The world of ecommerce is in constant flux. As a British merchant, it’s important to nail down the right strategies for sustainably scaling your business, both domestically and internationally. 

In our recent webinar, Calum White, Partner Manager at Loop, explored key insights for achieving sustainable growth in an uncertain market with our expert panelists, Emily McMorran, CX Lead at women’s fashion retailer Oh Polly; Timothy Richardson, Founder at the ecommerce agency Your Basket Is Empty; and Tom Mucklow, Founder at the ecommerce agency SuperCo. 

We focused our conversation around four key trends that Loop uncovered in our Future of Commerce report: Rethinking post-purchase retention, minimising operational costs, expanding internationally, and protecting against rising return fraud.

Here are some of the biggest takeaways from the conversation. 

Rethinking post-purchase retention

During an era of rising customer acquisition costs, it’s more critical than ever to hold on to the ones you’ve already got. We found that only 35% of business revenue comes from new customers, while returning shoppers are responsible for the other 65%. 

Nearly half of customers will leave a brand due to a poor customer experience, so it’s critical to prioritise strategies for building strong and long-lasting relationships.

Leverage the power of a loyalty program

McMorran says that Oh Polly’s loyalty program “is key to getting customers back by offering incentives. [We encourage them] to work their way up the different tier thresholds that we have in our loyalty program, so customers can endpoint soft purchases. That encourages them to come back again and use their points on their next order.” The brand’s loyalty program has helped them drive more repeat purchases and keep shoppers from comparison shopping, she adds.

Build a personal relationship with your customers

Getting feedback on the customer’s experience with your brand is important, too. By tapping into these insights, you can respond effectively to keep your customer engaged.

Richardson gives the example of Sons UK, an ecommerce brand focused on hair loss treatment for men. “Every time somebody purchases something, they call them up three weeks afterwards and find out, ‘hey, how’s the treatment going?’” he says. “With Suns, they’ve got an intimate product and I think intimacy is probably highly correlated to more investment in things like post-purchase calls and surveys. A lot of it depends on the type of brand you are, and then trying to figure out ways in which you garner that kind of loyalty, connection, customer feedback, et cetera.”

Optimise your operational costs

With inflation jumping by almost 20% over the last four years, merchants don’t have room in their margins for error. Every dollar counts, so retailers need to take a critical look at their expense reports and identify ways to consolidate or eliminate expenses.

Conduct a TCO analysis

“You’ve got to take a step back, and I would encourage brands to do some sort of total cost of ownership (TCO) technology analysis every so often,” says Richardson. “So you map out 12 to 24 months, maybe a bit longer. And then I think what’s key is to break out that total cost of ownership line by line and figure out the return on investment on all of them.” Once you’ve completed it, you can determine what’s valuable to hold on to, and which apps to eliminate.

Find technology that fills multiple purposes

Rather than using a dozen different apps to address features that you need, look for opportunities to consolidate your tech stack with versatile apps that support many use cases at once, says Mucklow. “There’s an argument for just having one vendor for SMS and email and reviews if it all feeds into the same data warehouse, and you’re getting a discount or a better price. I’m all for smaller, more refined tech stacks.”

Leverage the power of AI through a development agency

“Post-launch, a great way of keeping operational costs down is to lean on an agency where you need it,” says Mucklow. “I see our world getting more refined, being pushed more towards the strategy world, whereas AI is slowly taking over. We use it across the agency both in development and in design. It just makes the work we do much faster, which means we can deliver more value to the client.”

Consolidate shipping costs with a 3PL

By outsourcing your fulfillment to a 3PL, you can more easily ship items to customers internationally and domestically, taking advantage of your 3PL’s negotiated shipping rates which are likely to be lower than your own. “We are looking at 3PLs and looking at ways that we can reduce delivery fees, return fees, and delivery timeframes, just to make that as quick and easy for the customer as possible,” says McMorran. “We want to reduce those costs and the SLAs for customers internationally, so that we can expand better in those markets.”

Combat return fraud

Many forms of return fraud and abuse are spiking, with fraud rising by 13.7% from 2022 to 2023. When it goes undetected, it can seriously impact your bottom line: Merchants are losing $10.40 for every $100 of returned merchandise due to return fraud. 

It’s important to find ways to identify fraud attempts, and put mitigation practices in place to stop it.

Set up safeguards to prevent abuse

At Oh Polly, the brand strikes a balance between facilitating hassle-free returns and preventing return fraud. In general, “by the time a product has got to the consolidation hub and then come all the way back to us, we don’t want the customer waiting that length of time to get their refund,” says McMorran. “So what we do is we trigger it in transit or drop off.”

However, some customers have taken advantage of that policy by sending back an empty or weighted box, or shipping used merchandise that wouldn’t qualify for a refund. 

To limit the impact of such abuse, “we do have some parameters in place to prevent fraudulent returns coming through, one of which is thresholds. If a purchase is over X amount, it has to come back to us [before we process a refund],” says McMorran. “We also monitor if a customer is a repeat fraudulent returner, then we do track that as well and we contact them.”

Strike a balance

Make sure that the fraud prevention policies you put in place aren’t so strict that they scare off your customer base, however. 

“I think you’ve got to find that balance between the good customer experience that you are giving them, but then at the same time saying, ‘let’s clamp down on all the fraudsters,’ when maybe they’re not all fraudsters,” adds Richardson. “Try to find that balance between being fair and assuming that your customers are law-abiding citizens and normal people, versus trying to penalize the good actors in your customer base with stuff that you would do to the bad actors.”

Creating a generous returns policy with safeguards in place to protect against the most egregious forms of abuse will help you to maintain positive customer relationships while protecting your profit margin.

Want to learn more about how UK merchants are building strategies to navigate the current economic climate?