Social Commerce Returns Playbook

Key strategies to avoid product return frustrations

A U G U S T 2 0 2 2

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Contents

Executive Summary 3
Survey Methodology 5
Online Returns – An Introduction 6
Summary of Key Insights 7
Favorite Destinations 8
Checkout Preferences 9
Return Rates 10
Return Experience 11
Impact of Poor Experience 12
Social Commerce – Consumer Concerns 13
Social Commerce - Returns Best Practice Advice 14
Executive Summary

Social commerce may be in its infancy, but online shoppers are not. They expect to be
able to return products with ease, irrespective of where the product is purchased. The
impact of a poor experience is increased caution about future purchases.
In the Social Commerce Returns Survey, 1,002 U.S. consumers were surveyed to
provide an important first picture into a customer’s experience when buying using
social checkout and returning products.

of shoppers show
caution after returning
products bought on
social media networks

The research shows that 66% of shoppers show caution after returning products
bought on social media networks, and they are:
l Unlikely to buy again on social channels
l Likely to buy directly on the brand site

Social commerce is still emerging, with only 8% of online shoppers and 36% of
seasoned social shoppers having returned a product purchased directly from a social
network. For those that have returned a product, the process has several points of
friction and is not yet best in class:
l Shoppers are unsure of how to get a refund
l Brand and social network communications are misaligned
l Technology systems are often poorly integrated

This frustration is shown by the fact that only 17% of people who have returned
merchandise are happy to buy on social media again, with 49% preferring to buy
on the brand site in the future. In the study, social shoppers that had gone through
the process were asked to compare their experience to Amazon; 60% rated their
experience with Amazon as much easier.

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Trust and product authenticity concerns are the other big issues for shoppers, making
customers cautious and holding social commerce back.

When asked the open-ended question “What is the one thing that you would
change about shopping on social media?” 35% stated that they would want to
increase trust, eliminate scams and introduce authenticity guarantees. This is a typical
response from one respondent:

Eliminating scammers. They are

everywhere. It makes me hesitant
to buy products on social media.
Comment from survey respondent

The research also pointed to some best practices for brands to adopt:
l The most notable: putting the returns slip into the delivery packages
l Clearly outlining the returns process on that same note

These two simple steps provide shoppers with the product information they need and
clear direction on who to contact, alleviating many of the frustrations that customers
experience during social commerce returns.

4
Survey Methodology

Social Commerce Returns Survey

SimplicityDX surveyed 1,002 experienced US social shoppers in June 2022.

Each shopper had made at least one purchase on social commerce in the last 90
days.
l Out of the 1,002 surveyed 321 had returned a product on social
l Out of the 1,002 surveyed 670 had not returned a product on social
l The subset of 321 social media shoppers were asked additional questions about
their social shopping returns process

The sample was selected randomly and is broadly representative of US online

shoppers.

Additional online data is taken from the State of Social Commerce 2022 survey
results.

SimplicityDX surveyed 501 U.S. online shoppers in February 2022. Each shopper had
made a purchase online in the last 90 days.

l 261 (35%) had made a purchase using social media in the previous 90 days.
l This includes checking out on social media and clicking through to the brand site
to shop and checkout.
l The subset of 261 social media shoppers were asked additional questions about
their social shopping process.

The sample was selected randomly and is broadly representative of U.S. online
shoppers.

