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How to make returns your competitive edge

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The definitive guide to making returns your competitive edge. In this guide you will learn tons of insights such as:
1) The state of returns in 2017 based on a survey of over 1,000 consumers globally
2) How merchants win with returns, growing revenue and profit
3) 11 tips and tools to make your returns magical

Veröffentlicht in: Einzelhandel
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How to make returns your competitive edge

  1. 1. How to make returns your competitive edge
  2. 2. Table of Contents 1: The State of returns in 2017 2: How merchants win with returns: case Studies 3: Practical guide: 11 tips to make your returns magical
  3. 3. 1: The State of Returns in 2017. We surveyed over 1,000 shoppers in US, UK and AUS and asked them about their expectations with returns. Here are the takeaways.
  4. 4. The State of returns in 2017 Returns build trust and loyalty. Returns affect conversion. Returns are the new normal. Shoppers now expect a simple return experience. Amazon and other large e-commerce players are setting consumer expectations for convenience of returns. 83% of consumers read the return policy before buying. Most shoppers say that a restocking or return shipping fee can prevent them from buying. 77% of returns are done by repeat shoppers and 72% of consumers will spend more with merchants that make returns simple. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground. 2 31
  5. 5. 1: The new normal: Returns are central to the buying journey of consumers have returned an online purchase in the last three years. The return touchpoint is now mainstream and affects most of your customers. 89% 41% of customers buy the same items in multiple sizes or variations, with the intent to return some of them. Customers now try on the items at home and decide after which items they keep. The return touchpoint is not an aftermath of a transaction gone wrong; returns are now a central part of the buying decision. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  6. 6. 1: The new normal: Shoppers avoid hassle Of shoppers mentioned that adding return friction with extra email or phone communication results in a negative return experience. One irritant that came up often is the lack of clarity to track a return status. Many shoppers are worried about their returns getting lost. 58% Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  7. 7. 1: The new normal: The Amazon effect on returns Amazon is setting the level of expectations for shoppers across the industry. Amazon counts 300m users, while adult US population is 301.2m. Given how prevalent Amazon is, they have come to define the consumer expectations around what a good return experience should look like. Amazon shoppers especially enjoy the transparency, where they can track their return status themselves. For context, one out of three of shoppers worry about having their return package lost when shopping online. Being able to choose from multiple refund methods, such as cash or store credit, was also mentioned as a plus for convenience. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  8. 8. 1: The new normal: Shoppers expect free returns Of consumers expect free returns. 80% 25% Of merchants offer free returns. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  9. 9. 2: Returns increase conversion of consumers read the return policy before buying. The return touchpoint has an impact on conversions. In fact many merchants use a “Free Returns” campaign tactically to increase conversions when sales are being target. 83% 71% of customers find that a restocking fee or shipping fee can prevent them from making a purchase. A restrictive policy will prevent customers from buying. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  10. 10. 2: Returns increase conversions: Shoppers want a longer return window of customers believe that the return window should be at least 30 days. On average it takes 2.5 to 3.5 weeks for a customer to return an item from the time of purchase. 57% Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  11. 11. 3: Returns build trust and loyalty Tony Hsieh, CEO at Zappos about returns and loyalty: “We also offer a 365-day returns policy for people who have trouble making up their minds. (Originally our returns policy was only 30 days, but we kept increasing it at the urging of our customers, who became more loyal as we lengthened the returns period.) Our returns run high—more than a third of our gross revenue—but we’ve learned that customers will buy more and be happier in the long run if we can remove most of the risk from shopping at Zappos.” Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  12. 12. 3: Returns build trust and loyalty. of consumers said they would spend more and buy more often with merchants that make the return experience simple. 72% 77% of returns are done by repeat shoppers. Or to say differently, people who return a lot also tend to spend a lot, and they trust the brand. It means that they are actively engaged with the brand. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  13. 13. 3: Returns build trust and loyalty of repeat customers who had a good return experience are likely to buy again. The return experience is a good predictor for customer loyalty and overall customer NPS. 89% Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground.
