass production, make-to-order boost product quality, since the manufacturing process will be much more controlled.

Configure-to-order makes things even more interesting

Configure-to-order (CTO) is the process of configuring and making products exactly the way the customer wants them before they’re actually produced, using a 3D configurator. This means personalization and customization of items by the customer, using a simple interface like a computer or a mobile phone.

Expivi’s tech falls under the CTO’s way of producing.

It allows customers to configure products in real-time. It uses 3D interactive software to create realistic 3D visuals of the products which shoppers can then change and customize the way they want them, within the boundaries that you lay down. 

This offers both hyper-personalization and gamification. Shoppers can view products in 360°, rotate, zoom, size, and change colors. Clients are also able to add as many features as you allow, from special accessories to lettering.

This brings the make-to-order experience one level higher. Great visualization, customization, and personalization are the ultimate return rate smashers. Customers are empowered from the very beginning to create something which resonates with them at the same time they have the best possible visualization of the finished product.

If what you see is what you get, why would you return it?

3D configuration and Augmented Reality to reduce product returns

So we’ve established how 3D configuration can help companies reduce product returns through great visualization and personalization.

But the online shopping experience can be even richer. How?

With augmented reality (AR), shoppers can take the creations made by them in a 3D configurator and place them in the environment they choose, using a smartphone or a tablet.       There’s no need to imagine products anymore, clients can see them in the context they choose. “Does that sofa I configured goes well with my carpet?”, “Does this green shirt I personalized fit with my hair color?”. With AR, customers can answer these questions by trying out the products they specifically created using 3D configuration.

Shopify has actually reported a 40% decrease in returns thanks to 3D visualization and AR. Impressive, right?

Expivi’s tech provides 3D configuration with AR capabilities to make sure that shoppers can have the best online experience and companies can change their manufacturing to a make-to-order model. It’s important to contribute to a no-waste future, and reducing return rates plays an important role in that.

 

Did you like this article on how to reduce product returns? Then read about how you can implement 5 easy sustainable tecnhologies to green up your business.