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Online Returns: An Introduction
l The retail social commerce sector is expected to reach $56 billion in sales by 2023
l U.S. consumers returned more than $761 billion in goods purchased in 2021, an
increase of 6% from 2020
l In 2021, 16.6% of merchandise was returned, up 10.6% compared with 2020
l Digital returns are on the rise and now cost retailers an average of 21% of their
order value
l Nearly half (45%) of consumers say they occasionally bracket online fashion
purchases, while 12% say they do it often
Source: National Retail Foundation, Pitney Bowes, eMarketer, TRG

Returns are an inevitable part of social

commerce, as it is more difficult to
visualize products online.
While there is a need to reduce
costs around the returns process, if
retailers remove friction so customers
can return goods wherever it suits
them (irrespective of channel), it can
also yield a significant competitive
advantage.
Gerry Widmer, CEO, SimplicityDX

The traditional eCommerce sales funnel, where a purchase is started and finished
on the brand site, is no more. Shopping has moved to the edge and that means the
social shopping experience is increasingly important. Social commerce is established
as a key product discovery tool for consumers. And now, as social networks add social
checkout features, the entire purchase path can be completed in social commerce.

The returns process is a fact of online shopping, and it can delight or frustrate your
customers. Get the returns process right and 92% of customers will return to buy
again. You will make future purchase decisions easier and increase lifetime value.
Get it wrong and, according to recent research by Klarna, over 8 in 10 (85%) online
shoppers would stop using a retailer.

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Summary of Key Insights
Where Do Shoppers Purchase?
Meta dominates the social commerce landscape, with 82% of shoppers purchasing
from Facebook Marketplace, Facebook Messenger, Facebook branded shops and
Instagram.

Facebook Marketplace
Digging deeper into the Meta figures reveals that Facebook Marketplace,
the peer-to-peer selling platform, secures the lion’s share of shoppers’
attention with 52% of purchases.

Instagram - Top Destination for Brands

The top destination for shoppers looking for branded products is
Instagram, with 15% of purchases made there.

The Challenger - TikTok

TikTok is quickly gaining on Facebook branded shops also securing 9% of
shopper purchases.

Key Data Insights

Shoppers Cautious Post-Return Experience
66% of shoppers are more cautious about shopping on social networks
again after returning a product brought there.

Social Return Issues

Top issues experienced are:
l Confusion around the refund process
l Misaligned communication between brand site and social network

Return Experiences
l When asked to compare their return experience to Amazon, a decisive

60% rated the Amazon process much easier

Change of Heart
Since buying on social commerce only 17% of shoppers are happy to buy
on social again, others showing more caution or preferring to buy on the
brand site.

What One Thing Would You Change?

Number one change was less scams/network guarantees at 34%,
followed by 15% improvements in return process and 10% for both
better customer experience and increased data security.

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Thinking about a recent purchase you made when you used
social media, did you use?

Facebook Marketplace 52% Instagram 33%

Other 4%
Facebook Shops 20%

TikTok 9%
TikTok 20%

Pinterest 2%
Facebook
Including Excluding Messenger 11%
Snapchat 2% Facebook Facebook
Marketplace Marketplace
Other 8%
Instagram 16%

Pinterest 2%
Facebook Shops 10%

Facebook Messenger 5% Snapchat 2%

Sample size n = 1002. Source SimplicityDX 2022

52% of social shoppers thought first about a recent

purchase using Facebook Marketplace.

Meta dominates social commerce but not by as much as most people think.
Meta’s position is often overstated because 63% of the Meta social commerce
audience is Facebook Marketplace, which is a peer-to-peer selling platform akin to
eBay and not a typical brand destination.
In our social returns report every Meta social commerce destination is called out
individually providing the first comprehensive picture of where social shoppers shop,
their preferences and dislikes.
By comparing the results with and without Facebook Marketplace (as we have
presented above), the full breadth and scale of their audience can be appreciated.
With Facebook Marketplace included, Meta’s social networks are thought of first by
83% of social shoppers. Once it is excluded, this drops to 65%.
In the research Instagram is clearly the go-to destination for shoppers with a brand
in mind. Instagram’s Shopping feature, while still in its infancy, is quickly gaining
momentum with 33% of consumers recalling Instagram as their recent purchase.
The challenger, however, is TikTok, who has gained 20% of consumer recall in this
survey (excluding Facebook Marketplace) and is level-pegging with Facebook Shops.
This is impressive when you consider it is very new to eCommerce, having only added
shopping capabilities in the last year. It would be wise for brands to closely follow the
takeup of TikTok Shopping and its latest offering in the world of social commerce.

