Webinar recap: Future of Australian commerce: Sustainable growth in a shifting market
Vaishali Ravi
·July 1, 2024
In a rapidly shifting ecommerce market, how can Australian ecommerce brands hit their growth targets without cutting into profit margins?
In our recent webinar, Vaishali Ravi, our Senior Product Marketing Manager, dove into the latest data and trends shaping the future of ecommerce with two experts from Australian fashion brands: Sarah Minnick, Customer Care Optimisation Manager at the bikini brand Kulani Kinis; and Lawrence Lees, CEO at the women’s apparel brand, Outcast Clothing.
We took a look at 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’s a recap of our experts’ strategies for addressing each topic.
Rethinking post-purchase retention
Building a strong customer relationship is absolutely essential, especially in times where consumers don’t have as high purchasing power as they did in the past. Our survey found that 35% of business revenue comes from new customers, while 65% comes from existing customers on average. And 49% of customers that left a brand in the past 12 months say that was due to poor customer experience.
As such, it’s crucial to prioritise strategies for building long-term, loyal relationships with your customers to boost retention and reduce your customer acquisition spend.
Focus on the customer experience
At Kulani Kinis, “what we try to do is provide a great service and a great product,” says Minnick. While that might not seem to have much to do with post-purchase retention, these simple elements of a great customer experience are key to building customer loyalty. “We provide a really streamlined and easy checkout, and then great customer care at all points throughout that journey whenever they might need it,” she adds. “We find that by really focusing on good service and good product, it helps us to bring customers back.”
Have a plan for growth
As you scale your business, it’s also important to make sure that your customer experience remains consistent.
Lees says scalable growth took a little while for Outcast to master. “Every time we moved a warehouse, there were orders not going out on time, and people returning things to the old warehouse. It was just chaos and all over the place. So I think having a plan for growth is incredibly important.”
To improve the process, Lees says, great customer support is crucial. “They know exactly what is happening in the business at all times and they can come back to the customer and give them the information that they’re looking for, and go above and beyond what they could expect.”
Automate manual tasks to facilitate high-touch interactions
“We love to get to know our customers on a personal level, but that becomes more difficult as we scale,” says Minnick. To address that, “we automated as much as we could and embraced AI to help us tackle those easier questions,” so that they could take the time to engage more personally with their customers who wanted to build a relationship with the brand, helping them boost customer loyalty rates. “Automation has really helped us to do that.”
Minimising operational costs
With consumer inflation jumping by nearly 20% between January 2020 and January 2024, ecommerce brands need to look carefully at their expense reports to understand where they can afford to cut costs without cutting corners.
Optimise your supply chain
“In terms of optimising the supply chain, what we’ve found effective is just analysing the data,” says Lees. “Where are most returns coming from, what regions are there and where can we consolidate those returns?”
As a result, Outcast has begun utilising return hubs in the U.S., Europe, and the U.K., where their returned products are consolidated. “From there, I’ll be sending them back to a 3PL in the U.S., as opposed to sending it all the way back to Australia, where it’s going to cost us a huge amount of money.”
Expanding internationally
For Australian brands, expanding across international borders can help you rapidly scale the size of your market—but there are a lot of variables to consider when entering new markets. For instance, 55% of ecommerce merchants say that they find cross-border ecomm challenging due to delays, compliance, supply chain, delivery costs, and tariffs.
Localise your content for new regions
“When we look at countries that don’t speak English as their first language, for example, it’s becoming more important to localise that,” says Lees. Additionally, “we have a massive cultural moments marketing calendar, so we can play off of that depending on what time of the year it is. Is it festival season in Germany or Australia or the U.S.? So we learn to tailor it that way and we can get pretty specific with our messaging.”
Finding the right logistics partners
“When you’re trying to find the best-in-class local operators, especially if you aren’t at a huge scale for international, working with the more boutique operators might help,” says Lees. “Obviously, as you get to scale it gets a little bit harder, but having those people that you can trust on the ground in those international markets are really important.”
Finding best-in-class last mile providers is a huge piece of that, he adds. “There’s nothing worse than having a good customer experience leaving Australia, but once it lands into an international country and having a bad experience, that’s just going to make everything fall down.”
When it comes to logistics, Minnick says that it’s important to give your brand a buffer around delivery expectations. “I think clarity around messaging, and making sure customers know exactly what to expect when that delivery is happening are really important,” she says. “If we think it’s going to get there in six days, we might give ourselves a buffer and say maybe eight days, just so that customers can be excited and pleased when their delivery arrives a few days early.”
Protecting against rising return fraud
Finally, ecommerce brands worldwide are seeing a huge jump in fraudulent attempts: Return fraud and abuse jumped by 13.7% from 2022 to 2023, resulting in a $10.40 loss for every $100 of returned merchandise.
What strategies are our experts using to combat it?
Limit the impact of bracketing
One common form of return abuse is bracketing, in which a customer might buy multiple items with the intention of only keeping one. Kulani Kinis has found a successful strategy to limit bracketing: “One thing that we do that is probably not common is that we have an $800 order limit value across all of our websites,” says Minnick. “Even though huge orders are great, of course we want to sell $5,000 worth of product. But we know in Swim that a lot of that would probably come back, and we’d spend a lot more money handling those returns than we want to.”
When customers do process returns frequently, “we engage with them to offer them sizing and style help, and get started on that customer loyalty and retention journey by giving them really great service upfront to help them find pieces that will fit and work for them.”
Educate customers on the returns policy
Make your returns policy clear and simple, including it on every page of your website. “It’s important to educate your customer on the returns policy, because not every customer wants to go through and read the return policy,” says Lees.
And sometimes customers make honest mistakes, such as sending back final sale items. In this case, Kulani Kinis’ support team personally reaches out to the customer to let them know the item isn’t eligible for a refund. “Then we offer them either store credit for that item, or we offer to send it back to them if they would like to pay the shipping to have it back just in case it was a mistake,” says Minnick.
Regularly review and update your policy
It’s also important to look at the data and customer feedback to regularly review your returns policy, says Minnick. “Do we need to change our policy to better fit our customers, and provide that surprise and delight to make them happy with their returns process?” Make sure that your policy works well for both your brand and your customers.
By creating a generous policy that limits abuse while prioritising a great customer experience, you’ll be able to build a brand that your customers will come back to time and again.
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