Customer experience is a universal consideration in ecommerce. With today's competitive retail landscape, an elevated experience has gone from a differentiating factor to a base-level assumption. The ecommerce returns process is no exception.
Customer experience shapes the goals of all teams within an ecommerce brand, and plays a role in nearly every conversation we have with retailers.
By now, it's accepted that return policies impact shopper conversion. Almost half of shoppers check the return policy before purchasing from a brand, and they tend to be most dissuaded by restocking fees, shipping fees, and short return windows.
On the bright side, we're able to establish return policy best practices to remove some of the pre-purchase friction associated with product returns.
Strict and punitive return policies are likely to leave a bad taste in the customer's mouth. The shopper is already giving up a product she thought she would love; the goal of the retailer here should be removing as much friction as possible from the returns experience.
On top of that, an inefficient returns process is going to result in a long wait for an exchange or refund. This is bound to cause some frustration, and most likely quite a few emails to Customer Service.
But less understood is how the return experience affects the subsequent journey of the shopper.
We caught up with Noah Singer, the Product Management Director for the Ecommerce CRM platform Drip. He emphasized the importance of driving multiple purchases in the customer journey.
Retailers know that converting a customer, by itself, is not the pinnacle of ecommerce. The real key is converting and retaining the shopper, developing them to be a loyal repeat buyer.
Acquisition costs are on the rise, and so the importance of customer experience and loyalty to the health of a brand must not be underestimated.
With 30% to 40% of a retailer's shoppers returning a product by their 3rd purchase, the returns experience is every bit as much a part of the ecommerce journey as any other aspect. Yet, it is not given nearly the same attention or clout in the discussion.
This deficit is largely due to a fundamental lack of coherence around the impact of ecommerce returns on the shopper's overall experience and future relationship with the brand.
The truth is, a return does not have to hurt the customer experience. It does not have to lessen the Customer Lifetime Value. It really comes down to the circumstances behind the return, and how well the return experience is managed.
A shopper who returns a product because it was too small, for example, is more likely to repurchase than a shopper who returns a product because of an issue with the quality or product description.
For one of our retailers, around 75% of returns due to sizing saw a purchase since. On the other hand, the repurchase rate of returns for which the product description was cited was 33%.
The reason listed for a return is an indicator of the customer experience, and thus reflects the likelihood of repurchase. Returns data informs lifetime value.
Singer recommends that in the case of a return due to sizing, use it as a chance to sweep the shopper off their feet. He explains, “Invest a little bit in that. Cover shipping, give them a credit to get another purchase."
If the reason was related to quality, Singer advises that you quickly seek to identify the problem. Was it that particular product, or is there a greater issue with your product line?
From there, the focus becomes rebuilding trust with the shopper at hand. And Singer cites social proof, such as product reviews, as a powerful tool to do so.
In order to perceive the true impact of returns on the customer experience, you first have to acknowledge that the returns experience is not perfectly analogous across returns.
Each case is slightly different. Additionally, your rules, policies, and processes as a retailer have an effect of their own.
Product returns are an inseparable part of the ecommerce customer experience. Rather than ignore them, isolate them, or pretend they don't happen, retailers can incorporate the return event into their existing customer relationship strategy.
As Singer added, “When you have a customer who makes a return, you have a customer who made a purchase."
Getting a customer to make that first purchase is certainly no easy task. But once you have cleared this initial hurdle, a return should not stand in the way of customer loyalty.
A return is an inherent signal that the shopper has interest in your brand and strong purchase intent, but that their expectation of the product did not quite match up with reality.
The next objective after processing a customer's return is to address what was off in the experience. If you can, sweep them off their feet to gain a loyal shopper.
This is precisely the role that returns management solutions aim to play.
By embracing the ecommerce returns process as another opportunity to engage your hard-won buyers, you can flip the script and create a truly memorable experience.