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As an experienced social shopper, which do you prefer?

Discovering products on social

but buying on the brand site

Buying the product directly on

the social media platform

I don’t have a preference

49% of experienced social shoppers show a strong preference for checking out
on the brand site.

Our State of Social Commerce 2022 research shows that 71% of online shoppers
don’t want to use social checkout, preferring to purchase on the brand site for a
host of different reasons. This trend is mirrored here, although predictably to a lesser
degree, as the social returns audience was chosen on the basis of familiarity with the
social checkout process.
What social is great at however, is product discovery — 48% of users state that social
media is a “great place to discover new products.” This really illustrates where social
plays a part of the shopping process, even if users prefer not to buy there.
According to Meta, 87% of users said they took action after seeing a product on
Instagram, like following a brand, visiting their website, or making a purchase online.
Even if users aren’t completing their sales journeys in the app, they’re still using social’s
shopping feature to discover new brands. It’s up to brands to then acquire enough
data from those users to push for that purchase.

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Have you ever returned a product on social?

Yes 36%

Social commerce is in its infancy,

with only 36% of experienced social
shoppers ever having returned a
product bought on a social network.

No 64%

Social commerce is still emerging. The networks continue to develop their commerce
offers and best practice is yet to be established.
Our research shows that only 8% of online shoppers and 36% of seasoned social
shoppers have returned a product purchased directly from a social network. For those
that have returned a product, there is uncertainty about who to contact regarding the
return process (51% contact the network, 35% the brand, and 14% are unsure of who
to approach).
The research shows that the process has several points of friction and is not yet best
in class. For example, customers typically need to contact the social network to get
a return merchandise authorisation (RMA) and then give the number to the brand. In
some cases, the brand doesn’t recognize the number and the customer is forced to
speak to the brand’s call center to get the return.

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How did this returns experience compare with returning
products bought on Amazon?

Amazon is much
easier 60%

It was about the

same 33%

Amazon is much
worse 7%

l 25% of respondents said the returns experience was harder than they envisioned
l 41% of respondents said the process was in line with expectations
l 60% of respondents, when asked to compare their social commerce return
experience to the best in class returns process by Amazon, said Amazon was much
easier

The study shows that the returns process does work for the majority. It’s not always
streamlined or without effort, but it does function, with 41% stating it was in line with
expectations.
It was revealing, however, when we asked social shoppers that had gone through the
process to compare their experience to Amazon; 60% rated their experience with
Amazon as much easier.
As we know Amazon leads the way with online customer service. Both Prime delivery
and the returns process are best in class, transparent, and uniform across sellers.
Whereas, the research findings reveal the social returns process is troublesome,
leading to customer frustration.

Return process – common frustrations:

l Shoppers are unsure of how to get a refund

l Brand and social network communications are misaligned

l Technology systems are often poorly integrated

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Following this experience of returning products bought
on social, how would you describe your approach now to
buying on social?
No difference in my attitude I’m happy to buy on social
to buying on social 17% again in the future 17%

I prefer to buy on brands’

sites in the future 22%

I won’t buy on social again I’m more cautious about

4% buying on social 40%

66% of Shoppers Cautious After Returning Products Bought on Social Media

Networks
Two-thirds of social shoppers are more cautious about shopping on social networks
again after returning a product bought there.
l Unlikely to buy again on social channels

l Likely to buy directly on the brand site.

Experience is critical in ecommerce, and this

research shows that customers will change
their behavior following poor experiences. With
profits in e-commerce coming solely from repeat
purchases, this should ring alarm bells for brands
selling on social media.
At this moment, product returns are already a
huge problem, eating into profits for many brands,
but the experience for shoppers must be good;
otherwise, brands risk losing even more through
lost future purchases.
Charles Nicholls, founding chief strategy officer at SimplicityDX

This frustration has a big impact, as only 17% of people who had returned merchandise
are happy to buy on social media again.

