Turning Pitfalls into Profit

The new frontier of online retail dominance presents an increasing level of difficulty when curating the e-commerce customer experience. Shifts in generational habits and the move to digital and e-commerce from brick and mortar shopping have forced retailers to step up their customer service to acquire and retain customers. Business are utilizing lots of flash and sizzle in their online marketing techniques, but sometimes perfecting the basic services and looking for opportunities in the exceptions can provide a win-win for both the customer AND the retailer. 

One of our partners, a global fashion retailer, reviewed analytical data and noticed something that led to further discovery. The high number of abandoned shopping cart items was cause for curiosity. Why would someone go to the trouble to shop for and select an item, and then abandon it? After conducting an impromptu survey of the accounts associated with the abandoned cart data, they came up with some statistical data which showed the two main reasons for abandoned cart items were:

1. Worries about fit, fabric, and/or color
2. Having second thoughts about the overall purchase commitment

After some discussion, we determined that both reasons are most likely directly related to the lack of the ‘hands-on’ experience in a virtual world. No matter how exact a photograph, rendering, or diagram appears, it is still difficult to determine personal fit, fabric feel, construction quality, and small details which can make the difference when finalizing the purchase. That combined with the uncertainty of the returns process can cause a loss of enthusiasm as the customer gets closer to completing the purchase.

We decided, in part, to combat this by embracing and streamlining the return process. The goal is to make the customer feel 100% confident that if they don’t like the item for any reason that we’ll make it easy to send it back. For perspective, they shipped a very high very volume of cartons per day, and the actual return rate was under 0.1%. The existing returns process was basic and a bit cumbersome for both the client and their customers. The customer had to initiate the return via email or phone call. Once the purchase was verified, the client’s customer service rep manually issued the return label via email. Although not overly complicated, it still involved extra steps for all parties.

We determined that the ideal software solution would be to include a “prepaid” return label with every carton. The client was willing to take the gamble that we’d still see fewer than 0.1% of the labels being used. However, it would increase customer confidence in the process and give them a sense of insurance that they would like the items they are adding to their carts. After some intense negotiations with the current parcel carrier, it was agreed that return labels would be provided with packing lists in all cartons, but they would only bill the client for return labels which were actually used by the customers. For customers, this ultimately encouraged more shopping! The marketing team spread the word online about the new terms and encouraged the no hassle, no commitment returns policy. Order in every size, return what you don’t want, no problems, no phone calls, just slap on the label included in the original packaging and get an immediate refund when the items are received back at the warehouse. The exciting byproduct of this is that the overall daily carton average increased and the number of returned cartons actually dropped significantly. The freedom that customers felt by having that return label as insurance helped them relax and shop with more abandon—then ended up keeping most of it anyway! Our client turned an unpleasant process into a profit center. Call a Katalyst consultant today to find out how we can help you maintain world-class customer service.

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