The 10 lessons from ZigZag's Checkout Smarter Returns Event

From discovering the 4 returner cohorts to sharing experiences with other retailers.
Blogs
Oct 31
The 10 lessons from ZigZag's Checkout Smarter Returns Event

ZigZag was delighted to host its second annual retail returns event last week at the Icetank in London. As the leading returns management solution in the UK, we were excited to share the results from our recent research into the shopping and returns habits of 2,000 UK shoppers.

We invited some of the UK’s most renowned brands from across fashion, electronics, automotive, health & beauty, homeware, and more to join us for a packed afternoon of insights, statistics, best practice advice, and even darts.

The event kicked off with an exclusive first look at ZigZag’s Consumer Study of Returns for 2024. Richard Lim, industry expert at Retail Economics, had a deep dive into the four returner cohorts uncovered by the research. The report paid particular attention to serial returners (those that return a high volume of clothing intentionally) and slow returners (those that take over 10-days to make a return) and their impact on profitability.

ZigZag’s Director of Client Services, Laura Davies, and Commercial Director, Jason Taylor, then unpacked some of the key findings from the report and turned them into recommendations for retailers to use transforming their own returns experience. From the use of multiple carrier services to saving the sale with Refund to Gift Card, there was plenty of great advice on show.

How to manage efficient returners by ZigZag

We then moved on to the eagerly anticipated retailer panel discussion hosted by ITV This Morning‘s Consumer Editor Alice Beer. Representatives from three of our biggest and most innovative retail brands discussed building smarter returns for their customers.

Finally, the presentations concluded with insight from ZigZag Founder & CEO Al Gerrie, who took the audience through our investigation into the returns policies of the top 130 UK retailers. Our returns experts looked at how their returns experiences shaped up when it came to paid returns, returns windows, and meeting consumer demands for choice and flexibility.

In short, the day was filled with statistics and shared experiences. Here's 10 things we learned from the day:

Serial returners make up just 11% of shoppers but cause nearly a quarter of returns.

An amazing 24% of the value of returns heading back to UK retailers in 2024 are attributed to a fraction of the people shopping online. Serial returners, despite only making up of about 11% of shoppers, have dominated the news in recent months, with their antics resulting in £6.6bn worth of goods being returned a year in the UK.

At ZigZag’s Checkout Smarter Returns event, we not only realised the gravity of the serial returners situation but also got a greater understanding of why shoppers engage in the activity and who they typically are.

They have a disproportionately high share of returns, which are often delayed, adding cost and complicating stock management. A serial returner will return 42% of their non-food purchases and have the highest penetration rate across non-food (57%) than any other returner cohort outlined in ZigZag’s Annual Shopper Returns Research Report 2024 (Occasional, Efficient, Slow, and Serial Returners)

For retailers with an older client base, you probably don’t need to worry too much about serial returners. In fact, less than 5% of serial returners are considered baby boomers. 73% of serial returners are comprised either Gen Z or Millennial shoppers, with women also slightly more prevalent in the cohort.

Richard Lim, CEO of Retail Economics speaking at  ZigZag's Checkout Smarter Returns event

42% of shoppers purposely over order on size and colour.

The number of consumers that admit to bracketing (the act of buying multiple sizes and colours to ensure fit and style on the first order with the intention of returning some of the items) has remained above 40% for the third consecutive year in the UK.

It’s also not just serial returners that bracket their returns.

All returner cohorts showed a level of returns abuse in their returns habits, although it was noticeably more common for serial returners to partake in.

Bracketing is even more common in fast fashion. As with so many designs and styles being churned out each week, it’s difficult to get sizing consistency even under the same brand. This leads to consumers pre-empting issues, and over ordering. With more stock stuck in returns loops, fast fashion retailers will suffer even more than the average retailer as their items can be out of season by the time the return is back at their warehouse and processed.

25% of Gen Z shoppers use credit card rewards or cashback programs to profit from purchases and returns.

This was surprisingly more common than most people in the room believed.

The scheme can take many forms, but a common variation is to make plenty of purchases on a credit card (like an Amex Card that gives points on purchases and can require minimum spends per month) and then return the items for a full refund. That way the shopper is left with an abundance of points for using the credit card, that they can use on other purchases like plane tickets, without having to spend any money.

It is a grey area at best, and fraudulent at worst. It can really harm retailers, notably those with a free returns policy. Retailers should closely monitor shoppers that frequently return large portions of their orders and penalise shoppers for it.

Customers deliberately over-order to make minimum spend requirements

17% of customers over-order just to reach a minimum spend.

Another opportunistic behaviour that was delved into at the event was customers actually being indirectly encouraged by retailers to abuse returns policies.

We’d never want to suggest retailers try to get their customers to spend less, however, it could be wise to take a closer look at the type of marketing promotions you offer. Principally those that inspire over-ordering items for free delivery.

Whether you consider it savvy consumer behaviour, or slightly devious, deliberately buying more products to activate a free delivery promotion with the purpose of returning some of the items is a drain on a retailer’s finances and resources.

So, make sure you aren’t encouraging unnecessary returns with promotions. Which is particularly important if you aren’t yet charging for returns.

Paid returns are not one size fits all.

Our retail panel consisted of three retailers in different stages of their returns journey and with staunchly different views on what costs should be passed on to the customer and how.

One retail client has no plans to move to paid returns in UK or Germany, despite some eye-watering return rates in the latter. It is simply the way their customer base expects the returns process to be and it would be detrimental for them to start charging for returns.

A second client has always been paid returns. From their conception they have asked for a returns contribution, so as they grew in popularity into the respected retailer they are today, nothing changed for their customers.  