However, this does not point to brands needing to abandon social; they do, however,
need to understand its strengths and consumer preferences. Encouragingly, the
SimplicityDX State of Social Commerce Report 2022 revealed that almost half of
shoppers thought social was a great place to discover new products, even if only 12%
thought it is a great place to buy.

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What most makes you hesitate about buying directly on
a social media platform? Please select all factors that
concern you (multiple factors can be chosen):
Returning a product
and getting a refund 38.17%
Sharing more data
with the social network 22.27%
Scams /
product authenticity 55.77%
Product
quality 42.94%
Having an order placed on
social subsequently cancelled 13.12%

Out of stock
products
14.02%

Speed of
delivery
21.57%

Cost of
shipping
22.47%

None of
the above 2.29%

56% of the respondents cited scams and product authenticity as a concern and
product quality was close behind at 43%.

The research reveals that in addition to returns, trust and product authenticity
concerns remain big issues for shoppers, holding social commerce back.

When asked the open-ended question “What is the one thing that you would change
about shopping on social media?” the feedback was focused around the key areas
of trust, returns, and the need to deliver good customer experience, providing some
important feedback for brands to heed.

“Eliminating scammers. They are everywhere. It makes me hesitant to buy

products on social media.”
“I simply don’t understand the process. So, I go to the website. I feel
more confident dealing with the seller.”
“They need to have a clear returns policy. It’s too confusing and too much
chasing.”
“Shopping categories on social stores are shocking, poor compared to
most websites.”
“Making sure when you say you have a certain size you can actually buy it.”
“Making shipping costs available at the beginning of the purchase;
I hate it when you get hit at checkout point.”

Comments from survey respondents

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Social Commerce – Best Practice

Shopping is increasingly moving to the edge. The growth seen over the last few years
is only the beginning and best practice is still being set. So, as well as establishing a
great returns process that encourages future sales retailers need to focus on reducing
the overall return rates and rethink the end-to-end shopping experience.

While Meta may hold the lion’s share of the market right now, this may not always be
the case. Users will shop in a way that is convenient for them, and brands need to put
user experience at the forefront, regardless of where they are selling.

Whichever platform retailers choose, it is essential to follow best practice:

l To streamline the social commerce returns process put the returns slip into the
delivery packages and clearly outline the returns process on that same note. These
two simple steps provide shoppers with the product information they need and
clear direction on who to contact, alleviating many of the frustrations.
l Think carefully about implementing in-app checkout. It is often seen as a quick
win, but it leads to missing out on capturing valuable data, which you’ll need for
remarketing and driving profitability.
l Promote products on social for customers to discover but direct them to the brand
site for final purchase — 71% of shoppers prefer to check out on the brand site and
you capture all of the data for remarketing.
l Focus on inventory management. You don’t want users seeing your promoted posts,
trying to purchase, and then finding out the item is already sold out. Analyzing
return data can help retailers determine how much product to stock as well as
reduce their environmental impact and customer frustration.
l Optimize your landing page for the audience that you’re targeting. Constantly check
your links to ensure everything works and that it looks good on mobile. The State
of Social Commerce 2022 research shows that landing experiences from social
aren’t good, with 81% of shoppers complaining about poor experiences.
l To reduce the likelihood of returns, consider augmented and/or virtual reality to give
shoppers a better sense of how a product looks before they buy.
l Make sure your customer experience staff are fully briefed on your social commerce
returns process.

SimplicityDX makes social commerce work

SimplicityDX Edge Experience Platform enables brands to
optimize social commerce experiences by simplifying the
buying process between journeys started at the edge and
the brand’s e-commerce site. Founded by a team of industry
veterans in May 2021, SimplicityDX operates in the U.S. and
U.K. markets.
For more information: www.SimplicityDX.com.

www.simplicitydx.com 14