Returns Academy
Jay Gittens is a product marketing manager with a wealth of retail technology experience. Prior to joining Narvar, Jay spent more than three years working in product marketing at Shopify.
Jay Gittens (00:00):
Hi, I'm Jay, and I'm a Product Marketing Manager here at Narvar. Today I'm here to help answer the question, "How are customer expectations evolving as it relates to returns?"
Jay (00:20):
To me it's pretty simple—we live in the age of convenience.
Think about all the apps we use and our expectations as a consumer—they're all rooted in convenience.
We're used to two-day and next-day delivery. We're used to shopping without cashiers. We're used to getting groceries delivered to our doorsteps.
We stopped taking taxis because it's easier to just order an Uber or Lyft from our phone.
We've embraced a convenience-first mentality, and we now expect ease and convenience everywhere we go.
Jay (00:45):
So, what does this mean for retailers and brands?
Well, it means that the experience a brand provides is just as—and sometimes even more important than—the product that that brand offers.
With e-commerce platforms like Shopify that make it easy for brands to start and sell anywhere, brands spend a lot of their dollars differentiating their business and making it very easy for the customers to click "buy." But what we have to remember is that the customer experience simply doesn't end after the customer clicks "buy."
It's a cyclical journey, and the post-purchase process is critical to closing the gap and delivering the convenient, end-to-end customer experience people want.
Jay (01:21):
Here are some stats...
I'm sure many of us can relate to those stats, but the one that matters to me the most (as a marketer and a shopper) is that all it takes is one bad experience to lose the customer for life.
Acquiring a new customer costs 5X more than retaining an existing customer, so that one bad experience can have a massive impact on your business and your bottom line.
Jay (02:04):
Listen, we're all online shoppers. We've all had the experience of trying to return something we've bought online. It goes one of two ways—it's really easy or it's really bad. What matters most is that you have a frictionless experience, and it's just as easy as clicking "buy."
The returns process isn't just a nice-to-have thing anymore. It's a critical part of the selling journey, and the experience is just as important as the product. The brands that do that right are the ones that build lifelong loyal customers because they're offering a standard of buying experience that matches today's consumers expectation, which boosts retention and loyalty for the long-term.
Jay (02:38):
Returns aren't simply an add-on—they're a competitive advantage.
If you want to know how to make your returns into an advantage, here's exactly how you can start doing that today:
Jay (03:14):
Use these tips to easily transform your returns profit into a competitive advantage and make sure that your brand delights customers by surpassing their every expectation.
For more than four years, Genevieve Easterling has been helping retailers create better buying experiences through her work at Narvar. She specializes in supporting the world’s most innovative brands thrive in an ever-changing consumer landscape.
Genevieve Easterling (00:09):
Hey, I'm Genevieve Easterling, Director of Customer Success at Narvar, and today I'm here to talk to you about what role the returns process plays in customer loyalty.
Genevieve (00:21):
I'm guessing you wouldn't be here if you didn't already know that [the returns process] plays a big role in loyalty. In fact, we're seeing an increasing number of consumers report that they won't even make an initial purchase without the confidence that their returns experience is going to be seamless.
Genevieve (00:35):
Consumers seek out retailers that offer free returns and convenient methods for drop off, whether that be a store location or whether that be a partnership with a third-party like a Walgreens or a FedEx. That's because consumers want flexibility when things don't work out (no matter the reason they don't work out).
Genevieve (01:01):
The challenge, of course, is not how do you make your customers happy but, ultimately, how do you make them happy and keep them happy in a sustainable way?—Free returns are nice, but so is staying in business.
Genevieve (01:11):
So, I've got a few recommendations from things that we've seen with our retail partners. One of those is going to be free returns for your best (VIP) customers.
Depending on the stage of your business, there may be no need to offer free returns to all customers. We're seeing more and more that retailers are increasing the price here. They're putting a little bit of friction back into the flow to ensure that they're doing returns in a sustainable way.
Genevieve (01:38):
Use free returns as a lever to promote customers creating accounts or joining loyalty programs—actions that you know increase lifetime value. Free returns can be the carrot—the enticing freebie—the secures the sale and makes the customer journey a little bit smoother for them.
Genevieve (02:00):
The next thing that we see to help boost loyalty through the returns process is doing an instant refund for refunds using gift cards.
For many consumers, myself included, once I make a purchase, sum cost, taking the money out of my bank account, it's never coming back in—so what are you going to do to make it really easy for me to just keep spending that money with you?
Genevieve (02:23):
The key is giving loyal customers—those who joined your loyalty program or who've shopped with you before or who've spent "X" number of dollars with you in the past—faster access to their money so they can spend it with you again.
So, as soon as your customer chooses that gift card, give them the instant refund and the ability to keep shopping.
Those other customers that you don't trust as much?—Sure, you can wait until you receive and evaluate the returned item before issuing the refund, that totally makes sense.
But for your loyal customers?—Giving them their money back quickly in the form of a gift card is a great tactic.
Genevieve (02:52):
And then gone are the days of throwing a label in a bag and hoping it makes its way back to the retailer. So consumers expect an email once they submit the package or the return, and they want communication as it travels back on its way to your warehouse. They want to make sure that both their product is secure and they want to make sure that they know when their refund is coming.
Genevieve (03:14):
Use these communications as an opportunity to further build loyalty and continue to impress the idea that you are a retailer for them long term. So offer free shippings as part of this communication, or offer a one time offer to get those consumers back in the door and boost that long term loyalty.
Genevieve (03:35):
Consumers are just people. They want to know if things don't go right, you're still going to have their back. Always invest in your current customers and the loyalty and the lifetime value will follow. Thanks all.
As the Head of Retail Strategy at Narvar, David Morin is a skilled relationship builder, adept at navigating and managing diverse personalities in the retail and technology spaces. He works with cross-functional teams to define business strategies and be the voice of the customer in Narvar’s product road-map.
David Morin (00:09):
Hi, I'm David Morin, head of retail and customer strategy at Narvar. In this session, I'm here to talk about why revenue health will be tied to the returns experience going forward.
David (00:21):
Returns have always been a critical part of the overall purchase and post-purchase experience, but there have been many recent trends that have made returns more important than ever.
David (00:32):
First, the world of ecommerce has grown at a pace that's never been seen before due to the recent pandemic. As almost all consumer spending shifted to digital channels, more consumers entered the ecommerce market than before. As a result, more consumers got access to more brands and—at the same time—consumers were also more likely to try a new brand than ever before.
David (00:56):
This placed an increasing importance on not only the purchase experience, but also the post-purchase experience, including returns. Those brands that provided a great end-to-end consumer experience for their customers were more likely to convert the consumer again into a future purchase.
David (01:14):
Next, new and evolving regulations related to consumer PII and consumer data are placing increased importance on first party data, meaning that new customer acquisition is now more expensive for retailers and brands than ever before. The brands that are best positioned to thrive in this new world are those that not only have a strategic customer acquisition process for their purchase funnel, but also those that drive repeat purchases and loyalty from their existing customer base.
David (01:47):
One of the best ways to ensure repeat experiences and repeat purchases is to make the returns experience as easy and convenient as possible. When I talk to retailers and brands about the returns experience, I always put my "consumer" hat on—like many other regular online shoppers, I always check a brand's return policy before making a purchase. The easier the brand makes it for me to make a return, the more likely I am to continue my shopping journey and click "buy."
David (02:13):
Ultimately, it comes down to peace of mind and trust. If I know that I can easily return something that doesn't work out, I am more likely to try for the first time. This is especially important in the world of ecommerce where consumers don't have the ability to touch, feel, or experience a product prior to purchasing it.
What we always say here at Narvar, and what is certainly true in today's post-pandemic world, is that "the living room is the new fitting room."
David (02:45):
One additional area to consider as you think about your strategy is how brands incentivize customer loyalty in the returns experience, such as offering VIP customers, things like extended return windows, free return shipping, earlier refunds, additional store credit, things of that nature.
We've seen a number of brands launch consumer loyalty programs at an increasing rate over the last six months, and we predict that we'll continue to see this over the next 12 months as a great and impactful strategy to start winning a larger share of your consumer's dollar and having repeat purchases and loyalty at the heart of your purchase and acquisition strategy.
David (03:26):
Certainly we know that digital returns can be an expensive P&L item for all brands, and as we'll discuss in additional modules in our Returns Academy, there are also many strategies that brands can employ to retain revenue in the return process.
But the important thing to remember is that, ultimately, consumer convenience matters. Ensure long-term revenue health by building a returns experience that meets the needs and expectations of your consumer now and in the future.
