The importance of benchmarking returns and how to do it
September 15, 2022
Great return experiences boost customer lifetime value and improve your bottom line. Benchmarking your returns and retention performance gives you an understanding of how your post-purchase experience stacks up against competing brands in your industry. By regularly benchmarking return performance, you can better understand where your business excels and where there’s room for improvement to scale faster and more efficiently.
See how you stack up against competitors
Returnly has created a Returns & Retention Benchmark Report that breaks down performance by industry segment. We looked at hundreds of Returnly merchants using Shopify to provide industry benchmarks and actionable tips for nine verticals: Apparel, Footwear, Health & Beauty, Intimates, Swimwear, Accessories, Jewelry & Watches, Electronics, and Household.
The report also includes peak season for returns by segment so you can prep for your busiest months with tips to help you stand out amongst your peers. We’ve included the top two return months by segment below:
- Apparel: December, June
- Electronics: December, October
- Footwear: December, March
- Health, Beauty & Personal Care: December, May
- Household: December, January
- Intimates: May. April
- Swimwear: June, July
- Jewelry & Watches: December, November
- Accessories : December, June
Capture reasons for returns
What are the most common reasons for your returns? How do they differ by product? When customers make a return, you can learn valuable intel to help you improve your business.
Set different return reasons for each of your product categories to display only relevant selections based on your customer’s purchase. For example, you might apply size and fit related reasons to apparel products and fragrance and texture reasons to cosmetics. By applying return reason groups to appropriate categories, you can capture more granular insights into why certain products are being returned and regularly benchmark against it.
Start benchmarking your returns
Start small and expand. Returnly offers a hosted analytics dashboard, CSV exports and custom reporting to track your benchmarks over time. Below are a number of metrics to help you get started:
- Return Rate: the total number of orders with at least one return in it
- Return Satisfaction Score: a measure of how shoppers rate your return experience
- Revenue Retention Rate: the percentage of refund revenue that you retain
- Exchange Rate: the total number of returns that result in an exchange
- Exchange Uplift: the additional revenue generated via an exchange
- Instant Credit Uplift: additional revenue via a purchase made using Instant Credit (Returnly specific)
- Average Time to Repurchase: when the purchase is made using Instant Credit (Returnly specific)
- Return Reason: number of times a product category is returned for same reason
Set your cadence
Find the cadence that works for your team and business, and adjust thereafter based on your busy return season. Set your business up for success with consistent reporting, allowing internal teams to identify patterns, make informed decisions and more accurately forecast.
Use your historical returns data to surface patterns over time. See how you stack up against your peers (hint: Returnly Returns and Retention Benchmark Report can help)
Identify your goals
Based on your business goals, identify the areas you outpace the industry average and identify what is driving that success to ensure repeatability. Gain visibility into areas of improvement to set goals to address these gaps.
Plan and repeat
Consider ways you can drive improvements over time to boost performance. For example, could layering returns data into your marketing emails help drive Returnly Credit usage or decrease the time it takes to repurchase? Measure success over time by tracking improvements and outcomes and adjusting your strategy accordingly
If you want to improve your business with a deeper return analytics, get in touch. Analytics functionality is included in Premium plans. To see how other brands in your space perform with Returnly, download the Returns & Retention Benchmark Report today.