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Ecommerce Returns Don't Have to Cause Churn

Matt Blevins
Updated 03/26/20 1:20 PM

Retailers tend have a solid understanding of their marketing funnel. They track how a visitor reaches their website, what pages she visits, how much time she spends per page, and whether the visitor converts or not. 

Many times, retailers also have a pretty good idea how likely a shopper is to make an additional purchase after converting for the first time.

This is the side of ecommerce is where most retailers focus and optimize; tracking clicks, visits, likes, views, purchases, and revisits.

In the intensely competitive environment of ecommerce, retailers know just how significant it is to get conversions, and more importantly, repeat purchases.

ecommerce-returns-process-insight-drip

But what about after a shopper returns a product?

This enters the side of ecommerce that is far less explored - returns management.

It's easy to speculate that a return indicates that the shopper is unhappy. She didn't like something about the product or overall experience, and probably won't purchase from you again.

Or, on the other hand, that the lack of a return indicates that the shopper is satisfied. Congratulations, another happy customer. 

But this view is fundamentally flawed.

Just because a shopper kept her purchase, that does not necessary mean that she is happy. In fact, potentially the most harmful case to the customer relationship is that a shopper does not or cannot return a product that she would like to send back.

We'll consider some examples to help demonstrate: 

ecommerce-returns-shopper-profiles

The Silent Sufferer:

Let's say a shopper purchases a new pair of jeans, but when they arrive, they don't look nearly as good on her as she had imagined. She decides to return them, only to find the returns experience cumbersome. She tries and tries, but eventually gives up.

Now, not only is she disappointed, she is stuck with a tangible reminder of her disappointment.

The Satisfied Sizer:

This shopper orders a new pair of jeans and loves them. After trying them on, she realizes that the size is not quite right. So she revisits the website and begins the returns process by making an exchange. 

She's not actually upset with the retailer. As many of us know, it is difficult enough to find the perfect size jeans in the store, let alone online. Most likely, she is going to try a different size or style in her next purchase.

The Bargain-Bin Returner:

This shopper makes a lot of purchases. If you only looked at the price of the products they've purchased in their lifetime you'd think they're one of your top customers. 

But when you dig deeper you realize that every purchase they've made has been at a discount. This thins your margins dramatically. 

On top of that, they returned the vast majority of the products they've purchased. This further drives down your margin. 

They keep coming back for more every time you send your end of season clearance emails. They're very happy with you as a retailer, but they're not as great of a customer as they appeared on the surface.

The Danger of Writing Off Returns as Churn

While these are just three, perhaps oversimplified examples, they nonetheless illustrate the point that neither does a return itself not indicate an unhappy shopper, nor does the lack of a return itself mark a thrilled shopper.

Ecommerce returns, like everything, must be considered in context. That is why the collection of return reasons and open-ended comments is so impactful.

The danger in assuming that returns directly cause churn is that it will render complacency within a retailer. 

If we take for granted that shoppers who make a return are likely to churn, we will not focus much effort or investment on the returns experience.

We probably would not designate a plan to follow up with them later, or help them find the right size or style for their taste. We may even de-prioritize them for future marketing outreach.

But indifference is an express lane for a churned customer.

Guiding the Way

The core distinction to make here is that product returns can cause churn, if the process and following experience are not handled adequately.

Shoppers who make a return most likely just need a different set communications, to help smooth over the experience and pave the way for the future relationship with the brand.

These are customers that should be segmented inside your ecommerce CRM and nurtured with contextual content that is based on their purchase and returns behavior.

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Coupled with the right touch points, returns data can help close the loop between purchases and increase customer lifetime value.

Depending on the reason for the return, repurchase rates after a return can be just as high or even greater than the retailer's base rate of repurchase.

Taking Action to Engage Ecommerce Returners

One retailer we work with, for example, reaches out to shoppers who initiate a return, and attempt to assist in finding the right style or size. While this practice is time-consuming, shoppers are not quick to forget this level of personal attention that ecommerce typically lacks.

The key is not to sell to the shopper, but to first listen to their experience, feedback, and preferences.

You fought to get this shopper, now fight to keep them by giving them the best experience possible.

Both sides of the ecommerce lifecycle need to be optimized to sustain a healthy ecommerce business. Ecommerce returns are a fact of life. They only lead to a churned customer when you decide to disengage. Instead, lean into returns as yet another vital customer touch point on your journey together.

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