Any customer looking to return a purchase is forced to reengage with the retailer in some capacity. As the retailer, you get to decide what that reengagement experience looks like. In this video, featuring Narvar's Tim Moots (Principal Product Manager) you'll learn how you can use your return experience to extend the customer journey in a positive way—a way that benefits your capacity to reduce returns, grow exchanges, and increase repurchase rates in both the near term and the long term.
Returns extend the customer journey in two primary ways.
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Generally speaking, any customer looking to return a purchase is forced to reengage with the retailer in some capacity. As the retailer, you get to decide what that reengagement experience looks like.
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At the most basic level, you can elect to offer refunds in the form of gift cards or store credit, forcing the shopper to keep their dollars with your brand ensuring earned revenue doesn’t fall off the books.
Indirectly, an easy, convenient return process drives customer loyalty which enables you to keep capturing value.
Even if your return process isn’t free, as long as it provides shoppers with exceptional convenience, it should allow you to keep capturing value long term.
In other words, don’t be afraid to charge return fees if you’re providing shoppers with a return offering that’s better than the competition.
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So, what does that mean?
It means your return experience—assuming it’s set up properly—gives you the opportunity to keep immersing shoppers in your brand.
For example, if your return process uses branded tracking pages, you can use those pages to continue to tell your story, providing alternate product recommendations and giving your customers a clear sense of value, even though they’ve decided to return.
This allows your brand to stay top-of-mind with the customer and increases the likelihood that they remember you when it’s time to make another purchase.
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At Narvar, we encourage retailers to use multiple touchpoints along the return journey to stay connected with customers:
These touchpoints do more than keep the customer informed—they provide your brand with another opportunity to cultivate a relationship and save future sales.
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For most retailers, the answer is a resounding yes.
When a customer initiates a return, their number one concern is getting their money back.
So, unless you’re in the 10% of retailers who offer instant refunds, it’s critical you provide shoppers with regular return-status updates and notifications.
You want them to know when their return is picked by the carrier, when it’s dropped off at your facility, and then their return has been accepted.
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Consider returns data, for example.
Return data can be used to improve both product strategy and your merchandising strategy by helping you answer questions such as:
Should we continue selling this particular product?
Or…Are products in this category being returned more than they should?
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The answers to these and other questions can be used to tweak and optimize the controls you have around your products.
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They’re an opportunity in that they allow you to continue cultivating relationships with consumers…
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They’re an opportunity in that they allow you to present customers with alternate product recommendations and exclusive win-back offers…
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They’re an opportunity in that they allow you to capture critical data that enables you to improve your product development and production positioning…
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But most importantly, they’re an opportunity for you to convey your commitment to convenience and simplicity in the customer experience—the two biggest drivers of customer satisfaction and loyalty in today’s retail environment.
In the world of retail, many view returns as a cost center. And because of that view, merchants believe they must do everything in their power to protect the bottom line by lowering their return rates. The trouble is, lowering return rates is becoming an exercise in futility, especially in ecommerce. In this video, featuring Narvar's Tim Moots (Principal Product Manager) you'll learn why you need to stop wasting your time and energy trying to eliminate returns. More importantly, you'll learn how you use the three most important elements of your return experience to retain more revenue and improve your profit margins.
In the world of retail, many view returns as a cost center.
And because of that view, merchants believe they must do everything in their power to protect the bottom line by lowering their return rates.
The trouble is, lowering return rates is becoming an exercise in futility, especially in ecommerce.
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Despite ecommerce purchases falling as a total percentage of retail sales last year, return rates are rising—for those keeping score, online merchants saw an average return rate of 16%.
The truth is, there’s no escaping returns.
Therefore, if you’re a retailer, you need to stop wasting your time and energy trying to eliminate returns.
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Instead, change your perspective.
Stop thinking of returns as a cost center and start thinking of them as an opportunity to drive revenue and grow lifetime value.
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With that being said, here are the three most important elements of your return experience—if you can improve these, you’ll succeed in retaining more revenue and improving your profit margins.
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Returning your purchase is already a stressful situation. Don’t add to the frustration level by making it hard to start.
How easy is it to find your return policy?
Are you evangelizing your policy in multiple places?
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How clear are the terms of your return policy?
Are you keeping things as straightforward as possible?
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How quickly can customers find and access your return portal?
Are you doing everything in your power to get people to submit returns in less time?
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These are just some of the questions you should ask yourself as you evaluate the entry to your return process. Your answers will determine how effective you are at transforming returns from a cost center into a revenue driver.
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Shoppers value convenience and choice.
With that in mind, think about what kind of options you’re offering for returns.
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Do you let shoppers exchange, or choose store credit?
Are you providing services that simplify the return experience such as printerless returns, scheduled drop off, or home pickup?
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How quickly are you issuing refunds?
How do shoppers track their return?
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In a world where flexibility and choice have never been more important, offering a wide array of options to shoppers stepping into your return experience for the first time can be an easy way to secure long-term loyalty which drives lifetime value.
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Unmet expectations lead to customer frustration and disappointment.
Because people are more likely to remember negative experiences than positive ones, leaving your customers feeling frustrated or disappointed with your return process is going to fuel churn.
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This is why expectation setting in the return experience is so important for retailers—if you can set and manage expectations from the start, you reduce the long-term likelihood of returns being a cost center.
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That being said, scrutinize how you approach expectation setting when it comes to returns, especially with regard to refunds and refund timelines which are generally the thing consumers are most concerned with.
As you think about expectation setting in regard to returns, don’t limit your evaluation to what shoppers experience pre-purchase. For example, you can use a tracking and notification system to manage expectations and keep shoppers in lockstep with both their return and refund status.
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Overall, managing return expectations is critical to delivering the kind of exceptional customer experience that keeps shoppers coming back. If you can learn to master expectation setting, you can mitigate negative return experiences, improve customer satisfaction, and create the long-term customer bonds that drive growth and success.
Scott Vandegrift spent more than 20 years at Gap Inc managing an array of product-led initiatives from customer fulfillment to API strategy. Now at Narvar as the Head of Product, Scott focuses on helping retailers reimagine what an exceptional omnichannel experience should look like from a shopper’s viewpoint.
Scott Vandegrift (00:09):
Hi, my name is Scott Vandegrift. I'm the Head of Product Management here at Narvar, and today we're going to answer the question, how does consolidation fit into the world of reverse logistics (a.k.a. returns)?
To that end, we're going to talk about three different items.
Scott (00:52)
First of all, what in the world is returns consolidation?
Think about it this way—when someone returns a product (let's say from their house to a final distribution center) it'll ship as a parcel or a package from their home to a distribution center via UPS, FedEx, or some other courier. In other words, that return will be treated as a single package from beginning to end.
Scott (01:29)
Doing it this way (moving a single package from Point A to Point B) generally costs anywhere from $5 or $6 at the low-end to upwards of $10 or $11 at the high-end.
Scott (01:45)
What consolidation does is take that package and instead of moving it as a single piece, it takes it to a consolidation point (or consolidator)
Think about what that does—instead of each separate return being sent to a final distribution center individually by its respective buyer, the returns are sent to a more local consolidation point where they can be compiled for more cost-effective, environmentally-friendly shipping to that final distribution center.
Scott (02:16)
So thousands of packages, or thousands of returns, can go to a more local consolidation point and then, from there, be put on a skid or pallet (or put into a gaylord box) before being loaded onto the back of a truck at once, where these consolidated returns will be moved to the final destination at once.
Scott (02:43)
What this does is reduce the cost of moving a single package from Point A to Point B by anywhere from $0.50 to $4 per package. You have small, individual transits to a consolidation point, and then one large transit for a group of packages to a final destination. That, my friends, is consolidation.
Scott (03:07)
So, the primary benefit of consolidation is lower parcel costs, pure and simple. Consolidation is the cheapest way to move from Point A to Point B.
But there's also an excellent secondary value that comes with consolidation—it allows you to provide value-added services.
Scott (03:28)
So value added services, or VAS, as it's known in the logistics community, is where the return is inspected for fraud and accuracy—it's a chance to assess whether the product should be sent all the way back to the distribution center, to a liquidation sale, or just disposed of entirely.
Scott (03:54)
And so within consolidation, not only are you consolidating product to reduce costs, but you can also provide these value added services.
By incorporating VAS instead of allowing all that product going back to the distribution center, the consolidator helps the retailer same time, money, and energy.
