How To Reduce Ecommerce Returns, Increase Profits, & Cut CO2 Emissions

Imagine this: your eCommerce business has just shipped out a record number of orders. You’re elated - until a flood of returns begins. Each return represents a direct hit to your bottom line, but the financial burden is just one side of the coin.

Consider the financial significance of returns for eCommerce businesses. According to a report by Appriss Retail, US businesses lost a staggering $309 billion in sales from returns in 2020. Returns not only erase sales, but they also add the costs of processing, restocking, and possibly disposing of the returned item. For a small to medium eCommerce store, this additional burden can significantly eat into profit margins.

Now, let's shift our gaze to the environmental impact of these returns. Each return leaves a carbon footprint, resulting from transportation and packaging waste. GreenStory, an environmental analytics firm, found that the return of a single pair of jeans produces the same amount of CO2 emissions as driving 15 miles in a car. Multiply this by the billions of items returned each year, and the environmental cost is enormous.

There are various reasons why returns occur, including damaged products, sizing issues, wrong items, and so forth. For example, in clothing eCommerce, incorrect sizing accounts for about 30% of all returns, according to Shopify. Likewise, according to a survey conducted by Bizrate Insights, 20% of returns occur because consumers receive damaged goods.

This brings us to a crucial point: packaging plays a vital role in addressing these issues. How? Firstly, quality packaging protects your product, reducing the likelihood of damage during transportation. For instance, Amazon significantly reduced its returns rate when it introduced its frustration-free packaging, designed specifically to minimize damage. Secondly, thoughtful packaging can help you communicate product and sizing information more accurately, preventing returns due to customer misunderstanding or misperception.

4 Ways To Reduce Ecommerce Returns, Increase Profits, & Cut CO2 Emissions

Optimize Packaging Design to Reduce Breakage

Navigating the labyrinth of product packaging can be daunting. However, the right packaging can significantly diminish product returns and improve customer satisfaction. Start by understanding your product and its specific requirements. Is it fragile? Heavy? Unusually shaped?

Consider an artisanal ceramic store, for example. Each piece is unique, delicate, and requires exceptional protection. As such, the packaging should be tailored to protect the product during shipping and handling. This involves more than just selecting a box that fits. The size, shape, and materials of the packaging should mirror the product's fragility and dimensions.

But don't be fooled into thinking that functionality trumps aesthetics. The unboxing experience contributes significantly to customer satisfaction. When customers open a well-packaged product, it evokes a sense of excitement and appreciation. Apple, for instance, is notorious for its sleek, minimalistic packaging that complements its high-tech products and enhances the customer experience.

Appropriate cushioning materials can minimize product movement, crucial in preventing damage during transit. Amazon's 'Frustration-Free Packaging' initiative, for example, replaced traditional packing materials with recyclable air pillows and biodegradable packing peanuts, ensuring protection while remaining environmentally conscious.

Design packaging that fits the product securely, preventing shifting or damage. This is particularly relevant for electronics, which can be easily damaged by static or impact. For example, Dell managed to decrease its return rate by designing a foam solution that suspends the product in the center of the shipping box, away from potential impact zones.

Lastly, never underestimate the importance of clear instructions and labeling for handling and opening packages. FedEx, for example, offers a wide array of shipping labels and instructions to ensure that packages are treated with the appropriate care during transit.

Minimize Sizing Issues

There's nothing quite as disappointing as receiving a product that doesn't fit. Sizing issues, particularly in the clothing and footwear industry, are one of the leading causes of product returns.

Inaccurate or insufficient product descriptions can lead to a tsunami of sizing-related returns. This can be mitigated by implementing sizing guides or reference tools on the product packaging. For instance, Zappos includes detailed size charts and measurements on their shoeboxes to help ensure the perfect fit.

Adding detailed and accurate product measurements on the packaging in addition to online descriptions can drastically cut down return rates. It serves as an extra reassurance to customers before they open the package. ASOS, a major online clothing retailer, has embraced this strategy by including precise product dimensions, fabric details, and model sizes on their packaging.

In conclusion, optimized packaging design and accurate size representation are instrumental in reducing eCommerce returns. Not only will these strategies boost your profits and customer satisfaction, but they will also contribute to reducing your business's environmental footprint.

Increase Perceived Value by Improving Customer Experience

Exceptional packaging does more than protect your product; it creates a memorable unboxing experience that leaves a lasting impression and amplifies your brand's perceived value. Imagine a customer receiving their package after a long day. The unboxing should be a joy, not a battle with layers of packing tape.

Look at Apple. Their packaging is almost as iconic as their products. Opening an Apple device is a user-friendly experience that exudes luxury. It's not just the sleek white box; it's the thoughtful placement of each item, the embossed logo, and the satisfying 'whoosh' when the lid is lifted. Every detail matters.

To emulate this, consider incorporating branded elements and personalization into your packaging. Brooklyn Candle Studio, for example, sends personalized notes and uses branded packaging. This not only delights their customers but also enhances their brand recall.

Packaging can also engage users interactively. For example, Loot Crate, a subscription box service, uses boxes that turn into themed playsets, like a makeshift Batcave. Interactive packaging or additional features add an unexpected value to your product, leaving a positive and memorable impression on your customers.

Gather Feedback and Continually Improve

Your customers' voices are pivotal in shaping a seamless eCommerce experience. Encourage feedback on packaging and returns - these insights can reveal a treasure trove of information.

Data analysis can be a powerful tool in identifying recurring issues. For instance, if you notice a significant number of returns due to damaged items, it could point to packaging deficiencies. You can then take corrective action, such as improving packaging protection or providing clearer handling instructions.

Customer feedback can also guide design improvements over time. Dollar Shave Club, for example, switched from bubble mailers to custom-printed cardboard boxes after feedback revealed that their razors were sometimes damaged in transit. By continuously refining packaging based on customer feedback, they reduced returns and reinforced their commitment to customer satisfaction.

In conclusion, enhancing the customer experience through packaging and leveraging feedback for continuous improvement can significantly reduce eCommerce returns. These strategies not only cut costs and CO2 emissions but also strengthen your brand's relationship with its customers.

Final Thoughts

Reducing eCommerce returns, increasing profits, and minimizing CO2 emissions can seem like a daunting task. However, with the right packaging design and a commitment to understanding customer needs, these goals are within reach.

Your packaging design needs to serve a dual purpose: protect the product and create an unforgettable unboxing experience. Think Apple's slick, satisfying packaging that almost overshadows the actual product. Or consider Zappos' detailed size charts on their shoeboxes, eliminating unnecessary returns and the environmental burden that comes with it.

However, never forget the importance of listening to your customers. Their feedback can provide invaluable insights into potential packaging pitfalls and improvement areas, leading to more efficient operations and higher customer satisfaction rates. For example, Dollar Shave Club's shift from bubble mailers to custom-printed cardboard boxes dramatically reduced their return rates and amplified their commitment to customer satisfaction.

In essence, transforming your packaging strategy is a win-win for your business, your customers, and the environment. Remember, every returned product avoided is a step towards a greener, more profitable eCommerce operation.

Brandon Rollins is Director of Marketing at Fulfillrite. His main areas of expertise are online marketing and supply chain management.