Playing For The Keep: Why Marketers Need To Embrace The Returns Opportunity
by Laura Gee
It’s no secret that high conversion rates and basket values are the lifeblood of online retail. So, we can understand marketing’s fixation with getting products out of the door. Yet with so much focus being placed on shifting stock, a key part of the customer journey is often ignored - returns. Whilst 61% of retailers believe returns are a problem for the logistics team to solve, there’s a huge opportunity for eCommerce marketers to get involved in the returns discussion.
With marketing departments typically focusing on the ‘quick win’ and initial conversions, the idea that many products end up being returned is much less exciting than getting products from basket to the shoppers front door. However ignoring returns behaviour is a missed opportunity to reduce returns, drive reconversions and make smarter marketing decisions.
eCommerce marketers can often be their own worst enemy. With the increased pressure to produce higher conversion rates and increased basket values, focus on customer loyalty can slip down the priority list. Tasked with producing higher conversion rates and increased basket values, marketers can become guilty of measuring results based on conversion alone, rather than playing for the keep. Due to this, tactics such as endless upsell promotions are often their go-to strategy. However, little consideration is given to the messages such as “spend £10 more to qualify for free next-day delivery” could be having on your returns rates.
While the short term success of these campaigns might be evidenced in your conversion rate or average basket value increasing, accurate returns data is needed to assess their true long term success. These kinds of promotions encourage shoppers to buy first and chose later, which could ultimately lead to buyers remorse. Furthermore, with 36% of shoppers adding extra products to the cart to qualify for shipping discounts, this leaves room for shoppers to game the system by adding “basket fillers” to qualify for the promotion. These last minute add-on items are therefore only purchased with the intent to return.
Over the last few years, we’ve tried and tested hundreds of retailers returns processes, and have been shocked at how many retailers send discount codes within hours of the shopper placing an initial order. Whilst the goal might be to boost customer loyalty, increase the lifetime value of the shopper, and decrease the time until the next purchase, this may not be the only outcome achieved.
How many shoppers went on to order the same items again with the discount, only to return the full priced items they’d ordered just hours earlier? In this instance, you're not only unnecessarily cutting your margin, you’re also increasing your returns and landing yourself with a bill of reprocessing the returned items. We encourage eCommerce marketers to take more of a forensic approach to these emails. Clicteq found that not factoring returns into your paid search campaigns can cut your return on ad spend in half, so imagine how returns could be reducing the effectiveness of your marketing emails.
80% of shoppers won’t make a purchase with you after making a return, but a little incentive can go a long way, with 33% of shoppers saying they are influenced to buy from a certain retailer by discount codes. By holding the discount codes until after a return has been made, and acknowledging you got something wrong with a message that reads ‘Sorry your top wasn’t quite right, here’s 10% off your next purchase’, you give yourself the opportunity to drive re-conversions and reduce your list of dreaded single spenders.
Returns aren’t just a problem for the logistics team to solve despite what 61% of retailers think. They’re an opportunity that needs to be realised across the whole business, yet many marketers aren’t made aware when a return has occurred, making truly targeted post-purchase communications an impossibility. Without the valuable feedback loop into the marketing department, shopper’s who’ve returned items could be receiving frustrating emails with messages such as “these would look great with your new top…” having already sent it back.
Time and time again shoppers are blamed for their returns behaviour, with retailers failing to accept responsibility that they could actually be encouraging such behaviours with their marketing tactics and lack of insight over their returns data. When it comes to eCommerce returns, retailers need to start shifting their behaviour and take the long-term approach. Marketing strategies with returns data at their core stand to produce much more success when it comes to playing for the keep, rather than just the initial conversion.
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