Scott (04:17)
Another value add is that the return or refund to the consumer can happen sooner. So, if it only takes a day to get a return to the consolidator and be processed, that refund can be issued to the consumer quicker, instead of waiting five, six, or seven days for a return to get to all the way to the distribution center.
Scott (04:40)
Now, a few call-outs as it relates to consolidation. Number one, you need to have enough volume. If you only have a few thousand returns a year across the United States, obviously it's going to be very difficult to get enough volume to fill one of those skids, or palletize it, or put it in those big cardboard boxes, to ultimately reduce the cost. So that's one call-out. You need enough volume. Probably at least 50,000 returns depending on where they're coming from, per year.
Scott (05:15)
The other piece about consolidation to consider is it can take a little bit more time. And so if it takes a few days for enough volume to hit that consolidator before it makes sense for them to LTL, or truckload it to the final destination, then it could take a few extra days for them to wait, get enough volume, send it back. So those are two call-outs around consolidation.
Scott (05:40)
So that's a little bit about consolidation today. I hope it helped. Have a great day.
A self-described entrepreneur at-heart, Deovrat Singh is the Head of Logistics Partnerships at Narvar. An expert in courier relationship management and on-demand services from first-mile to last-mile, Deovrat’s logistics knowledge is second-to-none at Narvar.
Deovrat Singh (00:09):
Hi, I'm Deovrat Singh, Head of Logistics Partnerships at Narvar, and I'm here to talk about the bottom-line impact returns consolidation has for retailers.
Deovrat (00:20)
Consolidation refers to shipping in bulk from a third-party location by routing a package to the nearest location from the customer to ensure the logistics footprint of each individual return is minimal.
Deovrat (00:35)
Narvar has partner facilities across the country to make sure you pay the least shipping cost to the carrier. While we have the parcel in our partner facility, we can do inspection, grading, and light refurbishment so that you can receive shelf-ready goods back to your warehouse.
Deovrat (00:53)
This impacts the bottom-line by reducing the shipping cost, labor needs, and warehouse space for processing returns. This is also a more sustainable way of shipping directly to your warehouse, as carbon footprint of individual package is reduced.
Deovrat (01:10)
We can also recycle unwanted goods at our partner facility so that the last mile cost is further reduced. This optimization not only saves you dollars, but also makes the world a better place.
Michael Haswell joined Narvar to improve its business development and corporate development functions. With more than 25 years experience working in tech, Michael’s resume features an array of specialties, including landscape analysis, product strategy, product development, go-to-market strategy, product incubation, and more.
Michael Haswell (00:13):
Hello, my name is Michael Haswell and I'm the Vice President of Global Partnerships at Navar. I'm here today to talk to you about returns consolidation—specifically, why your brand should care about returns consolidation, where you should start with returns consolidation, and what the future holds for returns consolidation.
Michael (00:38):
Okay. So why should you as a brand care about returns consolidation?
In a word, scale.
While everyone got excited about the unprecedented eCommerce growth during the pandemic, what few people realized was that online returns volume grew by 5X.
That's right—5X more growth in online returns compared to the growth of eCommerce. Last year alone in the US online returns accounted for $200 billion in merchandise.
Michael (01:25):
That surge in volume requires a scalable solution, and often scalable solutions mean diversity—fulfilling via buy-online pick-up in-store, ship from store, same-day delivery using local couriers, and much, much more. Put simply, getting an order to the end consumer with efficiency is an exercise in optimization and orchestration.
Michael (02:05):
The opposite is true on the return side. Returns is still very much a label in a box where that label is generated by a national carrier such as USPS.
Michael (02:26):
Ultimately, returns is still a consumer experience and consumers care about sustainability. In fact, one in five US consumers consider a brand's carbon footprint when making a purchase decision. So you must consider your returns network and how you consolidate consumer returns so you can present a more sustainable solution to the market.
Michael (02:55):
Okay, so hopefully I've convinced you that returns consolidation is something that you should take into account—but where should you start?
Where you should start is really a function of two things:
1) Where you are as a brand in your journey?
Do you have one DC or multiple DCs? Do you have a small store footprint or a a large store footprint? The nodes in your network will inform where you start with returns consolidation.
2) What are you solving for?
Are you a fast fashion apparel brand that must sell as much merchandise in-season as possible? If so, speed is what you're optimizing for.
If you're dealing with a high volume of returns and are just looking to drive efficiencies in your network, cost is likely where you're going to focus.
Michael (03:58):
We work with many brands who are early in their returns consolidation journey. One brand, an apparel brand, they have one distribution center on the West Coast. So the easy first step for them was for us to help them establish an East Coast facility where all the East Coast returns were consolidated and the parcels were loaded into pallets or gaylords.
Michael (04:25):
As you learned in the previous video, if you're looking for speed and return to stock, you focus—not on the shipping rates on the edges—but you focus on grading and sorting.
We only care about getting grade A and AA merchandise back onto the shelf as quickly as possible. Those that aren't fit for sale—maybe they're a refurbishment or a recycle–those can wait, but we need to get the grade A merchandise back into stock ASAP.
Michael (05:00):
So, again, where you start your journey really depends on what your network currently looks like and what you're trying to optimize for. And then what does the future hold? I believe we are entering a future of intelligent returns disposition that is consolidating returns in a facility where sorting and grading happens efficiently. Grade A merchandise returns to shelf, refurbished items are injected into resale and commerce channels, either white-labeled owned by the brand or through consumer eCommerce channels existing today.
Michael (05:54):
I think we also have an opportunity to pursue recycling and donation options, getting the right merchandise into the right channel as quickly and efficiently as possible...Even more complex use cases...If you are a direct-to-consumer brand that also sells through third-party retail, typically a brand will pursue a good, better, best strategy where:
Michael (06:34):
Oftentimes, the best inventory is in-season inventory, but what happens when a return arrives out-of-season?
Well, that "best inventory" is now going to be downgraded to "good" or "better", even if it was originally sold by the brand directly to the customer. So, at this point, should it go to the third-party retailer channel? I think that level of optimization is what the future holds for returns consolidation, it's a topic that I'm very passionate about. It is a very fluid and evolving space, and there is a rich and diverse partner ecosystem. So if you're interested in learning more about the partner ecosystem, you can contact me at partnerships@navar.com. Otherwise, have a wonderful day.
Joseph Valentine - Senior Sales Executive, ReBound (formerly Cycleon)
Also known by the moniker “Mr. Returns”, Joseph Valentine helps brands build sustainable returns management solutions at scale. In doing so, Joseph empowers ReBound’s clients to lower their costs, improve their customer experience, and minimize their carbon footprint.
Michael Haswell - VP of Partnerships, Narvar
Michael Haswell joined Narvar to improve its business development and corporate development functions. With more than 25 years experience working in tech, Michael’s resume features an array of specialties, including landscape analysis, product strategy, product development, go-to-market strategy, product incubation, and more.
Michael Haswell (00:12):
Well, hello everyone. Welcome to the Returns Academy, our ongoing series about all things returns. I'm here with Joseph Valentine, who's the North American sales lead for our partner Cycleon, and we are going to focus on returns consolidation. But before we do that, let me introduce myself. I'm Michael Haswell. I'm Vice President of Global Partnerships at Narwar. And Joseph, please introduce yourself.
Joseph Valentine (00:45):
Yeah, Joseph Valentine. Thanks, Mike. Yeah, senior sales executive for Cycleon on here in the North American region. Just a little bit of background, I've been with Cycleon just about four years, but been in reverse logistics for a better part of a decade. And small fun fact, I'm a retired baseball player of 12 years.
Michael (01:06):
Wow. Putting us non-athletes to shame, but you don't have to be an athlete to understand the return space. So, first question for you, how do you see the market developing for returns consolidation? Are you hearing that from more and more brands as you're in market?
Joseph (01:26):
Yeah, absolutely. I think those conversations are happening in a frequency that they've never happened before. With that being one of our core competencies, we really already have that in place, but we all have lived through COVID and seeing the issues that it had on some businesses. And what we're having brought to us is trying to fix their supply chain and getting returns back into first sellable goods, but also trying to mitigate the ever growing carrier costs.
Michael (01:59):
Right. Right. And help me understand how Cycleon is solving sort of specific use cases or specific problems. How do you tend to engage with these brands?
Joseph (02:11):
Yeah, it's a great question, Mike. Yeah, so what we are really trying to accomplish is global scale, local field type of approach to consolidation. Because we are global, we do have an expanded footprint that we're able to leverage in getting into a market with more volatility, and we're getting closer to the consumer to help offset some of the carbon footprint issues and also giving a more local field to the consumer. So, not only are we focusing on consolidation, but also giving that global approach, local feel type of solution.
