The Complete Guide to Retail Returns Marketing
Did you know that 62% of consumers who’ve had a poor returns experience with an online retailer are unlikely to re-engage? That’s just one of the downsides of not taking a strategic approach to retail returns management.
However, when managed properly, returns need not be just a “cost of doing business.” Instead, it can be an opportunity to engage with customers and drive more sales. Being strategic with your returns marketing also entails fewer instances of returns and cost savings on reverse logistics.
Michele Marvin, VP of Appriss Retail, says, "The point-of-return is an underutilized customer touchpoint, despite being a pivotal opportunity to preserve shopper satisfaction. When a customer starts a return, it becomes the retailer's job to redirect them toward other products by delivering strategic messaging, promotions, and discounts designed to save the sale. When retailers invest in the returns process, they are guaranteed to see improvements in customer loyalty and profitability."
With that in mind, let’s explore the world of retail returns marketing including some effective returns marketing strategies that can boost sales.
What is retail returns marketing?
Retail returns marketing refers to the techniques retailers may use to manage their returns processes optimally, such that they become part of their growth strategies.
It involves using the returns process to interact with customers, identify their needs and preferences, and grow sales via tactics like offering personalized recommendations for alternative products, etc.
Essentially, there are three aspects to retail returns marketing: optimizing cost, preserving revenue, and improving the customer experience. The right strategies will help retailers achieve each of these goals.
At a glance: the top returns marketing tactics to implement
Returns marketing tactic
Why it works
A 5% discount could persuade 39% of customers (who are ready to return an item) to retain it, while a 30% percent discount could persuade almost 59% of such customers.
Provide personalized recommendations
78% of consumers indicate that personalization encourages them to make purchases.
Suggest alternative products
Offering alternatives may encourage people to exchange their item instead of returning it and asking for a refund.
Offering exclusive member perks (such as free returns) may encourage shoppers to join your loyalty program.
Collecting feedback gives you the opportunity to understand customers better, so you can market to them effectively.
Your returns portal can be used to make personalized recommendations, as well as product upsells and cross-sells.
In-store returns attract traffic to your physical stores, which can ultimately drive sales.
How to integrate marketing into the returns process
Now that we know what returns marketing means, let’s take a look at some of the most effective steps you can take to achieve your objectives of reducing returns, boosting sales, and elevating the customer experience.
One of the easiest ways to implement returns marketing is to offer incentives to first-time customers if they don’t return a product. The incentive could be a coupon or discount on their next purchase.
A recent study by PYMNTS research found that even a 5% discount could persuade 39% of customers (who are ready to return an item) to retain it, while a 30% percent discount could persuade almost 59% of such customers.
REI, for example, has a “Co-op Membership" program that rewards customers with a 10% annual dividend on the purchases they choose to keep. Purchases that are returned don’t qualify for this reward, which is a great incentive for customers to keep them. This helps REI reduce instances of returns to an extent while creating opportunities for future sales (where customers can redeem their rewards).
2. Personalized recommendations
McKinsey recently found that 67% of consumers expect brands to send them relevant product/service recommendations. 76% of them also said that personalized communications were a crucial factor in getting them to consider a brand, while 78% said such content encourages them to repurchase.
All this to say, using data on a customer's previous purchases and returns to craft tailored product recommendations is a great returns marketing strategy. Something that Amazon does a wonderful job of.
When a customer initiates a return, they are required to select a reason and explain why they are returning the item. Amazon uses this information (along with other behavioral/preference data) to tailor future product recommendations to the customer.
3. Alternative products
Another great returns marketing strategy is to suggest alternatives to customers for the items they are returning. For example, considering that “the wrong fit or size” is the #1 reason for online product returns, there is a real opportunity here for you to convert these return instances into seamless exchange experiences.
4. Loyalty programs
Another way to dissuade shoppers from returning your products is to offer rewards or incentives for customers who make fewer returns. You could have them as part of your loyalty program.
As such, “free returns shipping” is the #1 factor that most shoppers care about when returning products. So, one way to optimize your returns management is to offer free returns only to your most loyal customers and charge everyone else.
DSW, for example, offers a tiered loyalty program with one of the perks being free online returns for customers who spend more than $200 annually with them.
5. Feedback surveys
Returns are also an opportunity to understand your customers better. By collecting feedback about their returns experience, you’ll have a clearer picture of why they send back items. This can help you optimize various internal processes such as product design, operations, customer support, etc.
For example, Best Buy takes every measure to elevate the customer experience. It uses customer feedback to promptly replace items that were returned due to being damaged on receipt.
6. Returns portal
Being able to initiate a return quickly and easily is vital for today’s consumers. In fact, 92% of consumers prefer online retailers that offer a seamless returns experience. Yet, only 23% of retailers offer customers the ability to track their returns. Further, just 18% of shoppers think retailers are proactive with their returns-related communication.
This is where an intuitive online returns management portal like parcelLab can be super helpful. For example, the multi-channel bookseller Weltbild had no means to communicate with their online customers post-purchase which was negatively affecting the customer experience. With parcelLab’s support, the company was able to:
Connect with customers at every step of the sales journey
Send automated communication at the best possible times throughout returns, delivery, and delays
Provide an Order Status page that allowed customers to track their orders without having to call in
Besides giving customers the ability to initiate and track their returns easily, the parcelLab solution also allows you to make returns a shoppable customer touchpoint by suggesting alternative products (or ones that may fit better). This way, you can increase revenue from the Order Status page by converting returns into smooth exchange experiences.
7. In-store returns
Asking customers to drop off their returns in-store is a lucrative option for retailers. Not only do you get to save on the costs of reverse logistics, but you also get an opportunity to convert them once more. This is a win-win since 58% of consumers prefer to return products in-store so they can avoid the return shipping fees.
DSW, for example, allows their lower-tier loyalty program members to return items for free at their physical stores. This is a great opportunity for them to get these customers to experience their brand and interact with their trained staff, which may potentially convert into a sale.
Even though they may be costly, returns offer a fantastic chance for brands to cultivate and strengthen their customer relationships and boost satisfaction. In today’s competitive world, a one-size-fits-all approach isn’t going to cut it.
If you want to take your business to the next level, you must focus on personalizing your post-purchase communications and simplifying the returns process for customers. Follow the tips mentioned above to get the most out of your returns marketing and contact us to see a demo of the parcelLab platform in action.
Read all of the Returns Management Playbook Chapters:
Chapter 1 - What is Returns Management?
Chapter 2 - Returns Management: Challenges and Best Practices
Chapter 3 - How to Reduce Your Return Rate: 11 Tips For Fewer Returns
Chapter 4 - What is Self-Service Return?
Chapter 5 - Guide to Retail Returns Management
Chapter 6 - The Best Return Management Software
Chapter 7 - Understanding B2C Europe Returns
Chapter 8 - The Complete Guide to Retail Returns Marketing 👈 you are here
With over two decades of experience in B2B technology companies, Sidra brings a wealth of knowledge and expertise to her role. She holds an MBA and is also a proud mom to a teenager.
Sidra's passion for marketing is driven by her curiosity and love for understanding how things work. She is committed to staying up-to-date with the latest trends and technologies in the industry and leveraging them to create innovative marketing strategies that drive business growth.
As a strong advocate of stepping outside of one's comfort zone, Sidra lives by the motto "Do one thing every day that scares you," coined by Eleanor Roosevelt. She believes that taking risks and pushing oneself beyond perceived limitations is key to personal and professional growth.
In her spare time, Sidra enjoys spending time with her family, traveling, and exploring new cultures.Read more from Sidra