A high eCommerce return rate can not only harm your brand reputation, but it can also harm the overall business profitability and revenue. On average, an eCommerce return rate hovers around 20-30%. Brands are always on the hunt to reduce eCommerce return rates and improve brand loyalty.
One reason behind the high return rate in the fashion industry is the unavailability of product testing. For instance, when customers buy a makeup product online, they are unaware of how the product, like lipstick, would look on them. Receiving a slightly different shade leads to the loss of a customer and a high product return rate.
In this guide, we will reveal the main reasons why fashion brands generally have high product return rates. In addition, we will help you with cost-effective measures to reduce returns.
What is the Return Rate for eCommerce?
The average eCommerce store return rate is around 20-30%. According to The National Retail Federation, the online return rate has reached $212 billion, which is doubled from 2020 to 2022.
The beauty industry has around 4.3% of online return rate. Managing return rates in eCommerce is of paramount importance. This ensures that brands can make a steady flow of income and improve customer loyalty.
One feature that lets eCommerce stores boost brand loyalty is AR (augmented reality) apps. These virtual try-on apps are designed to help customers try products before they buy, leading to improved customer satisfaction.
Reasons for High eCommerce Returns in the Beauty Industry
Every business encounters customers who want to return specific products. It’s part of the business that requires an in-depth analysis and understanding of consumer needs. Let’s understand the main reasons why the beauty industry has a higher product return rate.
Impulsive Online Shopping
The ease and convenience of online shopping often encourage customers to make impulsive purchases. This is primarily in the beauty industry, where trends and limited-time offers play a significant role.
Such impulsive decisions can lead to later regrets, resulting in higher return rates. To counter this, fashion brands must focus on implementing strategies that encourage a more thoughtful and informed buying process.
Unclear or misleading product descriptions contribute significantly to high return rates. When customers receive products that do not match the online descriptions, they feel deceived. Hence, they are more likely to resort to returning the items.
To mitigate this issue, eCommerce stores should invest in crafting accurate and comprehensive product descriptions that provide detailed information about the product’s color, texture, application, and suitability for different skin types.
The beauty industry faces a unique challenge, particularly in cosmetics, where customers may order the wrong makeup shade or product without proper knowledge of how it will look on them. Consequently, when the product fails to meet their expectations, they initiate a return.
To address this issue, brands should explore innovative solutions like virtual try-on features that allow customers to see how products will appear on their faces or body before making a purchase. For instance, brands can offer virtual lipstick try-on to help customers apply lip shades in the virtual world before buying.
Returning a Gift
Gift purchases often result in higher return rates, as recipients may not find the product suitable for their needs or preferences.
To mitigate this, brands can implement a hassle-free and customer-friendly gift return policy. This enables recipients to exchange the product for something they genuinely desire.
In the beauty industry, customers expect high-quality products that deliver on their promises. Any perception of poor quality can lead to a surge in returns and significantly affect the brand’s credibility and reputation.
To address this issue, fashion brands must maintain strict quality control measures and ensure that products meet or exceed customer expectations.
How to Reduce Return Rate in the Cosmetics Industry
There is no business with zero returns. Customers often return products when they do not meet their expectations. Fortunately, there are best practices and ways to reduce eCommerce returns and improve profitability.
Introduce Try-On Features
To address the challenge of the unavailability of product testing, implementing virtual try-on features on your eCommerce platform can significantly reduce return rates.
Augmented reality (AR) technology empowers customers to virtually try on makeup products, allowing them to see how different shades and products look on their unique skin tones and features.
AR apps in customer service give buyers a sense of confidence in their purchase decisions, thus reducing the likelihood of returns due to wrong makeup shades or unsatisfactory appearances.
By integrating AR technology into your website, fashion brands can offer customers a realistic and immersive try-on experience. As a result, customers will feel more connected to the products they choose, leading to better-informed purchases and fewer returns.
Understand the Reason Behind Returns
Collecting and analyzing data on return reasons can provide invaluable insights into customer behavior.
By understanding why customers return specific products, fashion brands can address issues such as sizing discrepancies or product quality concerns.
With this knowledge, brands can take proactive measures to improve product accuracy and quality, reducing the likelihood of future returns.
Analyze Customer Purchase Journey
A thorough analysis of the entire customer purchase journey, from browsing to checkout, can reveal potential pain points and areas where customers may face difficulties.
By identifying these areas and streamlining the process, fashion brands can create a more seamless and enjoyable shopping experience for their customers.
A smoother shopping journey can lead to decreased impulse purchases and rushed decisions, which often contribute to higher return rates.
Simplify Checkout Process
A complicated and lengthy checkout process can discourage customers from completing their purchases or cause them to make hasty decisions, leading to higher return rates.
Fashion brands should implement a user-friendly and intuitive checkout process that minimizes steps and offers guest checkout options.
Explore AR Apps to Reduce eCommerce Return Rate
Augmented reality (AR) applications like SelfStylo have emerged as powerful tools for reducing return rates in the fashion industry, particularly for cosmetics. AR allows customers to virtually try on makeup products, eliminating the uncertainty associated with online shopping.
The ability to visualize how makeup products will look on their face boosts customer confidence. It leads to more informed purchases and fewer returns due to color or texture mismatch.
AR apps like SelfStylo can also collect valuable data on customer preferences and usage patterns. Leveraging this data can help brands understand customer behavior better. They can tailor their product offerings accordingly, reducing the likelihood of returns. Grab a free demo of SelfStylo to learn the simple way to reduce eCommerce return rates in 2023.