In the rapidly evolving landscape of e-commerce, maintaining a seamless post-purchase experience is becoming increasingly pivotal for retailers. Here, Narvar, the number-one platform for intelligent personalization “beyond buy,” uncovers the changing dynamics of online shopping returns, evolving consumer preferences, the critical role of technology in enhancing customer satisfaction and how AI-driven strategies are setting new standards in retail operations. Narvar’s expertise sheds light on crucial challenges and opportunities that are shaping the future of retail.
Related Articles
Fairchild Studio: How have consumer behaviors and expectations in the post-purchase experience changed in the past few years, especially with the shifts brought by e-commerce?
Narvar: We’re seeing an increase in frequency in e-commerce returns. Narvar’s latest State of Returns report found 39 percent of consumers return an item bought online at least once a month. For comparison’s sake, the 2023 report found that 40 percent of consumers returned an online purchase two to three times per year.
Many even admit that they are buying with the intention of returning: 72 percent of shoppers always (33 percent) or sometimes (39 percent) buy items online knowing they will make a return.
Choice and convenience are growing while we’re seeing changes in return priorities and preferences. We found that 65 percent of shoppers choose their return method based on convenience and ease – the number-one answer, even topping cost at 51 percent and speed at 45 percent. Further, 81 percent of consumers are more likely to purchase when offered multiple return options.
Return fraud is also on the rise. Slightly more than half (52 percent) shoppers admitted to engaging in return fraud at least once in their lifetime, up 16 percentage points from 36 percent last year.
Meanwhile, costs are a key consideration for shoppers and sellers alike — 60 percent of shoppers said prices influence their decision to shop with a particular retailer, and 51 percent of consumers said they’re more likely to shop again with a retailer that doesn’t charge extra fees for shipping or returns. Retailers are also incredibly cost conscious when it comes to their returns program. Narvar estimates a $100 item costs a retailer roughly $32 to get back and resell.
As businesses are grappling with how to keep costs low while also providing an exceptional experience, many are turning to personalization — or offering tailored experiences for every individual shopper — as a way to do just that. That way, high-trust customers can enjoy best-in-class post-purchase perks while retailers limit their risk exposure from bad actors.
Fairchild Studio: In the context of recent global disruptions such as the pandemic, what trends are you observing in supply chain management and customer communications?
Narvar: With the continued growth in e-commerce, we’re seeing that 57 percent of shoppers submitted their most recent return due to shipping and operational issues.
Twenty-nine percent of returns were processed because the order had damaged item(s) or missing part(s). Damaged deliveries, in fact, have seen more than a two times increase since 2020 (29 percent versus 16 percent in 2022 and 13 percent in 2020). We also found that 27 percent of returns were processed because the item did not arrive by the estimated delivery date.
The pain of these delivery issues is further exacerbated by the risk of fraudulent delivery claims. For example, 31 percent of consumers admit to having lied about an online purchase not being delivered and 27 percent of consumers admit to having lied about an online purchase arriving damaged.
Without an effective way to manage these claims — especially the fraudulent ones — teams struggle with: unnecessary appeasement costs to fraudulent shoppers; difficulty enforcing delivery claim policies and waiting periods; large volumes of customer service conversations that rely on manual solutions and slow resolutions.
To limit their fraud exposure and automate their delivery claims management process, brands are turning to AI, leveraging big data to identify bad actors from high-trust customers and personalizing their outcomes and experiences to match.
Enter: Narvar Assist.
Narvar Assist offers delivery claims fraud prevention software that provides scalable, data-driven tools to reduce fraud, automate claims management and enhance customer satisfaction, addressing a $101 billion problem for retailers. Assist is the first product powered by Narvar’s AI engine, IRIS.
Assist leverages IRIS to identify bad actors from high-trust customers and personalize the outcomes based on brands, retailers and merchants’ policies. Retailers using Assist report measurable impact, including a 25 percent drop in appeasement payouts and an 80 percent reduction in service inquiries within six months.
How does Narvar leverage AI to enhance retailer, brand, and consumer interactions?
Narvar: Narvar recently introduced IRIS: the AI engine powering the future of post-purchase. IRIS delivers data-driven, actionable insights across the Narvar platform, empowering retailers to engage customers, streamline operations and drive profitable growth through intelligent personalization.
IRIS is a layer of intelligent technologies — machine learning, data intelligence and analytics — combined with industry domain experience and fueled by more than 42 billion consumer interactions annually across the Narvar customer base. By leveraging predictive intelligence with unmatched precision and agility, IRIS enables retailers to anticipate consumer behavior, optimize operations and create hyper-personalized experiences that drive loyalty and sustainable revenue growth.
With IRIS, retailers are able to:
- Boost customer loyalty: deliver hyper-personalized experiences that deepen loyalty and increase lifetime value.
- Mitigate risk: identify and mitigate high-risk behaviors while adapting to emerging patterns.
- Enhance operational efficiency: streamline operations with predictive insights that unlock profitable growth.