In the first article of this series on the return issue, we gave an extensive analysis of the problem. In this second article, we’ll zoom in on what customer segmentation can do. In the returns problem faced by fashion retail, we can recognize different types of consumers, each of which exhibits different behavior leading to the return of products. This makes the return of products part of the total customer journey and thus also part of the retailer’s strategy. Recognizing and categorizing consumers helps to provide a personalized approach to reducing returns. In total we can recognize 8 different types of consumers by their buying and returning behavior.
First of all, there is the so-called “fitting groomer”. This is a consumer who orders clothes in different sizes and colors to try on at home. After that, this consumer sends back what he does not like. Another type of customer that is very similar, but still requires a different approach, is the “ignorant customer”. This consumer is insufficiently aware of the size and therefore orders different sizes and returns the non-fitting items.
There are also different categories of consumers who order, wear and then return clothing. Each of these categories of consumers can be recognized differently by their purchasing behavior. A “wardrober” orders clothes and shoes, wears them for a while or for a specific event and then returns the items within the return period. There is also a consumer who likes to hold fashion shows for family and / or friends, where a lot is ordered, but also a lot goes back. Also “social influencers” are consumers who order clothing and then return almost everything. These consumers buy the clothes to show on social media and then return it all.
In addition, there are two categories of consumers where it is all about the emotion when ordering. The “emotional shopper” impulsively orders clothes and / or shoes, but often sends them back. We also know “serial returners”. These are consumers who often order for very large amounts because they get a kick out of ordering and then unpacking the packages. After that, these customers send (almost) everything back.
A final category of customers are the so-called “functional shoppers”. Customers who know what they need and therefore do not return a lot. About 73% of consumers see themselves as a functional shopper. This is a difficult picture because we see in a lot of data that consumers actually fall into one of the other categories.
Collecting data and segmenting customers based on buying and returning behavior can help select effective measures that fit the retailer’s value strategy. In this way, the retailer can influence the consumer in an appropriate way and make it aware of the impact of returns.
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