  14. 14. The State of returns in 2017 Returns build trust and loyalty. Returns affect conversion. Returns are the new normal. Shoppers now expect a simple return experience. Amazon and other large e-commerce players are setting consumer expectations for convenience of returns. 83% of consumers read the return policy before buying. Most shoppers say that a restocking or return shipping fee can prevent them from buying. 77% of returns are done by repeat shoppers and 72% of consumers will spend more with merchants that make returns simple. Source: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns - the new battleground. 2 31
  15. 15. 2: How merchants win with returns We asked 3 successful medium-sized fashion retailers to share their tips & secrets win with returns
  16. 16. Midori Bikinis
  17. 17. Midori Bikinis What is your main goal with Black Friday? “Our biggest goal for Black Friday is to push out products that won't be restocked. This is our last big push before we go into production mode for the next summer season. If we can push out more than 70% of old inventory it has been a successful Black Friday.” What is your main challenge with returns during Black Friday? “The most challenging part of returns is budgeting for the incoming pieces both with revenue and with inventory. We manage this by halting restocks at a certain point then moving all return pieces to a trunk show or online sale later on in the year.” How do you handle discounted items as part of your return policy? “We have tried final sale as well as store credit only returns for discounted items. We most likely will use store credit only for the Black Friday sale this year”. [That being said] “Final Sale items is one of the best ways to handle a sale of this magnitude, especially if you are focused on getting rid of inventory. Be as clear about the final sale as possible but still be prepared for customers being upset if you haven't done final sale in the past. Have a game plan for how to deal with disgruntled customers and remain consistent.” What helps you be successful during Black Friday? “Preparation is key for Black Friday We usually do a special returns policy for black Friday sales. The most important preparation is updating the automation rules in Return Magic and updating the website to display the new return policy in as many places as possible..”
  18. 18. BAGGU
  19. 19. BAGGU What is your main goal with Black Friday? “We want our customers to trust us and our product. Creating a free and easy return process is a part of the customer journey we think about often, especially going into the holiday season.” What is your main challenge with returns during Black Friday? “Getting valuable feedback from our return data. Return Magic is beginning to help us with this, and we see a lot of potential wins there in the future.” How do you handle discounted items as part of your return policy? “Sale items are not accepted as returns. However, general discounts (15% off your purchase) are treated as normal purchases and may be returned.” What helps you be successful during Black Friday? “Planning as far in advance as possible really helps our team feel prepared going into the holiday season. We focus on creating an enticing offer paired with exciting visual content and easy customer experience.”
  20. 20. iHeartRaves
  21. 21. iHeartRaves What is your main goal with Black Friday? Sales, sales, sales. However, in terms of execution the stakes are much higher and the margin for error is minimal to pull off a large % increase of orders in an extremely short period of time. This puts an extreme amount of pressure on the entire team to perform, but we love the challenge! What is your main challenge with returns during Black Friday? It was hard to manage the entire returns process but Returns Magic has made it very streamlined today. How do you handle discounted items as part of your return policy? We don’t do final sale promotions as we always want to ensure our customers are 100% happy with their purchases and always have the option of returning if needed. What helps you be successful during Black Friday? Year round we train our customers to always purchase w/ hassle free returns and we believe this pays off during the holidays. Lots of people are impulse buying because of the huge deals during Black Friday and it’s extremely comforting to know that we have a super slick return process if the customer decides to not keep the purchase.
  22. 22. 3: Making returns magical Time to get practical. Here are 11 tips to help you win during the holiday season.
  23. 23. Preparing for the holiday season Design your optimal return experience. Take a holistic view. It’s important for a retailer to first develop an opinion on what is the right return experience for their shoppers. Should you offer a free label or not? What is an appropriate time window to return the item? Is it better to include a return label in the box or not? We suggest to spend an hour or two doing a bit of research on return experience, taking your customers’ point of view, in order to understand what is the right return experience for your store. For example, you can buy and return items online on the site of large retailers such as Nike, Zara, etc. to understand what makes their return experience interesting. You can also buy and return items from your site and your peers or competitors. What did you notice? How does your current experience compare? Sounds simple to do, but testing your own approach to returns and framing it in reality is a great starting point. 1 Make your return policy as clean and simple as possible. Most return policies look like contracts with fine prints and complex terms. The harder it is for a shopper to understand your policy, the harder it is for them to trust your brand, and to trust that you care about them. Now, how does a simple return policy help to build brand trust? Given that over 80% people will look at your policy, it is absolutely worth optimizing the wording for conversion. Fundamentally, a clean, short and simple policy that can be understood in less that one minute inspires more trust from shoppers. It reduces chances of misunderstanding and confusion. Take a look at Midori Bikini’s as an example. 2