Michael (02:51):
Right. You mentioned carbon footprint, and I know many brands are trying to mitigate costs through consolidation, but what other pain points or things are brands trying to solve for in returns consolidation?
Joseph (03:10):
Well one, I think yeah, is reducing wasted movement, right? Because if we're doing some consolidation and touching that product in a more local market, we're reducing some movements by being able to redirect that out to yeah, the local market, like I said before. Also, yeah reducing... Let's say dunnage, so poly bags, cartons. So, we're really creating scale and actual shipment of product and not wasted space.
Michael (03:47):
And are most brands focused on the edges or the first mile, last mile? Are they trying to reduce labor in that middle mile, help the folks understand-
Joseph (04:02):
Yeah, we touch on it across the board. So yeah, is it the last mile? Reducing the costs also with the consolidation piece of it that once we're reworked those product and inspected it, we're getting out some continuity with LTL and full truckloads back into their DC because now these products have been handled by a return expert. And so, we're reducing potentially the space needed to handle the returns and ultimately reducing probably operational costs on the back end for it because yeah, they're just scanning and basically sorting to a pallet ready for re-sellable items.
Michael (04:44):
Right. Right. And for those brands who are early in their consolidation journey, what's one piece of advice you'd give to that brand?
Joseph (04:55):
You probably don't have it all figured out because consolidation can impact your business across multiple groups within an organization. What we see is you have customer experience getting involved, supply chain and logistics, getting involved, ultimately yeah marketing and even finance. So, I think it don't think you have it all figured out, get enough people around the table to see where this can positively impact the business. And then yeah, don't wait because yeah, a penny saved, there is a penny earned.
Michael (05:33):
Yeah, it's interesting you called out the various functions. I would say within an organization, different functions are at different stages of their consolidation journey. And it's as much about bringing the rest of the org along. Supply chain is the tip of the spear, as it were.
Joseph (05:53):
Right. Right. I mean, operations all of a sudden you see being able to inspect an item within a certain amount of period, and then also understanding that fraud reduction is potentially impacted by it because we're getting the product in, we're verifying it. So, there's so many different things that we could potentially impact across the organization. Yeah, the more people around the table, the better decision that's going to take place.
Michael (06:20):
Right. Exactly right. Exactly right. Well, thank you, Joseph, for joining me and on Returns Academy and best of luck to those of you brands who are considering returns consolidation.
Joseph (06:35):
Mike, I appreciate the time and look forward to more.
Vijay Ramachandran - VP of GTM Enablement + Experience, Pitney Bowes
Vijay Ramachandran uses his 20-plus years of marketing expertise to develop creative go-to-market strategies for a company that’s been around for a century, Pitney Bowes. His ability to prospect in a way that cultivates strong relationships rather than burning bridges is key to his success as a marketing and growth professional.
Michael Haswell - VP of Partnerships, Narvar
Michael Haswell joined Narvar to improve its business development and corporate development functions. With more than 25 years experience working in tech, Michael’s resume features an array of specialties, including landscape analysis, product strategy, product development, go-to-market strategy, product incubation, and more.
Michael Haswell (00:12):
Hello everyone. Welcome to this installment of the Returns Academy. I am Michael Haswell, vice President of Global Partnerships at Narvar, and I am joined by my partner and colleague, Vijay Ramachandran. Did I, did I come close?
Vijay Ramachandran (00:29):
That was great. That was really good. Really impressed, man.
Michael (00:32):
Wonderful. Who's vice president of Go-to-market enablement experience at Pitney Bowes. And we're here to talk about reverse logistics generally and consolidation specifically. But before I jump into questions, Vijay, I'd love for you to provide a few words about yourself and your background.
Vijay (00:50):
Yeah, thanks Mike. Really appreciate it. Thanks for having me on. I've been kicking around the e-commerce logistics space for a couple of decades now. Started out in retail supply chain software and then have spent the last half decade or so at Pitney Bowes.
Vijay (01:09):
If you aren't already familiar with us, we're a e-commerce logistics carrier. We offer carrier services like fulfillment, delivery returns, and crosswater transportation. And I think what we'll talk about here, some of the unique things about us is that we tend to design our solutions around the needs of individual clients. And so we have a very consultative approach to our services. It's not one size fits all. And I think that leads well into this conversation around how do we adapt to the world of changing returns landscape, as it were.
Michael (01:43):
Indeed. And as you're engaging on this one-to-one basis, what sort of common threads, common trends or opportunities are you seeing in market as it relates to reverse logistics?
Vijay (01:54):
Let's take a zoom out for a second. If you look at the numbers from NRF average return rates in 2020 we're about 18%. 2021, it jumped two percentage points up to 21%. That's a not insignificant amount of incremental returns. The percentage increase implies that it's not just riding along with the rising tide of e-commerce volume in general, it's that consumers have gotten a lot more comfortable with shopping online and therefore they're getting a lot more comfortable with returning online. So this creation of new demand for return services is driving a higher returns rate.
Vijay (02:35):
So I would say what's happening is that as a result, retailers, e-commerce brands are stuck kind of between a rock and a hard place. On the one side, you've got a convenient returns process that's been established. You don't want to make it any less convenient than it is now to reduce return rates because you're going to turn off customers.
Vijay (02:55):
And that's the last thing you want to do. Given that e-commerce demand is starting to revert to the mean, you don't want to scare away in customers. So that's a hard backstop you have. You don't want to reduce any convenience to cut back return rates and be customer hostile.
Vijay (03:12):
At the other side you've got 21 per plus percent return rates means that your returns costs are increasing, not just because return rates are going up, but because labor's going up, transportation costs are going up, facility processing time, and real estate costs are going up. All of these constituent costs are driving up the cost of return. So you've got high return rates really as a child of convenience, the heyday of retail, online convenience, driving higher return rates, and then the higher cost on the other side. So if you're a retailer, what do you do? Where do you address these problems? Because you can't really scare away customers at the same time, you can't ignore the margin erosion that's happening as a result of returns.
Vijay (03:54):
And so those are, I would say, the macro trends. And if you're a retailer, I think you kind of boil that down into four categories of things that you can do. The first category is, can you very subtly, without the consumer noticing change the returns options available so that it disincentivizes certain types of returns? Is that possible? There are some marginal cases, and that's true.
Vijay (04:22):
Can you reduce the number of returns that are avoidable? And what I mean by avoidable is can you bring them back to the store instead, if you have a store network. Can you entice consumers to drive the return back to the store so you don't have to spend the money on transportation costs? Can you avoid fraud? Can you reduce the amount of fraud in the returns process? And then the other two buckets are, can you lower the cost of transportation? Can you lower the cost of processing returns, where the product goes at the end of the returns journey?
Vijay (04:52):
Those are sort of the four buckets I think retailers have available to them. We're going to, I think, focus mostly on the other two, transportation and processing costs. Because I think those are the sort of lowest hanging fruit for most merchants, reducing transportation and processing costs.
Michael (05:10):
It's interesting, probably from the same NRF report, we're seeing similar consumer trends. To your point about the increase in returns, volume returns grew at a factor of five of e-commerce growth during the pandemic.
Vijay (05:26):
The other thing that we focus on, to your point, do you want to disincentivize returns? Well, it's about five times more expensive to a customer than it is to retain a customer. And so to your point, returns is really table stakes. And I think the third piece, and I think this flows into our pivot toward returns consolidation, the consumer is much more focused on sustainability. They are starting to realize a label in a box can be expensive for the environment, not just the merchant or the brand. So along those lines, help me understand how Pitney is tackling returns consolidation.
Vijay (06:05):
Yeah, absolutely. So let's start with defining what returns consolidation is. So probably the most expensive way to deal with returns is to have each individual return package directly transported back to the origin or the return destination, whether that's your own fulfillment facility or your three PL, or a liquidator or whoever you might be directing returns to.
Vijay (06:31):
Having every parcel sent one by one back to the origin is an incredibly expensive enterprise. And so consolidation allows for, I would say there's sort of two instances or two categories of consolidation. There is consolidation at the edge where you're consolidating at let's say a carrier facility. And that's natural a UPS store, a FedEx office, so any of these sorts of carrier facilities. That's at a small scale consolidation, you're getting probably the returns from a single zip code or maybe a 15,20 mile radius. It's not a tremendous amount of consolidation.
