Raise the ecommerce marketing bar with smart returns
Business need to ensure their online storefronts are just as customer-friendly as their bricks-and-mortar counterparts, argues Doddle CEO Justin Dery
In the near future 45% of purchases are set to be completed online, continuing the shift to digital shopping well after the pandemic is no longer rampant. COVID introduced millions of Australians to online shopping, and significantly increased the frequency of online purchases. While this is welcomed, it presents new challenges. Marketers have to maximise their effectiveness to reach these shoppers, and can’t afford to get lost in the noise.
Connecting with consumers is easier when data is used effectively. Data-driven marketing tactics are unsurprisingly coming to the fore for 2021, especially in terms of customer acquisition – SEO, longtail search, social media integration and pixel retargeting are key components in an ecommerce marketing toolbox. But there’s a risk that by focusing on acquisition, retail marketers are missing out on some crucial sources of data that could allow them to develop long-term relationships with that new cohort of customers, and ultimately drive increased profitability by increasing customer lifetime value (CLTV).
Ecommerce returns represent a rich vein of exactly this type of valuable data. As online sales experienced 72.9% growth year-on-year in November 2020, so too have returns volumes. That alone has been a compelling factor for retailers to adopt smarter digital returns processes, which reduce the cost burden of returns. What they’ve found is that having digital returns processes also allows them to capture quality data which informs their marketing efforts and allows them to cultivate long-term customer loyalty.
It’s tempting for retailers to try to minimise the rate of product returns by making the process harder for customers. It’s understandable, given that returns can seem like a cost retailers bear without reward. The trouble is that making your customer’s life harder goes against some basic retail principles, and while it might save you some money in the short term, you’re constantly kneecapping your customer loyalty efforts. Another nasty side-effect is that you effectively insulate yourself from a vital source of feedback and customer data.
A digital returns platform generates some simple-sounding but highly valuable shopper insights. Who is returning, what are they returning, and why? The answers to these questions give you the actionable data to better plan resources, target more efficiently and identify recurrent product issues. Sure, you might get some of this data from a paper returns slip, but how much of that data is accurately transferred into a digital system where anyone can actually use it? Once the received return has been matched to the original order, the paper is usually discarded along with its valuable data.
Returns data can inform buying and merchandising decisions. If you can measure the effect of returns on the profitability of individual customers or customer segments, you can start to target your marketing more effectively to those who are less likely to return, or those who return a lot but also purchase frequently enough to make up for it. And when you get to see returns being made digitally, in advance of them showing up at your processing center, you can react and plan with proper visibility.
Significantly, 41 percent of shoppers have stopped shopping with a retailer after a poor online returns experience. That’s a wake up call to any retailer still treating returns as an afterthought, as they’re highly unlikely to get a second chance with modern consumers. Offering a digital returns journey is one great way to make your customers’ lives easier, not more difficult. The other vital part is how they can physically get their returned purchase back to you – that also needs to be convenient and simple.
Some omnichannel retailers might encourage customers to make all returns in their physical stores, but the pandemic demonstrated that this is not always convenient or feasible. Instead, offering shoppers a range of returns methods makes for an easier journey for more of your customers, while also increasing the speed shoppers can complete the return. Services such as the Australia Post Collect and Return network enable retailers to offer their customers an expanded array of drop-off points including post offices, street posting boxes and third party locations like supermarkets, department stores and pharmacies.
In a crucial retail moment like today, earning a share of the new online spending pie is essential to set retailers up for future success. Just as important is retaining that share, and delivering on your promise to customers. Online retailers that adopt digital returns policies will be set up for the months and years to come, giving marketing teams a gold mine of actionable data and turning returns into a driver of long-term loyalty, not just a cost to be avoided.
Justin Dery is the CEO APAC of Doddle.
