How to Leverage Returns as a Growth Channel

Taran Soodan
Taran Soodan
How to Leverage Returns as a Growth Channel

The ability to leverage returns as a growth channel is an increasingly important factor for all ecommerce brands. Customers want convenience, control, and assurance that their purchases are right for them. The customer journey does not end when the purchase has been made; instead, it continues throughout the entire process of receiving and returning products. Returns have traditionally been seen as a hassle and cost to retailers, but savvy businesses recognize that they can use returns as a major source of competitive advantage. 

Returns have a significant impact on customer loyalty. When customers feel confident that they can return products without difficulty or worry, they will be more open to trying new products from the same brand, increasing the potential for repeat purchases and further brand engagement. 

Additionally, companies that make returns easy for customers often benefit from positive word-of-mouth testimonies about their service, leading to greater brand recognition. Analyzing return data also gives insights into customer preferences which helps inform future purchasing decisions and product development efforts. This sets an even stronger foundation for long-term relationships with existing customers while helping bring in new customers through referrals and organic search.

The Benefits of Leveraging Returns As a Growth Channel 

Benefit 1: Better Customer Acquisition

Using returns as a growth channel for ecommerce businesses can be a great way to increase customer acquisition. Businesses incentivize potential shoppers to take the plunge and purchase by allowing customers to return online purchases. Knowing they can return their unsatisfied items gives shoppers extra assurance and confidence that what they purchase is good quality and worth their money. 

Additionally, returns allow customers to try out new products or brands they may have needed more time to commit to. Even if customers don't keep the item, researching and ordering from the site could lead them to return and make more purchases. 

Benefit 2: Improved Customer Retention 

Leveraging returns as a growth channel for ecommerce businesses also has the potential to create long-term relationships with customers. Allowing shoppers to return items shows them that their satisfaction is essential and keeps them engaged with the brand by providing them with an ongoing relationship even after their purchase. 

This strategy encourages repeat business since customers will keep coming back, knowing they won't be stuck with something they don't like or need. Additionally, allowing customers to make returns may lead to higher customer loyalty since shoppers appreciate being taken care of when something goes wrong with their purchase or when they change their mind about keeping it. 

Benefit 3: Enhanced Brand Reputation 

Finally, leveraging returns as a growth channel can also help enhance a brand's reputation amongst its customer base by showing that it stands behind its products and values customer satisfaction over everything else. Customers with easy access to an efficient return policy will likely speak positively about those brands' services and refer others accordingly, increasing awareness of the company's offerings overall.

Furthermore, offering generous return policies can give businesses an edge over competitors who may need to be more flexible. This can further drive sales towards your business instead of away from it due to poor service or lack of product satisfaction guarantees.

Understanding the Customer Journey and Their Reasons for Returning Merchandise 

When understanding the customer journey and their reasons for returning merchandise, there are several key components to consider. For ecommerce businesses, it's essential to understand different types of customers and their return behaviors, as well as any quality or functionality issues associated with the product or service. 

Additionally, it's essential to recognize that customers may change their minds about a purchase after they receive it or realize that an item wasn't needed or wanted. Some customers may end up purchasing an item by mistake or find out that it doesn't fit their desired use case. Similarly, some customers may have ordered the wrong color or material than what they intended and ultimately decide to return the item. 

For ecommerce business owners to create a positive customer experience, they need to clearly understand why customers are choosing to return items in the first place. This information can help retailers lower their return rates and better prepare themselves for all potential user scenarios. By doing so, retailers can save time and money when dealing with returns and ensure that their customers receive high-quality products and services at all times. 

To further improve customer satisfaction levels, ecommerce businesses should also focus on offering more personalized services, such as tailored product recommendations based on past purchases and providing helpful resources like size charts if available. They should also strive to create a hassle-free returns process by sending customers pre-paid shipping labels with tracking numbers and offering refunds quickly after receiving returned items. 

All these efforts will show customers that the business values its relationship with them and is willing to go above and beyond when assisting them throughout their purchase journey.

Using Return Data to Inform Business Decisions and Reduce Losses Due to Returns 

Using return data to inform business decisions and reduce losses due to returns is an essential process for ecommerce businesses. Return data allows businesses to understand their customers, the products they purchase, and ultimately how to make the most informed decisions that will benefit their bottom line. 

By tracking and analyzing return information, ecommerce businesses can detect patterns of poor-performing products and develop solutions to address these issues. Additionally, this data can help them identify any underlying customer service issues influencing customer satisfaction levels.

The first step in using return data is to define what information needs to be gathered. This may include order details such as product name, size, color, or other relevant characteristics used for categorization. Information about the reason for the return should also be included, which could involve a survey sent out with each returned item or requiring customers to list a reason on the form when returning an item.