  24. 24. Preparing for the busy season “Year round we train our customers to always purchase with hassle free returns and we believe this pays off during the holidays. Lots of people are impulse buying because of the huge deals during Black Friday and it’s extremely comforting [for them] to know that we have a super slick return process if the customer decides to not keep the purchase.” Brian Lim CEO / Founder Emazing Group EmazingLights | iHeartRaves | IntoTheAM
  25. 25. Final sale & discounted items: use product tags. Given that Black Friday Cyber Monday is relatively promotion-driven, it is important for retailers to have a specific strategy for specific discounted items. Some retailers will make them non-returnable, or store credit-only, others will increase the restocking fee for these discounted items. By using a product tags, you can create a smart way to manage returns specific items to protect profit. This is something Return Magic can help you with. 3 Invest in automation to handle large volumes. Just like ecommerce revenue, returns tend to be seasonal. Dealing with a very fast growth in sales is overall a great thing for a retailer, however the dark side of this growth comes when there are too many returns to handle effectively, leaving the customer with a poor experience. In order to keep on top of increasing returns, retailers should streamline the process by automating labels, tracking & refunds. By saving time on repetitive tasks, customer service is free to focus their time on value-add tasks, like building a positive relationship with the customer. 4 Preparing for the busy season
  26. 26. “We have tried final sale as well as store credit only returns for discounted items. We most likely will use store credit only for the Black Friday sale this year”. [That being said] “Final Sale items is one of the best ways to handle a sale of this magnitude, especially if you are focused on getting rid of inventory. Be as clear about the final sale as possible but still be prepared for customers being upset if you haven't done final sale in the past. Have a game plan for how to deal with disgruntled customers and remain consistent.” James Fisher CFO Midori Bikinis Midori Bikinis Preparing for the busy season
  27. 27. Promote convenience across your site. Make it visible. As mentioned earlier, promoting free and easy returns across your site can help increase conversion and build brand trust. That is even more the case for fashion & luxury product categories. If you are not able or willing to offer free returns, promoting easy returns can still be a viable strategy. Just by knowing that there will not be any hassle for returns and that an item can be tracked, you can still encourage the majority of shoppers to buy. 5 Preparing for the busy season
  28. 28. Offer many ways to refund your shoppers. Shoppers like choice. They already can choose from multiple refund methods on many other websites. Why limit them to one option i.e. original payment? By offering many refund options,, you can enhance the experience. Shoppers love the convenience from having more control. This can help build trust in the brand. 6 Leverage gift cards. Related #6, when customers choose gift cards as a refund option, you get to keep the money in your store. So you can encourage gift card refunds to improve your cash flow position. For example some merchants will deduct a fee for cash refunds, while they will offer gift card refunds for free. This gives an incentive for the shopper to opt for gift cards, while staying in control (they can still pick cash refund). 7 Preparing for the busy season
  29. 29. Managing during the busy season Be transparent. Send email updates. Make tracking simple. Making the return process transparent can deliver many benefits. Confusion erodes brand trust. Uncertainty increases customer contact. By giving them the means to track their order themselves, and sending them email or SMS updates, you help your customers relax. You make them feel more important too. 8
  30. 30. Stay on top. Review & manage returns on a daily basis. Preserve trust. After Black Friday, you’re likely to receive a wave of returns. It’s better to ride the bull by the horns and be proactive about processing these returns. It means carving extra time to stay on top of new requests that are coming in. Things can evolve very quickly, so it’s a good idea to check in daily and make sure nothing is on fire. As for customer contact, customers that are trying to return tend to be easily irritated if they do not receive a response within a day. You have their their money, trust is at stake. 9 Ask your shoppers about their return experience. Getting customer feedback can be tremendous for improving the return experience. You can survey NPS specific for returns. This will give you insights on the friction and how you can act. For example you could find out that you have specific inventory sizing issues in a specific category. Or you could learn that you have specific quality issues with a manufacturer. These lessons gives you insights on how to to improve your operations. 10 Managing during the busy season
  31. 31. Analyse the data, write down learnings & improvements for next year.A post-mortem can go a long way to get your team’s learnings from this year’s BFCM. There may be a lot of different things to improve if your store is fairly young. It’s better to pick fewer things, to improve (maximum 3) and focus only on them until they are embedded. By taking notes, it will be helpful next year to remember what went well or not, and will be invaluable knowledge to new team members that are on their first Black Friday / Cyber Monday. 11 Managing during the busy season
  32. 32. Select Merchants Making Returns Magical
  33. 33. Return Magic is an API solution for online merchants. Software as a service to optimize the return touchpoint for revenue and profit. With over 2,000 installed merchants, Return Magic works with leading fashion brands. Get in touch

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