How returns automation can lead to long-term growth
Samir Kamnani
·October 17, 2024
Want to build a sustainable ecommerce business that’s set up for long-term success?
Then don’t neglect the importance of post-purchase automation.
Customer returns are a common part of the ecommerce experience, with up to 30% of product sales ending in a return depending on the industry. But many businesses consider returns as an afterthought, relying on their customer support teams to handle return inquiries and manage the returns process. As a result, the CX team is likely to spend a disproportionate amount of time on return requests, with inconsistent enforcement of policies that can lead to lost profits—and a poor customer experience with slow response times that may prevent your shoppers from coming back.
By investing in automated technology to support your post-purchase operations, you’ll be better equipped to deliver a superior customer experience without scaling up your customer support. As a result, you’ll be able to create experiences that will boost your customer retention rates while driving efficiency and cost-savings through the organization.
Returns automation by the numbers
In our recent report, we dug into the data to learn how automated returns management impacted our merchants’ bottom lines.
Here are some of the key benefits of introducing automation to your post-purchase process:
Higher customer lifetime value
Our study found that businesses who switched to Loop’s automated returns management solution saw a significant uptick in customer lifetime value, with statistics including:
- A 6% increase in first-time shopper CLTV for enterprises who’d previously handled returns manually
- An average 12% increase in first-time shoppers’ CLTV across the board, including merchants who used both manual and other automated returns solutions
- Loop’s top-performing merchants have seen a 20% YoY increase in first-time CLTV between the first and second year on the platform
Cost savings
Moving to an automated platform enables businesses to scale up their operations without adding labor costs, resulting in impressive statistics like:
- Merchants moving from manual solutions save up to $2,500 annually for every 1,000 returns processed
- Enterprise merchants moving from manual returns see an average of $23,700 in savings in their first year
- Over a 12-month window (February 2023 to February 2024), Loop merchants were able to save an estimated $8.8 million in CX time, thanks to a drastic reduction in CX tickets associated with return status.
- By adding return shipping fees to their automated workflows, Loop merchants were able to save an average of 10% on reverse logistics fees—with some brands saving as much as 75%. Even after adding return shipping fees, the average repeat purchase rate remained stable at 48%.
Faster time-to-resolution
When brands are processing returns manually, customers can be left waiting a long time—both to initiate their return and receive their refund. That results in a poor customer experience that makes it less likely they’ll make a repeat purchase from your brand. (Nearly 80% of shoppers won’t buy from a brand again after a negative post-purchase experience.)
- By automating the returns process, Loop merchants were able to reduce Time to Resolution by 2.4 days (9.86%) within the first year. By resolving issues nearly 10% faster, they’re able to deliver a streamlined and consistent customer experience that drives more repeat business.
Key features in returns automation
The data doesn’t lie: Using automation in your returns process can have a huge positive impact on your business. So how can you master the process?
Focus on using returns management technology with these key features:
- Integrations
- Ensure that your solution integrates with the rest of your ecommerce tech stack, working seamlessly within your Shopify ecosystem. Your solution should integrate with popular tools like Gorgias, Attentive, and all the major postal carriers.
- In-transit processing
- Make inventory tracking a breeze for both your business and your customers by ensuring that your solution automates processing events when items are scanned in by the carrier, eliminating the need for manual entry.
- Fraud prevention features
- Prevent likely cases of fraud and abuse by setting conditions for returns, such as manually inspecting and handling returns from customers who’ve been flagged for abuse in the past.
- Instant exchange features
- By making the exchange process seamless, you’ll encourage customers to choose a new product from your store rather than requesting a refund, helping your brand retain revenue and boost customer retention.
- Flexible returns
- Make it as easy as possible for customers to get their return back to your brand in the way that makes sense for them. Let them choose between self-shipping or drop off options—or even return the product to one of your stores if you have a retail location nearby.
- Offset return costs
- Cover your reverse logistics costs and protect profit margins with an Offset feature that encourages shoppers to purchase return shipping protection upfront, leading to an improved post-purchase customer experience that helps you boost your cash flow.
By implementing a robust returns management solution that automates the post-purchase process, you’ll be able to deliver a high-quality, customized customer experience while reducing your operational costs.
Learn more about winning with automation. Book a demo of Loop.
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