Marketers Should Embrace the Returns Opportunity

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Ecommerce marketers are obsessed with getting products out the door. The enthusiasm is understandable. Efficient conversions and fast, convenient delivery are the lifeblood of online retail brands. However, marketing’s fixation on moving a product from the shopper’s basket to their front door has led to a severe neglect of a major part of the customer journey – returns.

It’s only natural that specialists with a focus on sales are far less excited at the prospect of unwanted items finding their way back. But a lack of investment in returns innovation has not only left brands vulnerable to rising rates of inbound items – it has also caused marketers to overlook the opportunity to transform a back-end logistics issue into a chance to play for the keep, rather than the initial conversion.

There’s no denying that many ecommerce brands are feeling the impact of the rising rate of returns. ReBOUND data indicates that returns cost UK ecommerce brands alone £6.6bn a year in processing fees and spoiled stock.

Returns may be a costly factor of doing business, but they are also a vital part of the customer experience. ReBOUND research found that 90% of online shoppers say that returns are important in their buying decisions, and almost half state returns are very important. Two thirds said they checked returns policy before completing a purchase – brands may be overlooking the reverse journey, but customers certainly aren’t.

For most ecommerce marketers, their experience of returns as a post-purchase asset extends as far as promoting a complimentary returns service – a perk which is particularly useful in driving international sales. But brands are barely scratching the surface here, and even then, aren’t always following best practice.

Alongside the wide range of operational concerns, returns is also a messaging game, but most ecommerce teams are yet to grasp this. Many return policies fall into the trap of regurgitating legal jargon instead of maintaining a consistent brand voice, which is off-putting for shoppers and makes searching for key details difficult.

Meanwhile, the likes of Amazon have committed to try-before-you-buy concepts, while at the same time taking steps to ban repeat returners. But brands can’t have it both ways – you can’t offer an exceptional and convenient customer experience and expect no increase in returns rate. Moreover, this fixation on returns as a negative, and constant focus on returns prevention, demonstrates a fundamental misunderstanding of a vital element of the customer journey.

A return does not always signal that a customer dislikes a product. In many cases, patterns of repeat returns behaviour, or ‘serial returners’ shows that these customers feel comfortable spending money with a brand. This misconception is nearly always a result of brands failing to capture data in this area. But a study from Klarna revealed a direct link between the more items a customer buys per order and their returns net profitably. Moreover, shoppers who return in high amounts but stay with the same brand often see their returns per order decline over time – they become better at identifying their preferred sizing, fabrics and general fashion sense, so decrease the number of returns they make, all while remaining loyal to the brand.

Data shows that around 20% of customers generate 80% of refunds and within this small group sit some of the most and least profitable customers. Distinguishing between these different returner personas requires a deeper, more nuanced examination of data, rather than blanket policies that risk alienating high-spend, loyal shoppers.

The returns process provides a fantastic opportunity for customers to feedback invaluable information such as concerns around incorrect sizing, misrepresentative product images and unclear item descriptions. But in some cases, marketers are their own worst enemy. Conversion tactics to drive sales can lead to impulse buys and ‘basket fillers’ which are only ever purchased with the intent to return.

This obsession with continuously prompting purchases by flaunting flash sales, endless in-session upsells and multibuy offers encourages shoppers to buy first and choose later. This can often lead to buyer’s remorse, and ultimately a big fat return order. Instead, implementing a returns process which emphasises the importance of customer feedback will help marketers continually optimise and play for the keep, rather than just the initial sale.

Marketers should be staking a claim on the returns process, rather than disregarding it as simply a logistics issue. It’s promising that many are starting to experiment with longer return windows, which help reinforce brand reassurance without actually making a significant difference to customer behaviour – even brands that have 365 day returns policies see three quarters of their returns occur within three weeks of purchase.

However, to truly seize the returns opportunity, marketers must push for further investment in data tracking. An intelligent, data-driven returns strategy will help brands plan for the future by knowing which items are en route back to them – but it will also empower marketers to cherish and learn from shoppers who return items. Take the long-term approach, power your marketing strategy with returns data and play for the keep – rather than focusing on conversion, conversion, conversion.

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