How returns automation is helping businesses scale sustainably
Carly Greenberg
·November 8, 2024
If you’re a small to mid-sized ecommerce business, you’ve probably started exploring opportunities to use automation to help grow your brand faster.
One key area where automation makes sense is during the post-purchase process: Depending on the industry, up to 25% of online product sales end up getting returned.
Without an efficient returns management process in place, you’ll end up spending a disproportionate amount of your CX time dealing with customer returns, with poor visibility into the status of your returned items. Shoppers also pay the price, with long wait times and lack of clarity around return policies—resulting in return experiences that may alienate them from your brand.
Automating your returns process can help you streamline returns logistics operations, cut costs, and deliver a better customer experience. Let’s dive into some data around returns automation, with tips for choosing the right solution.
Returns automation by the numbers
Small businesses can see the biggest impact from returns automation: Our study found that small businesses that transitioned from a manual solution to automated returns with Loop saw an average increase in customer lifetime value of 22%.
Mid-sized businesses are typically making the shift from an alternate solution—and they saw considerable ROI by making the move to Loop. Mid-sized businesses switching from another solution saw an average 8% increase in first-time shopper CLTV.
For both small and mid-sized businesses, the rewards increase over time: Combined, both types of businesses saw an average 17% CLTV after their second year using Loop compared to their first year.
In addition to higher CLTV, merchants can see significant cost savings by switching to Loop. Brands that are moving from manual solutions can save up to $2,500 each year for every 1,000 returns processed. And mid-sized businesses typically save an average of $3,400 in the first year in CX time savings.
Choosing the right returns automation solution
Whether making the move from a manual solution or a different returns management tool, it’s important to choose wisely. Making the wrong choice now means that you’ll be on the hook for additional costs and onboarding time if you decide to make a switch later on.
That means you should be thinking not only about where your brand is today, but where you hope to be in the future—whether you’re planning your growth strategy from small to mid-sized, or mid-sized to enterprise, you should ensure that you have the right tools to help you scale seamlessly.
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Book a demoTo that end, consider these factors in choosing your solution:
- IntegrationsDoes the platform integrate with the tools that you’re already using in your tech stack? It’s also important to look at your technology roadmap—if you have plans to migrate to new solutions in the coming months or years, will the returns solution be able to integrate with them as well?
- ScalabilitySome returns solutions are great for small businesses, but have feature limitations that don’t make them an ideal fit for quickly growing brands. Ensure that the solution you choose has features that are designed to support you as you scale, with the bandwidth to handle increased demand.
- FlexibilityMany brands have custom needs when it comes to returns, so a one-size-fits-all approach won’t work. Choose a solution that offers customizable returns workflows and multiple return options for customers, with both mail-in and drop-off return choices, and pricing models that work for your company’s growth stage.
- Merchant supportMake sure that you’re choosing a solution that offers hand-on merchant support to help you get the most out of your experience with the platform. You should have dedicated access to a merchant success manager who’ll be able to help you build a customized returns management strategy that fits your brand’s unique needs and goals.
- ReputationChoose a tried-and-true solution that’s already used by the leading brands you know and love, and has partner relationships with other technology providers you use. You can review their case studies and third-party reviews to get a better feel for how they treat their customers.
- InnovationFinally, make sure that the solution you choose is following ecommerce trends, and is actively working to solve problems for its customers, such as mitigating against fraud and returns abuse and covering return costs.
With the right returns automation solution, you’ll be empowered to streamline returns for both your team and your shoppers, resulting in higher operational efficiency, lower costs, and happier customers (who’ll be more likely to shop with your brand again).
Ready to learn more about how Loop delivers on all of these factors? Get in touch for a demo today.
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