Vijay (07:10):
And you can get some efficiencies there by maybe ameliorating fraud by driving consumers to a location that's going to in open box and inspect at the point of acceptance. So you get some nominal improvements. The real efficiency gains are when you take all of those edge locations and consolidate a second time. Because it's the transportation of long distances that is really driving a lot of that cost.
Vijay (07:39):
So to your point around the green returns, and how do you lower the carbon offset. This is also the case if you consolidate as much as possible from a region of the country into one central location, and that is one truck, one set of pallets that heads back to your facility. So you reduce the footprint across all of those long haul freight journeys. And so that middle mile consolidation, I would say is the largest opportunity for a lot of merchants because it's comparatively easy to collect, I don't know, maybe 50 returns at a carrier facility, but to do it at the tens of thousands of returns and put them on pallets, and fill up an entire 53 foot trailer, that's really where you get the cost savings and to maximize the amount of returns taking the same trip back at your origin facility.
Michael (08:31):
And so what sort of bottom line impact can a traditional omnichannel retailer or maybe even a direct to consumer brand enjoy by maximizing this impact in sort of the middle mile?
Vijay (08:47):
Yeah, I mean, what you're essentially doing is turning parcel rates, converting them into line haul rates, which are substantially cheaper once you've consolidated. And so you're also talking about less labor because you're not at the end point of that return. You're not having to piece through individual returns at a time. You could do it at the pallet level.
Vijay (09:07):
Just that amount of consolidation can result in as much as a 40% reduction in cost, 40%. That's tremendous just because of the transportation cost being so significant. When you ask retailers what they're doing, what are the top returns initiatives they have on their priority list this year, we've gone and done this survey, this research ourselves, 70% of retailers more than any other returns initiative are focused on reducing transportation costs, 70%. That is the most prevalent target for returns optimization today among retailers. And so this is how you do it.
Vijay (09:44):
You consolidate as much as possible, as early as possible on the journey of the parcel. You get it all in one truck as much as possible. But on top of that, Mike, I think there's an opportunity to do some smart things while you're consolidating because you can also sort and consolidate. You can't really sort to any great degree at the edge, at a carrier location in a residential area, for example, this is not enough returns, not packages there. But at a middle mile facility, you're getting tens of thousands of returns at a time. You can sort them into pallets based on the type of item being returned. And so then what that allows you to do is to, one, you can expedite the returns of your higher value goods, so you can recoup margin by reselling those earlier faster. So you're reducing markdown costs. The other opportunity is you could have different routing logic based on the type of item being returned.
Vijay (10:40):
And so if there are certain low value goods that are coming back, you can drive those straight to a liquidator instead of having to make the journey all the way back. Because you have the ability to consolidate. You're reducing the transportation spend, which you're also consolidating into sorted groups, piles and packages way before it hits your dock. And so you're not also spending labor on doing the sortation once the returns arrive back at your facility. And so you count all of that up just with the transportation savings is 40%. I would say that there's an opportunity for even greater than 40% if you include some of these other optimizations I just mentioned.
Michael (11:16):
Yeah, we're seeing similar requests for sorting more upstream to make those disposition decisions. Well listen, thanks so much for your time here, Vijay. Well, maybe one last question. Narvar and Pitney have a longstanding relationship, but I feel even we've just scratched the surface of Pitney's capabilities. Give a couple examples of how you're helping brands today and what's sort of your special sauce?
Vijay (11:46):
Yeah, yeah. I mentioned at the top, and this kind of goes to the strength of the partnership between Narvar and Pitney Bowes, but we have a lot of common customers. We specialize in these highly sophisticated retail e-commerce environments. And so in those environments, you find that most of these companies, enterprise type companies have unique needs. They have unique supply chains, unique networks. They have different types of store networks. They have different types of parcel profiles, and so they require different types of solutions. It's not one size fits all.
Vijay (12:21):
So where we specialize is kind of custom building or configuring, I would say is better word. Configuring solutions for our clients based on the business needs that they have. So I'll give you a couple of examples specific to returns consolidation. So the first is, I'm not going to name names here, but I'm going to call out some really great customers that we have.
Vijay (12:46):
One of the big mobile wireless carriers, one of our customers uses us for returns of cell phones when everybody goes through the upgrade cycle about once a year, usually in the fall or so when the new phones come out, everybody starts to trade-in their old phones. So those trade-ins come in through our network. Because we're consolidating those, we can isolate the iPhones and the Samsung Galaxy, which have the highest resale value. We can isolate those when it comes back through consolidation, sort those on separate pallets, and we expedite those shipments back so that they can be refurbished and resell as quickly as possible. Whereas the low value phones that come back, the ones that came free with contract, for example, those we may end up recycling to and avoid the freight going all the way back, avoid the carbon output going all the way back to the facility.
Vijay (13:39):
We'll go and recycle those locally wherever possible, or send them to a recycling center or send them to a donation center. Those sorts of opportunities exist because you're consolidating. So that's one example.
Vijay (13:49):
I've got another example. We've got an international footwear brand that only has a network in the west coast of the US. They sell globally, online and through their wholesale channels. And the challenge that they have is that all their logistics infrastructure, their network is entirely on the west coast of the US. And so returns from their east coast customers, one, takes a long time because it's coming in across the country and just have to wait. Their policy has been to wait to open the box and inspect and issue the refund. And so they're having issues with long timelines to issue refunds back to customers. The second thing is, it's just expensive to traverse the entire country with parcels going back to your California facility all the way from New York and here in Atlanta and all those places.
Vijay (14:36):
So what we're doing is we're managing the east coast returns, and we consolidate in specific regions of the east coast, and we pull those together in a single set of pallets and shipments, line hauled back to the west coast. Instead, it reduces cost.
Vijay (14:52):
But the other thing we're able to do is because we're processing those returns on the east coast, we can check to see if the weight of the package matches the expected weight of the return based on the items weight. And it's a first check weight verification that allows us to sniff out if there's a chance of fraud and flag a package that says, "This is beyond a tolerance of weight difference from the item. We shouldn't issue the refund as quickly." Everything else, if the weight matches, you could issue a faster refund on carrier acceptance and processing. And so it allows them to speed up the refund process, but it also reduces the cost for those transcontinental returns wages.
Vijay (15:33):
Third example I'll give you is we have a lot of international clients. International brands, fashion brands that are from Europe and Asia that sell into the US. They've got to accept returns just like any other retailer. The challenge is they need to ship those returns back overseas.
Vijay (15:49):
Well, there is no economical way to ship a single item back overseas and even expect to recoup any kind of margin because at that point you've spent the entire value of the product in shipping costs. And so what we do is we do the consolidation at the facility that we have closest to the airport, where the items get shipped back. And so we consolidate down to pallets. And you can get a much better rate on a per pallet basis going back overseas than on a per piece or per parcel basis.
Vijay (16:23):
And so consolidation before going overseas for returns helps with not just with cost and efficiency, but also with documentation duty drawbacks. All of that at the point of consolidation is much more simplified with returns for international clients.
Vijay (16:37):
So those are, I would say, three examples. They're very different solutions, but they all leverage some of the common building blocks. But we've configured them in unique ways for each of those clients.
Michael (16:47):
Yeah, indeed, one size does not fit all. And I know you could spend the next hour running through-
Vijay (16:53):
Sure could.
Michael (16:54):
... the complex examples and all the more reason for brands and retailers to rely on experts like Pitney Bowes. So thank you, Vijay for your time today. And thanks to those of you who joined this installment of the Narvar Returns Academy. Have a good afternoon.
Meet Anna Ciesinski—an experienced customer success leader at Narvar with a track record of delivering strong results despite working in a demanding, fast-paced environment. Anna is especially adept at helping retailers navigate from running turbulent returns processes, to running return operations that are smooth and efficient.
Anna Ciesinski (00:09):
Hi, I'm Anna and I'm a team lead on the Customer Success Team here at Narvar. I'm here to shed light on the question: how can the returns experience help retailers ride out the turbulence with the economy on shaky legs?
Anna (00:22):
Here at Narvar, we know that a seamless returns experience fosters loyalty. As a consumer myself, I check the returns policy and, often, the return method before placing my order.
And assuming all goes well with getting my refund or completing my return, I'm more inclined to shop with a retailer again.
Anna (00:39):
Within the Narvar platform, we offer the ability to power self-service exchanges. With size bracketing on the rise and consumers shifting to e-commerce as the preferred shopping method, sizing and color swapping is more and more common, or even exchanging for an entirely different product.
Anna (00:56)
Historically, customers only had the option to do this in store, or they would have to wait for a refund before repurchasing, which runs the risk of the desired item going out of stock or not remaining in inventory at the store where they made their initial purchase.
