How user-generated content can lead to fewer returns in online retail

When it comes to e-commerce, many different innovations enable consumers to make purchasing decisions. However, it is often the case that unrealistic impressions of products lead to returns. Retailers find it difficult to strike a balance between a customer-oriented returns policy and strict regulations to curb the number of returns, as the returns process plays a central role in the relationship with the customer. Retailers and brands also have other options when it comes to reducing returns without straining the relationship with the customer. UGC is one such option.

UGC in the form of customer reviews or photos gives consumers the opportunity to find out more about a product than conventional product information. Sellers can use reviews to help their customers buy the right product first time without having to order several variants and return the ones that don't fit.

For the review process, it is therefore advisable to collect basic profile information to give similar buyers a picture through a "people like me" section. Preference questions based on personal style, gender or age group can make it easier for buyers to see which product suits them best. Australian online designer rental company GlamCorner, for example, was able to reduce its returns rate by 50 percent within seven months with the help of UGC and a "people like me" section.

UGC is an unfiltered direct link to the end consumer and also a source of information for retailers and brands about what customers think of their products. The reviews can be used to identify which product information is misleading, should be added, or where frequent errors occur that could lead to returns. In this way, defects can be effectively addressed and the products and their information optimized to save future customers and companies from having to return them.

While product descriptions provide an initial overview of the product, it can be difficult to concisely present all the information customers are looking for. A PwC study shows that 91 percent of customer questions related to a product are not answered by the product description. If customer questions remain unanswered before purchase, this can prevent them from buying - or lead to a return later on.

With the help of a question and answer section on the product pages, retailers have the opportunity to get in touch with their customers to close knowledge gaps and make purchasing decisions easier. The mattress brand Zinus was able to answer customer questions in this way, increase its sales by 35 percent and reduce the number of customer service calls by half.

Nowadays, the customer journey takes place across numerous channels and devices. UGC such as photos, ratings and reviews can also be used to direct customers to brick-and-mortar stores. A Bazaarvoice study shows that almost 50 percent of all customers read online reviews before buying something in-store. This would eliminate numerous reasons why consumers return products. According to a KPMG study, 37 percent of returns are due to the fact that products cannot be presented in sufficient detail online. With a click-and-collect service, customers can find out about a product online and pick it up in-store. This combines the advantages of both channels and reduces shipping costs.

UGC can make a decisive contribution to ensuring that customers order exactly the products they want. And, ideally, also increase sales in stationary retail. Those who integrate UGC into their strategy will have less trouble with returns - and in return will have satisfied and loyal customers.