Getting into the online exchange game

This month on BOXpoll, we have a relatively rare instance of consumers' perceptions lining up with what we know to be true: online exchanges aren’t very common.

Usually when an online purchase doesn’t work out, consumers return the item and either (1) walk away with their refund, or (2) buy a replacement item (new size or color, anyone?) in a separate transaction.

According to our survey of online retailers, brands with less than 250K annual direct-to-consumer (DTC) orders deem online exchanges one of the most important returns tactics but report relatively low adoption (likely due to logistical complexity).

Meanwhile, most enterprise retailers do offer online exchanges but have a strong financial incentive to drive customer traffic to their stores and handle exchanges there.

When we asked consumers, only 22% said they had completed an online exchange in the past year. While this finding was consistent across all age groups, segments who reported using online exchanges more than average include:

• Parents (32%)
• Consumers with household incomes of 100k+ (31%)
• Consumers who are shopping online more than they were three months ago (30%)

Given these results, we followed up by asking if consumers wished they had the option more often.

When you combine those who wish more retailers offered online exchanges with those who like the idea but noticed inconvenient exchanges, more than half (56%) of consumers want more online exchanges, but they must be convenient.

Millennials and parents (who use online exchanges more often than average) have an especially critical eye for convenience, with 35% and 36% noting inconvenient processes, compared to 30% of consumers in general.

Meanwhile, less than a quarter of all consumers (21%) and even fewer GenZers and Millennials (11% and 15%) say that they usually aren’t interested in replacement items when they make online returns.

Online retailers—especially mid-market apparel brands without brick-and-mortar stores—have an opportunity to reduce return rates by leveraging convenient online exchanges.

To find out what constitutes “convenient,” we asked consumers to rank hypothetical examples of inconvenient apparel exchange scenarios on our beloved mosquito-lion pain scale.

Key takeaways:

• The traditional (and bone-headed, if you ask us) “return/buy a replacement in separate transactions” is the least annoying scenario to consumers—likely because this is the DIY workaround many consumers use in the absence of a formal exchange choice. While we’re all for the show of brand loyalty, retailers could improve CX and keep more sales by implementing exchange processes that don’t depend on customers doing the heavy lifting.
• Too many out-of-stock replacement items and out-of-stock notifications after choosing the item (often results of outdated inventory files) earned a 3.6 ranking on a 1-5 pain scale – halfway between a fire-ant bite and a wasp sting. Herein lies the risk of online exchanges: Poorly executed exchanges are more annoying to consumers than no exchange option at all.
• It’s a tale as old as time: Retailer meets consumer, consumer doesn’t want to pay for shipping. Paying for return shipping proved the most painful return scenario (with 45% of shoppers ranking it in lion territory). This echoes what consumers told us last year about different RMA initiation processes.