Five ways online retailers can use returns for competitive advantage

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Five ways online retailers can use returns for competitive advantageAustralia Post’s recent whitepaper on returns examines trends in returns policies and logistics locally, as well as international best practice. Drawing on the whitepaper findings, here are five ways in which a fair returns policy and hassle-free logistics can help you to stand out from competitors, drive sales and increase customer loyalty.

1. Remove a significant barrier to online purchase.

Lack of confidence in shopping on the internet – from putting credit card details online to the inability to touch and experience the goods before purchase – can be a significant barrier to e-commerce . A clear, generous returns policy goes some way to increasing customer confidence and reducing their risks. According to an AMR Interactive E-Tailing Survey, 61 per cent of respondents said they would be encouraged to shop online if they could return unwanted items for free.

2. Increase conversion rates.

Not only does a good returns policy encourage customers to shop online, it can actually increase sales, especially among shoppers who experience your returns management firsthand.

A 2012 US study conducted for ShopRunner by Harris Interactive looked at the effect of offering free versus customer-pays returns on customers’ future spending. Shoppers who experienced a free return also went on to shop a lot more – with purchases increasing by up to 357 per cent over two years. The purchases from shoppers who had to pay to return an item decreased by between 74 and 100 per cent over the same period.

Download the full report

Australia Post has produced a 2013 whitepaper on returns. To gain more insights into global and local returns trends, the impact on your business and case studies of Australian businesses who follow international best practice and are seeing the benefits, you can download the full whitepaper for free.

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3. Match or better the bricks-and-mortar experience.

If you have physical stores as well as an online store, at the very
least your online customers shouldn’t be disadvantaged for choosing
to shop online. For example, EziBuy’s online store offers the same 30-day, money-back guarantee as any of its New Zealand stores,
while City Beach went from a 14-day to a 100-day “change of mind” returns policy for online customers, with no increase in the volume of returns.

4. Add value, rather than purely competing on price.

Customers have more and more choice in e-commerce. If there’s not much difference in price, the business that offers a reassuring, generous returns policy has a clear edge over competitors. For example, pure-play online retailer LatestBuy offers a 365-day “no quibbles” money-back guarantee.

5. Increase customer loyalty.

A return is a marketing opportunity and a chance to convert a customer into an advocate for your business. The 2012 Australia Post Consumer Omnibus Survey found that tenured, high-spending online customers are the customers who use returns opportunities. These loyal customers, who are confident about shopping online, are exactly the kind of repeat customers you want to attract to your e-commerce store.

Useful tools and resources

Australia Post has recently enhanced its returns solutions to make the process easy and hassle free for both you and your customers. With eParcel Returns, you can choose whether you or the customer pays return postage, plus give them the option to contact you, use the returns label provided or go online to arrange a return.

The views expressed in this article are those of the author and the interviewees, and not of Australia Post.

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