Anna (01:11)
Customers can now seamlessly enter the returns portal, express desire to make an exchange, and Narvar will display the other color or sizing options that are currently in stock.
This makes life easier for the customer, and it's a win for the retailer who’s able to save the sale, retain revenue and keep the customer engaged with their brand.
Anna (01:30)
Narvar’s Shopify customers can offer even as well as uneven exchanges, where shoppers pay the difference (or are refunded the difference) between the originally purchased item and the new item. This keeps the customer engaged and reduces the risk of them churning to a competitor in search of a similar item.
Anna (01:37)
For retailers who don’t offer exchanges in this way, they can use Narvar to issue refund to a gift card…this allows retailers to retain revenue while giving the customer the sense that they’ve gotten their money back. (Anecdotally, the popularity of instant-refunds-to-gift-cards is exceptionally high.)
For more than four years, Genevieve Easterling has been helping retailers create better buying experiences through her work at Narvar. She specializes in supporting the world’s most innovative brands thrive in an ever-changing consumer landscape.
Genevieve Easterling (00:09):
Hey, I'm Genevieve Easterling. I'm the Director of Customer Success at Narvar. In my role, nothing is more important than revenue retention. The question I'm here to help with today is, what does it take to transform a customer that's looking for a refund into a customer that's looking for an exchange?
Genevieve (00:26)
The first thing here is information. You can't run a good retention program if you don't understand why your customers are returning in the first place. If you're not already tracking your top returned items, top returned methods, reasons that product is coming back, the time it takes for a product to come back, or the cost of returns—you've got to start this NOW.
Genevieve (00:44)
[Collecting] this information, ultimately, allows you to create a program that's going to be sustainable and examine everything from product sizing, to product descriptions, to inventory purchasing decisions so you can reduce your return rate over time.
These details will also provide you with insights into where it's possible to transform a return/refund into an exchange.
Genevieve (01:13)
Aside from collecting information from returns, you need to ensure your return flow caters to what consumers want in the way of options…the motivation for submitting a return (and your expectations for compensation) are going to be totally different if the item showed up torn; if the color wasn’t as expected; if the cut of the fabric wasn’t flattering in person.
You can't treat all of your customers the same when it comes to returns. If a return is happening because an item is damaged, consider issuing a replacement item automatically or, at a bare minimum, provide the customer with the option of getting a replacement instead of refund so that they can make their own decision.
Genevieve (01:56)
“Sizing”, not surprisingly, is the number one reason for return at most retailers, but a ton of retailers still haven't invested in exchange capabilities that allow customers to easily view what's in stock, make the switch, and be on their way to loyalty.
If the fit wasn't flattering, if the item wasn't as expected, if the consumer just changed their mind, instead of taking a chance with a refund and hoping they’ll return to shop, provide them with visibility into similar products or best sellers that you know have a low return rate—that way the shopper is more likely to remain loyal to you.
Genevieve (02:38)
The last thing you need to keep in mind is that it's not over till it's over—maybe your efforts to gracefully guide the consumer didn't work, or maybe the customer hasn't seen anything that sparks their interest—that’s okay! It’s not too late to intervene.
Genevieve (02:54)
One thing that we see a lot of retailers doing is using gift cards for returns instead of refunding dollars to the original form of payment—they are a great way to retain revenue and ensure loyalty.
Savvy retailers incentivize customers to accept a gift card rather than seeking a refund to their original form of payment. They do this by offering free returns. If the customer chooses a gift card for their refund instead of the original form of payment, retailers will waive the return fee. Or they’ll give the shopper a 10% discount on their next purchase.
Genevieve (03:32)
Even if they've gone past that point—they still want to do a refund to their original form of payment and they’ve clicked “submit”—you can engage them with a winback campaign during the return and refund communication flow:
You can use these messages as opportunities to recapture the shoppers attention and get them to start spending with you again.
Genevieve (04:01)
At Narvar, we’re seeing a lot of retailers use offers such as “free shipping on your next purchase” or “20% off your next order” to facilitate a lot of positive results from their winback campaigns.
Making these gestures in the return flow is more than an opportunity to set up the next sale and recapture some revenue—it’s a way to earn trust, cement loyalty, and grow lifetime value.
You're proving to shoppers that you’re the best retailer for them, even when things “aren’t right” with an order.
Genevieve (04:33)
These are my tips on helping to retain that revenue, helping to create options for exchanges as opposed to a straight refund. Hope this has been helpful. Know your business, provide options for your customers, and never give up. Thanks so much.
Claire Johnson is one of Narvar’s most-trusted and well-respected product marketing experts. In addition to being well-versed in all things post-purchase, Claire’s uncanny ability to transform vulnerabilities (e.g., returns) into opportunities (e.g., even higher sales) for retailers is unrivaled amongst her peers.
Claire Johnson (00:09):
Hi everyone. My name is Claire Johnson and I am a Product Marketing Manager here at Narvar. Today we’re going to examine the question: why are returns an opportunity for retailers?
We're going to break our answer down into three specific segments so you get some clear, high-level takeaways that you can use to transform product returns into an opportunity center for your business.
When we’re done, you’ll be better positioned to retain existing revenue, attract new revenue, and really optimize your profitability.
Claire (00:52)
As retailers, we know not everything works out—people are going to want to return purchases and send products back.
So, the question is, what can you do to retain revenue when those moments arise?
The first, and most obvious, thing to do when it comes to making returns an opportunity center for your business is offer exchanges.
Whether it's an even exchange or an uneven exchange, make the experience seamless and convenient for the customer to get the right size, color, etc. that they want. Doing so not only allows you to retain revenue, but if the experience is a breeze, it gives customers the confidence they need to shop with you again and again.
Claire (01:20)
Another thing you should do—and this is low hanging fruit for you to capitalize on—is invest in gift cards.
Gift cards are a great way for you to retain revenue while putting money back in the customer's pocket and, most importantly, gift cards incentivize shoppers to get back to spending ASAP.
Claire (01:37)
Of course, not everyone is going to want to take a gift card, so you may need to incentivize them to choose that as their refund method (versus issuing a refund to their original payment method).
Many retailers who work with Narvar achieve this incentivization by waiving return shipping or restocking fees for customers who choose a gift card refund.
Claire (02:02)
Another thing to consider when trying to transform returns from a cost center into a profit center is your communication during the returns journey.
Customers might be calling your customer support center with WISMR inquiries that take time and money to respond to. By automating your return-flow communications and letting customers know the status of their return every step of the way—that it's been submitted; that it’s been delivered to the warehouse; that it’s been accepted; that the return is on it’s way—you can reduce your operating costs and improve the profitability of your business.
Claire (02:34)
That being said, most retailers have a huge opportunity when it comes to optimizing their reverse logistics—especially through consolidation.
At Narvar, we’re seeing countless retailers save time, reduce waste, and save money by consolidating small, individual return shipments into larger bulk returns shipments to their warehouse or distribution centers.
Claire (03:20)
We’re also seeing retailers invest heavily in intelligent dispositioning—making sure that a return goes back to the right place at the right time for the right cost.
For example, if you're selling black boots and you know that black boots have a higher propensity to sell in the tri-state New York area, when a return of that product type and category comes in, intelligent dispositioning allows you to route those boots to the nearest distribution center in the tri-state area. This allows you to get the product restocked and resold in as little time as possible, boosting your bottom line.
Claire (04:02)
The same goes for product categories that might not be in high demand (or are in higher demand) in one region versus another. How do you get those product categories to the right region with as much efficiency as possible?
Claire (04:21)
Product development teams find a lot of nuggets in customer return reasons—in understanding the why behind a return.
Madewell, for example, does a really great job of not just saying, was this too big or too small?—They say things like, was it too wide, was it too long, was it too tight, was it too short, to really get more granular information to inform product development in the future.
Claire (04:50)
Or maybe the product isn't advertised correctly—Bed Bath and Beyond, for example, was getting a lot of returns for a particular window curtain. Almost all of the return reasons stated that the curtain “wasn’t as pictured.”
BBY’s product development team acted on those return reasons and discovered that the product photograph provided on the product detail page made the curtain appear dark gray in color, instead of its true, dark purple color. They used that insight to update their product photography and the return rate plummeted for that item.
Claire (05:19)
Also, don’t forget about enforcing eligibility.
Gone are the days of retailers needing to receive returns of “final sale” items or items that are outside their return window.
Retailers can now create tight windows so they avoid getting old, out-of-season products from customers that can’t be resold easily.