With this data in hand, it's crucial to analyze it and look at it in the context of other factors like sales volume, customer demographics, and other market trends. Developing strategies around these insights can then reduce losses associated with returns by targeting problem areas with tailored solutions, such as discounts on future purchases or improved product descriptions or images online. Hence, customers know exactly what they're ordering before making a purchase decision.

Additionally, improved customer service practices can help ensure customers are satisfied with their purchases and eliminate potential issues before they occur. Using return data to inform business decisions and reduce losses due to returns, ecommerce businesses can stay competitive while simultaneously increasing profitability. 

Turning Returns into Opportunities for Growth & Engaging With Loyal Customers 

Returns are an inevitable part of the ecommerce customer experience, but that doesn't mean businesses have to let returns hinder their growth. To turn returns into opportunities for increased engagement with loyal customers, businesses should consider utilizing automation to streamline the return process. 

Automation can make it easier and faster for customers to initiate and complete a return, thus increasing customer satisfaction and boosting the chances of repeat purchases or customer retention. Additionally, automation can be used to track returned items more efficiently and ensure accurate records are kept to prevent fraud or other issues from occurring. 

Businesses should also consider creating remarketing campaigns targeting previous customers who have made returns in the past. Knowing that a specific customer has returned items previously could give insight into what kinds of products they may be interested in purchasing again. By using personalized marketing campaigns that understand each customer's preferences and history, businesses can tailor their campaigns more effectively and increase the chances of customers making repeat purchases. 

Remarketing campaigns can also help businesses increase loyalty by providing incentives for returning customers, such as special discounts or exclusive offers based on their purchase history.  

Developing incentive programs and other perks for repeat buyers who have made returns in the past is another great way to engage loyal customers while turning returns into growth opportunities. For example, offering free shipping on all future orders or providing exclusive discounts on select items could encourage customers to make additional purchases after returning an item. Consider offering refunds that include an option for store credit or an incentive to exchange instead of getting refunded. 

This gives customers greater flexibility when returning items while also giving them an extra incentive to make another purchase at your store rather than seek alternatives elsewhere. 

These strategies are all great starting points for businesses looking to turn returns into opportunities for growth and engaging with loyal customers. By utilizing automation, creating remarketing campaigns, developing incentive programs, and offering refunds with added incentives such as store credit or exchanges, businesses can improve their overall customer service and increase customer loyalty, which translates directly into increased sales over time. 

Furthermore, taking steps such as these can help build trust between a business and its existing customers, which is essential if any business wants to grow sustainably over time.

How Cross-Store Selling grows your Shopify store

Want to know the open secret to growing your Shopify store? It’s Cross-Store Selling. With Cross-Store Selling, your brand can sell products from other stores and vice versa.

Sell your products on other brands’ websites

With Carro, we have a directory of the biggest brands for you to partner with. This means they’ll sell and market your products to their customers. But if you can’t decide which brands are the best fit, we have a tailored recommendation service where we introduce you to brands so you can begin working together.

The best part is you don’t have to pay for products like you would with traditional wholesaling. This allows you to choose different SKUs to see what complements your existing product catalog.

"Take my word for it, if you install Carro, you are going to see what I’ve seen. Which is a dramatic increase to average order value, especially on orders that contain Carro products, which for us is over 80% increase to AOV." 

Ryan Pamplin, Founder & CEO of Blendjet

Virtual inventory makes fulfillment and returns easy

Brand partnerships are not like wholesaling. With Carro, you don’t have to buy products from your partners. Instead, orders are automatically sent to your partner brands so they can handle fulfillment themselves. 

Even better, our partnership with Loop makes returns easy to manage. 

“Before we joined Carro, we had put our company on the market. We thought we needed capital to expand our traditional wholesaling. Now, we’re able to meet our goals without having any cash come out of pocket. We’re tripling and quadrupling the numbers of units that we move because we have access to so much more inventory.”

Amy Richardson-Golia, June & January

Find new bundling & upsell opportunities to increase AOV

Perhaps the most exciting reason to leverage Cross-Store Selling is that it’s the best way to grow your Shopify store in the long run. By working collaboratively with other brands, your brand will set itself up for success. Your Shopify store will become THE destination for your niche. 

One of the best reasons to shop on Amazon is convenience. Being able to buy everything you need in one place is a powerful motivator. Wouldn’t you love it if your Shopify store was the go-to place for your customers’ needs?

"In addition to a nice contribution to the bottom line, it was also one of the most highly-engaged social posts for the year." 

David Krimper, Director of Shopify, Manduka

To learn more about how Carro can help your Shopify store grow, check us out on the Shopify App Store.

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