Our recent research agreed with this approach, with customers happier to pay for returns for small companies, especially those in the start-up stage.

Finally, our third retailer moved to paid returns recently. They are an exemplary example of how to move to paid returns without frustrating customers. They utilised FAQs, AB Testing, free Return to Store options, and much more to make it a seamless process…and it’s worked. Their Trustpilot score has actually gone up since charging for returns.

All three retailers dealt with returns differently but achieve the same outcome, happy customers. The day proved it’s important to really know your customers, monitor their happiness, and forge your own returns path.

The retailer panel at  ZigZag's Checkout Smarter Returns event

The importance for retailers to share experiences.

Retailers never have it easy. Whether its unfavourable government policies, rising costs of doing business, low consumer confidence, rising return rates and fraudulent customer behaviour, or looming sustainability goals, there’s plenty of battles to be had when working in retail.

Therefore, it’s important to hear about what others are doing. Their successes. Their challenges. Their plans for the future. Whilst it’s equally important to sometimes protect trade secrets and what makes your business special, a healthy discussion between retailers is beneficial for all.

By getting together at events like ZigZag’s Checkout Smarter Returns, retailers can improve the customer experience, innovate data business practices, and cut costs in areas they hadn’t really considered.

From the panel discussion with our leading retailers, to the audience interaction and networking sessions, it was fantastic to hear so many different opinions on how to transform returns and wow customers.

The audience at ZigZag's Checkout Smarter Returns event

It’s time to be more open with sustainability credentials and focus on making achievable differences.

Consumers are rarely properly informed on the greenest way to do anything in life, let alone when deciphering the most eco-friendly way of making a return. It is thus easy to see the temptation for retailers to indulge in greenwashing – the practice of attempting to pass off products or practices as environmentally friendly. Retailers can often feel pressured by demanding consumers who want environmentally friendly solutions without sacrificing quality, affordability, or convenience for it.

But government legislation around the world is getting stricter. Therefore, eCommerce companies should tread carefully and ensure they can ratify claims with clear and transparent metrics. Consumers have also become sensitive to greenwashing and are likely to demand verification from any companies for the claims they make.

One of the retailers in the room spoke of a really interesting initiative that promoted circular fashion. Often for children’s clothes, there’s a tag that allows you to write your name inside. No doubt helping parents and teachers alike get clothes back to their forgetful owners. By adding in additional lines, kids can claim “hand-me-downs” as their own, naturally lengthening the product's life cycle.

A perfect example of a small initiative from a retailer that promotes a healthy attachment to clothing and its environmental impact, despite its own profit goals.

Occasional returners are 30% more likely than any other cohort to report their clothing purchase as damaged.

Occasional returners have a low overall impact on return rates and operational costs. They rarely return items unless they fail to meet expectations in quality. This group is the least costly for retailers, as they tend to return fewer items and exhibit less opportunistic behaviour. Occasional returners do account for 43% of a standard retailer's shoppers, although only contribute to less than 23% of the returns.  

Occasional returners don’t set out with the intention of returning and are often unfamiliar with online shopping or the returns process as a whole. So it comes as no surprise the main reason they return is because the item arrived damaged. However, we were surprised to realise they were nearly a third more likely to return due to damage than any other cohort.

We learned that retailers with a lot of occasional returns should monitor return reasons for poor quality products. When looking at goods outside of clothing and footwear, more than 20% of returns are processed due to the item arriving defective or damaged.

We also learned they are 19% more likely to return clothing due to the item not matching its description. So it’s also vital to update product descriptions on you website, utilise video content, and update size guides to provide customers with plenty of information upfront.

The average refund time is 9.5 days.

Refund rates vary significantly across retailers, ranging from just 3 days to as many as 30 days. Consumers can expect to wait for a refund for 9.5 days on average, highlighting substantial variation. Retailers need to address this inconsistency because a rapid refund is crucial for consumers; 72% of shoppers told ZigZag that quick refunds is a key aspect of an ideal returns policy.

In fact, 85% of shoppers are only willing to wait up to a week for a refund, which is significantly short of the average promoted refund times from our surveyed retailers. This means consumers are likely to be frequently pestering Customer Service Teams with “Where is my refund?” enquiries, causing a drain on resources and raising costs. Customers are also unlikely to shop with you whilst waiting for their refund, and may even turn to a competitor!

At ZigZag, we can help you trigger instant refunds when it is appropriate to do so based on data-driven customer segmentation.

A surprising 12% of retailers offer no estimation for when a consumer can expect their refund, a policy admission that will almost certainly lead to an increase in customer service enquiries.

A customer is not willing to wait more than 7 days for a returns refund

80% of retailers now use an online returns portal.

There has been a big shift in the last 10 years to adopt returns portal technology – ZigZag were at the forefront of that revolution back in 2015, back when most retailers were using a label in the box or even worse self-serve returns.

We were alarmed to realise however that 15% of retailers (of the 130 top UK retailers ZigZag analysed) put the onus completely on the customer. Here the retailer’s website will often have some instructions on the best way of sending the item back, but not always. This will get the poorest results of all return methods with costly and untraceable returns hitting the warehouse at random times, poor or non-existent returns data collected, and ultimately unhappy customers.

You can now watch continue from the event here

Richard Lim, CEO of Retail Economics discusses the four returner cohorts uncovered by the recent shopper research. Watch here >>

Jason Taylor, Commercial Director, and Laura Davies, Director of Client Services, are two returns experts at ZigZag, and they outlined the strategies and tactics retailers can use to better manage and satisfy their customers. Watch here >>