Claire (05:42)
Finally, research shows that returns are an opportunity for you to deepen relationships with your current customers so you can retain them going forward—a positive returns experience leads to an increase in customer lifetime value.
Obviously, if a customer is returning an item something went wrong with their shopping experience, BUT if you provide them with a frictionless returns experience it can offset any dissatisfaction with the product. In other words, a seamless return experience makes a shopper more inclined to come back and make another purchase with you in the future (even though they’re making a return right now) because they know how easy the return experience is.
Claire (06:12)
To bring all of these tips to life, make sure you’re utilizing a return platform that offers flexible returns rules so that you can start to segment your customers and deliver bespoke returns experiences based on factors such as loyalty and transaction volume.
In other words, give your VIPs the red-carpet treatment by waiving return fees, offering elongated return windows, and more. These are the perks that really deepen that customer-retailer relationship throughout the return journey.
Similarly, if you know a particular shopper is a chronic returner or wardrober, you can enable strict, custom return rules that make it difficult for them to obtain any kind of refund.
Claire (07:08)
By the way, wow can you make it really easy for someone to submit a return?—Work with a returns platform that provides different drop-off methods.
At Narvar, we provide over 200,000 drop-off locations where a customer can consolidate the errands they're running. If they're picking up their medication at a pharmacy like Walgreens, they can just drop off their return right there.
We also offer home pickup for returns, an even easier option for shoppers who demand convenience—they can literally just schedule someone to come to their house and facilitate the rest of that return for them.
Claire (07:43)
I’ll leave you with this...printerless and labeless returns are such an easy way to reduce friction and make things really seamless for your customers.
Take the label out of the box and give shoppers a QR code instead.
That way, if your customer doesn’t have a printer, they can just take the QR code to the carrier that you are working with and get their return submitted effortlessly.
Tom Reiss - Chief Revenue Officer, Rise.ai
Tom Reiss is a tech lover with a strong understanding of commercial and financials. Fueled by an entrepreneur’s spirit and a wealth of curiosity, Tom strives to improve and optimize everything he touches at Rise.ai. His passion for people management and relationship building is fundamental to his success as an executive leader.
Richard Terry-Lloyd - Chief Revenue Officer, Narvar
Richard Terry-Lloyd brings more than 25 years of sales experience to Narvar (including previous stops at AppZen, Zuora and Salesforce), and is recognized as a GTM leader with a passion for rapidly building and growing SaaS tech businesses. As the Chief Revenue Officer, Richard is responsible for scaling Narvar’s growing revenue streams across product lines, customer segments, and industry verticals.
Richard Terry-Lloyd (00:13):
Well, good morning, good evening, good day. Welcome to the Returns Academy. I'm joined today by Tom Reiss from Rise.ai…a huge Narvar sponsor and a great partner.
Richard (00:33):
I'm Richard Terry-Lloyd, Chief Revenue Officer here at Narvar—I’ve been in the role for about 12 months, but I was an advisor for seven years. Tom, off to you…I’d love to hear a little bit about your story.
Tom Reiss (00:54):
Hey, Richard, thank you for having me here in this episode. A little bit of background about myself, I'm the Chief Revenue Officer at Rise.ai, and I'm responsible for revenue—from sales all the way to enterprise accounts, partnership, and many more.
Tom (01:10):
A little bit about Rise for those of you folks who are not familiar with our platform—we provide store credit infrastructure platforms that accommodate different activities, from store credit refunds to customer compensation, to gift cards, loyalty activities, and more.
Our goal, as a business, is to streamline all those “return currencies” into one digital world that simplifies redemption for customers upon checkout.
Richard (01:40):
That's awesome, Tom… I think so much of what is out there today is how you deal with returns…[they’re] unavoidable in e-commerce today.
That’s why a lot of retailers are starting to think about returns and how to use returns to protect and grow revenue for their businesses…rather than just being another expense.
I’d love to get your perspective, Tom, on returns and how Rise helps retailers manage the returns experience.
Tom Reiss (02:43):
Absolutely. I think returns—and refunds more specifically—are a wonderful example of how brands can turn lemons into lemonade. It’s a way for brands to transform a revenue-harming hassle into a lucrative opportunity.
A streamlined return process prevents revenue loss and can even increase revenue generation by facilitating opportunities to continue engaging (i.e., selling to) customers.
Tom (03:18):
A lot has been said about re-engagement with customers, but not enough has been said about returns and refunds—that angle can be far more sophisticated with the average brand.
Rise is doing a wonderful job on that angle because what we're giving to our customers is first and foremost a streamlined and automated process to cope with returns.
Tom (03:44):
Many brands have a manual process in place when dealing with returns and refunds. But our integration gives them the ability to automate that process and, in doing so, enjoy a lot of cost savings.
Tom (03:58):
With Rise, brands can also aggregate refunds of store credit. By aggregating the store credit, customers can use it later on inside the store. For the retailer, refund aggregation in the form of store credit delivers revenue loss prevention which is critical.
If a brand wants to increase their sales, if a brand wants to grow quickly, they want to make sure that the revenue loss aspect is taken care of. Because if you are not going to close a leaking bucket, your brand is not going to be able to grow quickly.
Richard (04:39):
One of things I heard you say today is how much more a brand is able to sell when they issue store credit in lieu of a refund...How it opens up upsell opportunities for a lot of retailers. I would love to hear some of the strategies that you've been working on with brands as it relates to upselling, and the impact they’ve had.
Tom (05:14):
Absolutely…The very unique selling proposition when it comes to store credit is that the philosophy and psychology behind it resonates quite nicely with the customers, which leads to upsells. What we see with brands is an upsell of 47% on average when customers who receive store credit come back to redeem it during a second or third purchase…this helps brands grow quicker and stronger.
Richard (06:11):
You guys work with amazing brands like Kroger, Nestle, Allbirds…When those companies work with you, how do they manage that post-purchase experience by leveraging your cards or credits?
What do you see?
Tom (06:53):
Post-purchase is an area that’s more than returns and refunds; it's also incentivization to get the customer to re-engage with you and buy more from the brand.
One of my favorite examples is tied to Good American—they’re doing a wonderful job.
What Good American is doing is they're providing delayed store credit to their customers. So, when you go to their store, you buy something from their collections…After several days (the delay) you get a “thank you” in the form of a store credit with an aggressive expiration timeframe.
The end result is they're able to keep their repeat purchase rate quite high, and they're doubling down on customer reengagement. Because they show their customer a surprise—an appreciation in the form of a store credit—that translates into customers repurchasing again and again and again.
Tom (07:52):
Another example, just giving more color to your question, is Milk Bar…One of the things that they're doing is they're promoting specific collections.
If you go to their website and you buy a birthday cake, after purchasing this birthday cake, you'll get a store credit with a value of your birthday cake for a particular collection of cakes…you can give that credit to someone you love or buy another cake for yourself.
It's something that helps increase customer retention, increase revenue, and re-engaging with your audience again and again.
Richard (08:33):
Driving that timeline is so important to these brands in terms of "how do they drive revenue?" So I love that strategy of just setting a time limit to these offers that forces shoppers to take action one way or another…that’s a great tip for any retailer out there.
Richard (08:57):
When you're looking at peak and any sort of advice that you would give to our listeners, in your mind, what is one of the single biggest missed opportunities for revenue retention in retail?
Especially as it comes to returns during peak…What's going through your mind? How does Rise look at that and the opportunity?
Tom (09:26):
Absolutely…the first missed opportunity right now in the market is around segmentation. You want to be able to segment your audience so you can be as personal in your engagement (messaging, action triggers, etc.) as possible.
The more personal you can be with what you're offering to your customer, the more effective you can be in increasing engagement and conversion. So, this is the first area where I think brands should spend more time and invest more resources.
Tom (09:56):
I think the second missed opportunity is around streamlining activity—you don't want fragmentation in your returns experience. You want all activities aggregated in one place. You want to be able to bring all your refunds from returns into one wallet. You want to be able to bring all your referrals, credits, rewards into one digital wallet. If you can do that, what you get is very streamlined, focused messaging. The ability to communicate with your audience gets easier which delivers a positive impact to the bottom line.
Richard (10:43):
Personalization is so important, and being able to curate all of those different touchpoints is so important for the brand and, obviously, for the consumer. Personalization in interaction is what builds loyalty and trust, which leads to more revenue.
Richard (11:06):
From your perspective, how can improving that post-purchase experience benefit retailers looking to retain revenue and protect their profits?
