Skip to content

How to Reduce Dreaded Product Returns During the Holidays

For retailers, November and December are two of the most profitable months of the year. Then comes January. The first month of the year is infamous for the holiday returns that cut into retailer’s hard-earned holiday revenue. According to the National Retail Federation, 17.9% of merchandise purchased during the 2022 holiday season was returned, totaling $171 billion. 

The expected rate of holiday returns is 16.5%, which is significantly higher than it is the rest of the year. What’s more, Pitney Bowes found that returns cost U.S. retailers on average 21% of their order value. 

Post-holiday returns don’t just have to be a cost of doing business. Retailers can invest in AI-driven visual experiences that reduce the likelihood of product returns and decrease the negative impact of returns. Here’s how. 

What makes someone return a product post-holiday? Cloudinary’s recent study found that for 30% of shoppers, products that arrived looking different than the website’s depiction led to return of those goods. And 46% of shoppers didn’t get that far because they abandoned their cart when they weren’t sure if the item would fit correctly. 

To offset this uncertainty about the true quality and size of a product, retailers should rely on realistic product images and experiences. Shoppers in Cloudinary’s study reported being more likely to buy a product if they could see 360° spin sets (57%) and 3D models (53%). 

Interactive visual experiences can be automated thanks to Cloudinary Programmable Media solutions. With this technology, retailers upload their product images, and the solution will automatically create additional assets that help the shopper get a realistic view of the product they’re considering.  

Another reason someone might make a post-holiday return is that the product didn’t work well in context. For example, if someone buys a couch and it doesn’t fit their space as well as they had hoped, they may make a return. 

Fortunately, Cloudinary can help retailers create in situ visual experiences that help the shopper visualize the product in their life without investing in expensive photoshoots. Cloudinary FinalTouch can automatically remove a background of a product image and replace it with one that better fits the shopper’s personal use case. This allows retailers to upload high-quality images that match the brand’s aesthetic while providing the shopper with a better visual understanding of what an item will look like in place. 

Similarly, using AI and ML, retailers can offer site visitors a look at what their product will look like in the customer’s home. Users upload a photo of their living space, face, or body, and AI seamlessly inserts the desired item in the image.  Shoppers see the item in place, how it fits, assess whether the style complements the intended location, etc. AI tools go a long way toward easing shoppers’ concerns over their holiday purchases will meet their expectations. 

Retailers can also reduce returns by incorporating strategic user-generated content (UGC) like reviews, images, and videos. According to Cloudinary’s research, 47% of consumers cite “user reviews with images” as a deciding factor in why they purchased a product. 

Similarly, 37% of consumers think UGC videos are a priority during their shopping experience. It was also noted that 50% of consumers are more likely to purchase if they can view a user-generated video before checking out. 

Cloudinary customers can empower their shoppers to upload video content by simplifying the process for them. Cloudinary’s Upload Widget automatically optimizes file sizes, image quality, and derivatives for each UGC asset. The simplicity of the uploading process will encourage more users to upload content, giving new shoppers a more realistic sense of the product they’re buying. 

To minimize the number of returns coming in after this holiday season, retailers should invest in technology to give shoppers a stunning visual shopping experience online. Cloudinary has all the tools retailers need to create high-performing visual experiences that ensure every shopper is confident in their purchase. As a result, Cloudinary customers will safeguard more of their holiday profits from dreaded January returns. 

Sign up for a Cloudinary account today to be ready for the 2023 holiday season. And head over to the Community forums or Discord to get all your Cloudinary questions answered.

Back to top

Featured Post