Edition 110, September 2020

View from Academia — Technological Solutions to Reduce Online Returns: What Actually Works?

Web retailers are well aware of the issues arising from the fact that online shoppers are unable to physically interact with products before buying them online. One impact of this inability to “touch and feel” a product before purchasing could be lost sales. More interesting from the reverse logistics perspective, however, is what might happen after the sale – when consumers cannot assess an item in person before buying it, there could be a higher chance of a product return. This can be driven by an information deficit, in which the consumer simply does not fully understand what she is purchasing online. Then, when the item is physically received by the consumer, her information is complete, and it might not be what she expected, leading to a return.

In recent years, online retailers have introduced numerous technologies to provide better pre-purchase information to online shoppers, which one might expect to lead to fewer returns. In 2013, Prof. Prabuddha De of Purdue University, along with his coauthors, endeavored to determine the efficacy of some of the most common approaches used by online apparel retailers: zoom functionality, color swatches, and alternative photos. Using data from an online women’s clothing company, the researchers discovered some interesting, and quite surprising, results. While the availability of zoom was found to be associated with fewer returns, they found no significant impact of color swatch availability on return rates. Most surprisingly, their data showed that a higher use of alternative photos was associated with more returns (and indeed lower net sales overall). This might be due to the fact that, while a function like zoom provides mostly factual information (pattern, stitching, etc.), alternative photos provide “impression-based” information that might present the product in a more favorable context (lighting, attractive models, etc.). The authors find that such information is associated with higher returns. A takeaway for online retailers – if you want to use technology to reduce returns, idealized photos might not be the best approach. It’s better to stick to the facts!

The above is a summary and commentary based on: De, P, Hu, Y, and Rahman, M (2013) Product-Oriented Web Technologies and Product Returns: An Exploratory Study. Information Systems Research, 24(4), 998-1010.

1This recurring series provides plain-English summaries of leading academic research in the area of consumer returns. It is co-produced by Mark Ferguson (Univ. of South Carolina), Michael Galbreth (Univ. of Tennessee), and Guangzhi Shang (Florida State Univ.).