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Amazon’s New Push to Lower Its Returns Rate

point of no returns
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Ever since becoming the world’s leading eCommerce giant, Amazon has faced the challenge of how best to handle returns. Products ordered online are generally returned at a rate of 30%–significantly more than brick-and-mortar returns, which are less than 9%1. That makes returns an issue not just for Amazon itself, but also for third-party sellers on the marketplace.

This led to a policy of free returns on most items, last expanded in 2019. Then came the pandemic era, which had the effect of dramatically increasing online purchases and, by extension, returns. According to nationwide figures, the total value of goods purchased online and subject to returns exceeded $279 billion last year—more than double the figure for 20192.

Now Amazon is taking steps in the opposite direction. Starting last month, the company began charging a $1 fee for customers who prefer to return items through UPS Stores, though free returns may still be available at other locations. And, just as significantly, the company added a “frequently returned” label to some product pages in hopes of alerting potential customers to issues that might prompt a return.
 
As Amazon continues to aim for a lower returns rate, more such measures may be on the horizon.

If Amazon’s “frequently returned” warning has its intended effect, then more and more customers will be perusing product information (as well as reviews) on the page.

What does this mean for eCommerce content?

Amazon’s revamped policy shifts the buyer-seller dynamic somewhat in favor of the seller. After all, returns represent a financial and logistical burden for merchants and retailers. From their standpoint, any roadblocks in the customer’s access to easy returns are probably welcome.

But the issue goes deeper than that. If Amazon’s “frequently returned” warning has its intended effect, then more and more customers will be perusing product information (as well as reviews) on the page. This puts a premium on product pages whose presentation is not only visually appealing, but also straightforward enough for potential customers to easily understand what they might be buying.

Points of potential customer confusion or dissatisfaction should be anticipated and addressed in product descriptions, bullets, images, and below-the-fold content. This includes accurate visual representations of the product (including alternate angles if helpful), points of differentiation, product features and benefits, etc. The stronger the images, the less likely customers are to have unmet expectations.

To put this in statistical perspective, 81% of consumers conduct online research, including reading customer reviews, before making an eCommerce purchase3. Furthermore, 22% of returns are made not because the customer received the wrong item or a damaged item, but because the product differed in appearance from what was advertised4.

The conclusion is simple. As the pendulum swings away from hassle-free Amazon returns, quality content will continue to occupy a place of importance—and not just on Amazon, but across the eCommerce landscape.

Sources

  1. Khalid Saleh, E-commerce Product Return Rate – Statistics and Trends [Infographic], Invesp. https://www.invespcro.com/blog/ecommerce-product-return-rate-statistics/
  2. Zak Stambor, The value of US online returns will reach $279.03 billion this year, more than doubling since 2019, Insider Intelligence (Dec. 2, 2022). https://www.insiderintelligence.com/content/shoppers-will-return-26-5-of-merchandise-they-buy-online-this-year
  3. Thomas J Law, 19 Powerful eCommerce Statistics That Will Guide Your Strategy in 2023, Oberlo (Nov. 7, 2022). https://www.oberlo.com/blog/ecommerce-statistics
  4. Geetika Dayal, How Can Bad Data Hurt Your eCommerce Business and How to Fix It?, WP Swings (Oct. 17, 2022). https://wpswings.com/blog/bad-data-hurt-your-ecommerce-business/

Contributors

keeley

Keeley smith

Graphic Designer

ariel

ERIC MILLER

Copywriter

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Compass Marketing can help you discover opportunities for your brand. Our account managers and eCommerce experts use a holistic approach based on data and insights to help guide brands to success. If you would like to learn more, please reach out to info@compassmarketinginc.net! We are always happy to help and would love to learn more about you and your brand.

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POST TAGS: AMAZON, ECOMMERCE, returns