How to Use Returns Data to Grow Your Online Store
Rebecca Fox

December 31, 2023

Returns data is a valuable source of information that can help you analyze customer behavior, identify new sales opportunities, and make data-driven decisions. 

Start collecting and analyzing your returns data in order to grow your online store.

The Importance of Returns Data in eCommerce

Returns data is about more than handling returns; it’s about seeing them as an opportunity for growth. By understanding the reasons behind returns, you can identify areas for improvement, optimize your processes, and ultimately provide a better customer experience.

The key performance indicators (KPIs) of returns data are one of the most important types of information that can be tracked by an eCommerce store. Understanding what products are being returned and why can help you make informed decisions to improve your bottom line.

Here are two ways in which returns data can help you grow your online store:

1. Understanding Customer Behavior

Returns data can provide insights into customer behavior, such as why they are returning products, what items they are returning, and how often they return items. 

Determine trends in customer behavior, like how often certain items get returned, and then work on addressing them. For example, if a particular product is frequently returned due to size issues, you might invest in more detailed sizing information or add a sizing chart. 

By analyzing returns data, you can identify patterns and preferences and adjust your inventory accordingly. 

Additionally, you can use returns data to analyze customer feedback and reviews to understand their pain points and improve the customer experience.

2. Identifying Opportunities for Improvement

Returns data can help you identify areas where your business can improve, such as reducing return rates, improving product descriptions, or identifying quality issues. 

For instance, if customers are frequently returning a specific item, you can investigate whether there is a quality issue with that item or whether the product description is misleading.

Collecting and Analyzing Returns Data

Returns data can be collected and analyzed through manual methods or by using a returns management system.

Manual Methods for Tracking Returns

Manual methods involve tracking returns through spreadsheets or other manual processes. While this method can work for small businesses with low return volumes, tracking returns data manually can be time-consuming, error-prone, and difficult to scale.

The Benefits of Using a Returns Management System

Returns management systems like ReturnGO automate the process of collecting returns data, saving time and reducing errors. 

An easy-to-understand return analytics dashboard gives you a visual representation of your returns data and displays it in an easy-to-understand format.

Here are some benefits of using a returns management system (RMS) to track and analyze returns data:

  • Reduces manual work – Automating data collection with an RMS eliminates the need for manual data entry, saving time and making the process more efficient.
  • Improves accuracy – Tracking returns data with an RMS reduces the likelihood of errors and ensures that the data is accurate.
  • Streamlines the returns process – Using an RMS simplifies the returns process, making it easier for customers to return items, which can improve the customer experience.

Ways to Use Returns Data to Grow Your Online Store

Now that you understand the importance of returns data and how to collect it, let’s look at how you can use returns data to grow your online store. 

1. Improve Products

By analyzing returns data, you can identify patterns and preferences, such as customers’ preferred sizes, colors, or materials, and adjust your inventory accordingly.

Returns data can also help you identify common complaints or issues that customers have with your products. By analyzing this data, you can make data-driven decisions to improve your products, such as adjusting the design, improving the material quality, or updating your product descriptions.

2. Enhance the Customer Experience

When it comes to handling returns, providing a high-standard customer experience is important, which is where returns data comes in. 

Analyzing your eCommerce store’s data can help you uncover trends and insights and gain a deep understanding of your customers’ needs and wants, which you can use to optimize your online shopping journey to better meet their expectations. 

You can use returns data to identify areas where you can improve the customer experience during the returns process. For example, tracking the time it takes to process returns can help you streamline the process to reduce customer wait times and improve customer satisfaction. 

Additionally, you can gain valuable insight into customer preferences and pain points by tracking customer feedback, and you can use this insight to make adjustments to your product offerings and marketing strategies to better meet the needs of your customers.

For example, if you see that the average amount that repeat customers spend is higher than that of first-time customers, you can focus your attention more on customer retention as that’s where you can get the most value.

3. Identify New Sales Opportunities

Returns data can be a valuable source of information for identifying new sales opportunities. 

By analyzing return analytics, you can unlock insights into product performance, customer behavior, and operational efficiency. 

With the help of a returns management system like ReturnGO, you can tap into this treasure trove of data to gain a competitive edge in the crowded eCommerce landscape. 

By understanding why customers return products, you can improve your product offerings and take advantage of untapped segments of the market. 

Additionally, optimizing internal processes, such as restocking and dealing with damaged products, will free up resources you can reallocate to growth initiatives. 

Use returns data to make informed decisions, improve customer satisfaction, and drive sales growth.

4. Reduce Return Rates

Return rate is one of the most important KPIs to track for returns management. Your return rate is the percentage of products that are returned.

Tracking your return rate enables you to measure customer satisfaction, identify customer return reasons, determine order accuracy, and take action to reduce your return rate. 

The average eCommerce return rate is around 18.5%. Keeping track of your return rate can help you manage your returns more effectively.

Based on your returns data, you can improve product descriptions, adjust sizing charts, and improve the quality of your products to reduce your return rate.

Streamline your returns process and reduce the time and resources required to process returns by using ReturnGO to manage your returns. By doing so, you’ll be able to reduce your return rate, improve customer satisfaction, and save money on returns processing

One example of an eCommerce store that used returns data to reduce its return rate is Silk & Salt, an eco-conscious fashion brand. When Silk & Salt realized that the most common reason for returns was “doesn’t fit”, they decided to look into it further.

Silk & Salt used customized follow-up questions on the ReturnGO return portal to collect customer feedback. Using the ReturnGO return analytics dashboard, they discovered a product with a 90% return rate and determined that its high return rate was due to incorrect sizing for the “small” option. They turned to the manufacturer to make more accurate sizing for that product.

Since then, Silk & Salt has taken an active approach to reducing returns by reviewing their returns data on a monthly basis.

“Return trends can be easily understood with the amount of data in ReturnGO’s analytics.” 

– Assaf Neuman, Head of Operations at Silk & Salt

Harness the Power of Returns Data

Analyzing returns data and understanding customer behavior will help you make data-driven decisions that will improve your business. 

Gain actionable insights into your eCommerce business by using a returns management system like ReturnGO, which automates the data collection process for faster and more accurate reporting.

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