Returns - International Returns As A Competitive Advantage

24 October, 2018

International E-commerce is a fast growing market offering a wealth of opportunities to retailers with a global mindset. In 2017, retail E-commerce sales worldwide amounted to US$2.3 trillion by 2021 this figure is estimated to reach US$4.88 trillion.

So, global E-commerce is a key market to be in for retailers with real ambition. However, given the potential rewards available, it’s no surprise that this is also a very crowded market and one where brands can struggle to find points of difference with competitors.

The importance of returns to E-commerce

Returns are increasingly being recognised as vitally important to E-commerce success. Many brands have failed to tap into the potential that a well managed returns process has when it comes to creating a competitive advantage. Instead, there has been a focus on driving sales or taking steps to prevent returns from occurring in the first place. While both of these are important, returns are an inevitability for E-commerce retailers. Embracing the returns process as an opportunity to engage customers, generate loyalty and differentiate the brand from others in the market – as opposed to simply ticking boxes with it – is key for a number of reasons.

  • 89% of online shoppers will check a retailer’s returns policy before making a purchase. The presence, and quality, of a returns setup can influence buying decisions, including whether a customer chooses one brand over another.
  • 15% of online shoppers won’t make a purchase if they either can’t find a returns policy or are unable to understand how the returns process works. So, a brand may be at a competitive disadvantage without a solid returns policy, and unnecessarily losing sales as a result.
  • Returns are crucial for establishing customer trust. Today, because customers are so proactive about seeking out returns terms and conditions, if there is no returns policy then this can raise all kinds of trust and customer service questions that potential customers may not be able to overcome in order to make the purchase.
  • Online purchasing makes returns inevitable. In-store, customers can try on clothes or feel the texture of curtains and make purchasing decisions with the product in their hands. The nature of online buying means that this step is delayed until after delivery and there will always be some consumers who don’t want what they have purchased. A lack of direction when it comes to returns means the business is not addressing one of the key risk factors of being an E-commerce retailer.

The advantages of International Returns

  • Offering returns – especially free returns – is often perceived by consumers as a statement of confidence in the brand and its products.
  • An international returns policy that provides a good experience for a customer means they will come back to a brand – 89% of consumers would shop again with a brand as a result of a positive returns experience.
  • A strong returns policy often means that customers will take a chance on items that they might not otherwise buy, knowing that if it’s not right they can simply return it.
  • The international returns process provides an opportunity to engage with customers – positive interactions create good experiences that customers are often willing to talk about, building word-of-mouth recommendations.
  • Some researchers have established a link between product return behavior and purchase behavior over time. This can provide a brand with a way to identify those customers who are likely to increase their rate of purchase more quickly than their rate of return and to better target marketing.
  • Including product returns, as well as purchases, in the calculation of consumers’ long-term value can change the trajectory of customer value to brands.

All the evidence suggests that international returns offer a considerable advantage for international E-commerce businesses – and may even be responsible for driving sales. For those brands looking to achieve a competitive advantage in the crowded global E-commerce market, a customer-focused returns policy and easy returns process provide a way to stand out and an opportunity to engage with customers on a whole new level.

Sources: Statista/Landmark Global/Royal Mail/ Landmark Global

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