Defending Margins, Boosting Profits: Narvar's New Study Reinvents the Returns Narrative

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Sep 14, 2023, 11:15 ET

Discover the impact optimized exchange and refund strategies can have on protecting margins and fostering customer loyalty in a high-acquisition-cost environment.

SAN FRANCISCO, Sept. 14, 2023 /PRNewswire/ -- As the global ecommerce market prepares to surpass $6 trillion, the challenges surrounding the complexities of returns intensify. Yet, Narvar's recent "State of Returns" report unveils a counter-narrative: a well-executed returns strategy isn't just a defense against growing costs – it is now a potent catalyst, accelerating customer loyalty and optimizing Customer Lifetime Value (CLTV).

Ecommerce, now encompassing 20% of all retail purchases, presents a double edged sword for retailers – ushering in new opportunities yet amplifying the complexities associated with product returns — with the rate of returns hovering at a substantial 16%. This dynamic not only signifies a logistical headache but also a significant financial drain, deducting up to $33 in processing costs for each return.

"Our report underscores the golden opportunity lying beyond mere margin protection. By redefining the return and exchange process as a pivotal engagement point, retailers have the capacity to boost both revenue and foster long-term loyalty," noted Catherine Dummitt, VP of Marketing at Narvar.

Key Highlights from the 2023 "State of Returns" Report

Shattering the Proximity Myth: 69% of consumers are ready to travel over 3 miles to facilitate an online order return. Forget about being 'around the corner'; it's all about integrating into your consumer's daily rhythm and offering options that resonate with their lifestyles, without bleeding your margins dry.
The Incentivization Revolution: 90% of consumers are ready to ditch refunds for exchanges if the offer hits the sweet spot. Whether it's cash back or a swift product replacement, consumers are hungry for incentives that resonate.
The Refund Speed Race: In this cutthroat environment, delay is the enemy. A whopping 47% of online shoppers demand their refund within 24 hours, and a slow refund process is a deal-breaker for 86%. But here's the twist: 62% are ready to fork out a small fee for instant refunds, opening up a fresh revenue stream for the innovative retailer.
Gift Cards – The Untapped Goldmine: Two-thirds of consumers will buy again within four days of receiving a gift card or store credit, with 34% diving in within 24 hours. Even better, a remarkable 61% end up spending more than the initial value, showcasing a potent strategy to boost your bottom line.

To learn more, read Narvar's 2023 consumer study, State of Returns: Saving the Sale and Maximizing Lifetime Value.

About Narvar
Narvar pioneered how brands engage with consumers beyond the "buy" button through branded order tracking, delivery notifications, returns, and exchanges. Today, Narvar's comprehensive Post-Purchase Platform empowers 1,300+ of the world's most admired brands, including Sephora, Levi's, Sonos, Warby Parker, LVMH and L'Oréal, to deliver transparency, build trust, and grow customer lifetime value. Recognized by Fast Company multiple times as one of the most innovative companies, Narvar simplifies the everyday lives of consumers. For more information, visit Narvar.com.

Report Methodology
For the 2023 State of Returns report, Narvar conducted an online survey in July of 2023 with a sample of 2,001 consumers aged 18–65 who had returned at least one online purchase in the last 6 months.

SOURCE Narvar