Australian shoppers are heading online than ever before and e-commerce spending has increased massively. Retailers with strong digital foundations have been the biggest beneficiaries, with ability to deliver on rising customer expectations in ecommerce.
Investments in customer experience and ecommerce have paid off. Retailers need to continue re-investing as the competition catches up and develops propositions of their own.
As a result, 2021 is another year of transformation for marketers, where the focus moves from capturing the newly-online audience to winning them back, again and again.
Marketers need to embrace digital solutions
To better understand their new and existing digital customers, marketers are refocusing their engagement strategies around first party data — the information collected directly from customers — which provides a valuable source of insights into shopping behaviours.
As marketers move away from third-party cookie tracking, CMOs are prioritising efforts to collect information about consumers to take advantage of new data sources in the organisation and help efforts to fill in vital pieces of the customer puzzle.
One of the most neglected and most valuable sources of data can be found in customer returns. The traditional paper-based e-commerce returns process typically fails to properly capture and aggregate this essential data to create reliable business decisions.
Many retailers still rely on a slip of paper to record which item a customer is returning, and the reasons why. However, this information is often discarded or fails to enter into relevant systems after a return is processed, causing valuable customer data to be lost.
By digitising the returns process, marketers can tap into a world of customer insight that can assist bespoke marketing, assisting lifecycle marketing campaigns.
With a digital returns platform, the ability to monitor audiences and flag when purchases are being returned at a higher rate, for example, is easily done. With this data, marketers can make more informed decisions about the value of targeting that segment.
Implementing a digital platform to capture customer information at the point they decide to make a return also has benefits beyond the marketing department.
Returns data can also be used to inform future buying and merchandising decisions – frequently returned items may have design defects, or perhaps the website isn’t doing a good job of showing customers what to expect from the product.
Returns platforms enable the logistics team to efficiently process returns, facilitate forecasting the expected volumes and prioritise high-demand items to be processed for resale.
Generating elusive customer loyalty
Data on returns can be leveraged to personalise experiences for customers, which is crucial to developing long-term relationships with customers and profitable businesses.
Analysing variables like sizes or colours that a customer exchanges, can be used to personalise recommended products that suit their regular purchasing habits for future orders.
According to our latest research, more than 42% of consumers never return online purchases, yet more than half (51%) return between 1% and 20%.
Consumers aged over 60 are the most likely to keep their online purchases, with more than half (54%) never returning online purchases.
Despite increasing access to free delivery and returns options, Australian consumers aren’t yet turning to online shopping to fulfil their “try before you buy” needs. 11% of consumers have ordered items online with the intention of returning one or more of those items.
As retailers develop a data-driven picture of returns behaviour, they can begin to tailor the returns experience to account for customer lifetime value.
Instant authorising of refunds on a return being handed over or posted for the highest value shoppers demonstrates a commitment to customer experience and trust in the shopper.
Integrating delivery and return services into loyalty programs can encourage customer loyalty and repeat purchases. This helps build a stronger customer relationship over time, rather than the traditional transactional points-based loyalty programs.
Customer acquisition costs are rising. Focus should be on value and customer retention.
Marketers ought to think beyond cost
Returns are vital in the customer lifecycle. Handled well, shoppers will be comfortable buying more in the future, leading to higher basket values and increased purchase frequency.
Some retailers still wrongly believe that making an item difficult to return will benefit the business’s bottom line, when in fact it could have a much greater cost in the long run – especially in terms of brand reputation and loyalty.
According to Doddle, 72% of consumers check a retailer’s returns policy before even committing to a purchase, and 41% avoid brands entirely after a negative returns experience.
Rather than viewing returns as a cost, marketers are taking a more holistic view of returns as a key part of the overall marketing mix that can help drive sales.
For example, making it easy to physically hand over a return in store builds long-term positive sentiment and loyalty, as well as short-term upsell and cross-sell opportunities.
Our research found that when shoppers returned an online purchase in store, 15 percent made an additional purchase in-store. One in five of those purchases were worth more than $100.
In the competitive digital marketplace, CMOs are placing a higher value on the data they collect directly from consumers, using it to drive personalisation and loyalty.
To make sure they’re seeing the whole picture, marketers need each part of the customer journey to be digitised, especially the crucial customer touch points like delivery and returns.
Justin Dery is the Chief Executive Officer – Asia Pacific at Doddle. Doddle is powering click and collect across three continents through its leading edge technology, its unstinting focus on the needs of modern online shoppers