Tom (11:23):
As every business knows, fundamentals win. When we're talking fundamentals, we're talking about cash flow—you want to make sure cash flow is strong. You want to make sure that you're doubling down on your current opportunities, which means doubling down on customer retention to maximize revenue retention. You want to make sure that your existing customers continue to go through your pipe, your checkout, and buying more on an increasing basis.
Tom (11:57):
The way to do this is by looking at all your activities—refunds, post-purchase engagement, all of it—and tailoring those activities to benefit your business. It's important to understand that while all businesses have the same needs, no two businesses are the same—you can’t buy something off the shelf, implement it in your store, and expect the results to be superb. You need to work, you need to customize, you need to think hard on how you tweak and change that solution to suit your unique needs and the way you work, not the other way around.
Richard (12:55):
How do you think about post-purchase from a global perspective, from the way returns and refunds are managed, to the way different promotions are managed?...How is Rise.ai looking at the global retail environment?
Tom (13:57):
Giving shoppers the ability to customize—to tweak and change their individual post-purchase is critical—from a global perspective.
At Rise, we provide retailers with the flexible infrastructure they need to achieve this—we give people a playground where they can make the changes that they need, because brands in North America, people in Europe, brands in Australia, brands in Israel…all of them are different. The post-purchase experience needs to accommodate different cases and different processes.
Tom (14:38):
If we're going more specific to revenue retention around returns and refunds, multi-currency is probably one of the angles that we see outside of North America. Brands want to be able to sell, serve, and cater to clients all around the globe…after all, ecommerce is really about selling without borders. Being able to facilitate the multi-currency aspect is key to facilitating revenue retention and customer retention moving forward for brands who want to scale up.
Richard (15:16):
That is great input, really appreciated. The customization, thinking about all the different currencies, all the different challenges that you guys manage across the globe, and all the different financial institutions, it's really incredible what you've been able to put together.
Richard (15:32):
Really appreciate being able to spend a couple of minutes with you. I really appreciate the partnership and the ability to work together. Just wanted to say thank you. Thank you for being a part of this day and for the Returns Academy.
Tom (15:50):
Thank you, Richard, for having me here.
Claire Johnson is one of Narvar’s most-trusted and well-respected product marketing experts. In addition to being well-versed in all things post-purchase, Claire’s uncanny ability to transform vulnerabilities (e.g., returns) into opportunities (e.g., even higher sales) for retailers is unrivaled amongst her peers.
Claire Johnson (00:10):
Hi everyone, my name is Claire Johnson and I am a product marketing manager here at Narvar. Today we're going to be breaking down this one specific question: what are the factors that lead to a, "Where's my refund?" inquiry, abbreviated to WISMR, W-I-S-M-R.
Claire (00:32)
We’ll dive into four different factors that make WISMR such a huge issue for the retailers that we work with, and we’ll give you tips on how you can address these factors in a low-effort, high-value way.
Claire (01:04)
Season after season, year after year, WISMO and WISMR are top drivers of inquiries to retailer call centers, and these inquiries cost money. One of the main reasons customers will inquire about WISMR is due to a lack of communication from the retailer.
Step one to fixing this issue lies in better communicating your return and refund policy before a shopper ever makes a purchase—literally calling how long it takes to:
As well as what’s required to complete the returns process.
A great way to go about communicating like this is on a product detail page or an FAQ page.
Claire (01:50)
The next step is to continue communicating with shoppers beyond your website. So, once someone makes a purchase, use the delivery journey as an opportunity to start communicating about returns.
Use order tracking emails to remind people what’s required if they want to submit a return, how they can initiate a return, how long the return process takes to complete, and where they can go to get the most up-to-date status on their refund.
Levi's does a really great job of setting these upfront expectations in their delivery journey.
Claire (02:34)
A third factor when it comes to why "Where is my refund?" inquiries are happening to you might be a lack of communication during the actual return process itself.
When a customer submits a return online, the onus is on you to give them lots of information upfront, the moment they log into your returns portal.
Many of the retailers we work with at Narvar are exceptional at this—they let shoppers know average return and average refund timelines.
Then, they’re reiterating that information throughout the return journey so the customer never feels forced to call customer service or check their credit card statement to know whether their refund was issued or not.
Claire (03:37)
At Narvar, we work with retailers when it comes to return journey communication so they can keep customers in lockstep with the status of their return.
Letting the customer know their return is…
Claire (04:12)
Finally, we’re seeing more and more retailers issue instant refunds…and if you aren’t one of those retailers, it could be why you’re seeing a higher volume of WISMR inquiries.
Therefore, instant refunds are something we encourage our retail partners to participate in. Some of the brands we work with at Narvar such as Lululemon and American Eagle are utilizing this today as a part of their return optimization strategy and their retention strategy. They take the RMA data and use it to trigger refunds instantly the moment that a return ships from the customer back to the warehouse.
Claire (05:11)
Instant refunds are especially important for VIP customers and those with orders under a specific monetary threshold (e.g., $20).
Meet Anna Ciesinski—an experienced customer success leader at Narvar with a track record of delivering strong results despite working in a demanding, fast-paced environment. Anna is especially adept at helping retailers navigate from running turbulent returns processes, to running return operations that are smooth and efficient.
Anna Ciesinski (00:09):
Hi, I'm Anna—I'm a team lead on the customer success team here at Narvar, and today I’m going to answer the question: how do you eliminate WISMR [Where Is My Refund?] from your business?
Anna (00:19)
Narvar partners some of the largest retailers globally, and one of our leading KPIs is call volume to customer support—the lower the call volume, the lower the operating costs for our retail partners and the better the customer experience for their shoppers. Given that WISMR inquiries are a significant driver of call volume, we recommend tackling this problem in a number of ways.
Anna (00:32)
The first thing you should do is offer a self-service and branded returns experience. Give the customer the power to submit their own return online; give them the freedom to track their own return status at their leisure and benefit from notifications that let them know when a return is received, accepted, or a refund is issued.
Anna (00:51)
Return tracking in particular eliminates a lot of the “Where is my refund?” inquiries since retailers are keeping their customers in the know of exactly where their return or refund is. For retailers, return tracking makes it easy to see when the customer initiates the return, when they ship the return, and when it arrives back at the warehouse.
Anna (01:16)
This reporting helps to power very popular programs, like “refund at first scan” or “refund at point of delivery.” These programs reduce the time that it takes distribution centers to scan packages into their system and complete the full QA process prior to issuing a refund.
Faster refunds shortens the time customers spend in limbo and, naturally, shortens the window of opportunity for making a WISMR inquiry.
Anna (01:45)
Adding clarity and publicity to your return and refund timelines will also reduce WISMR call volume. There are several places retailers can do this including on their:
Setting the right expectations is critical, and it helps customers reduce the number of calls into your call center.
Anna (02:08)
Other popular programs at Narvar that help tackle WISMR are “instant refund back to a gift card”, or a “keep-the-item” flow, which allows customers to receive their refund without any shipping needed.
Anna (02:20)
Instant refund back to a gift card allows the retailer to retain the revenue and encourages customers to use those funds to purchase other items.
This reduces the need to ask where the refund is since customers can get that emailed gift card shortly after they've dropped off their item. It's a win-win for both the customer and the retailer.
Anna (02:40)
Keep-the-item is leveraged most often for low-cost goods and VIP-customers who meet minimum spend thresholds. Sometimes it's expensive from a shipping perspective to ask the customer to send back their items and it's easier for them to dispose of them on their own. They're able to do this while in parallel the retailers issuing their refund. Offering this to customers a few times a year to avoid any abuse of the program is definitely recommended.
Anna (03:05)
To recap, Narvar tackles WISMR head on through the visibility to both the customer and the retailer and by powering several different refund methods, like I mentioned, refund at first scan, maybe back to a gift card, or maybe allowing the customer just to keep the item altogether.
As the Head of Retail Strategy at Narvar, David Morin is a skilled relationship builder, adept at navigating and managing diverse personalities in the retail and technology spaces. He works with cross-functional teams to define business strategies and be the voice of the customer in Narvar’s product road-map.
David Morin (00:12):
Hi, I'm David Morin, Head of Customer and Retail Strategy at Narvar, and in this session we'll talk about how to eliminate WISMR, or “Where is My Refund?” from your customer's vocabulary.
For most retailers we work with, the number one reason for consumers contacting the call center is WISMO, or “Where is My Order?”, related to the order and tracking status of an outbound shipment.
In what is almost always a close second is WISMR calls, or “Where is My Refund?”, related to consumers asking about the status of their refund after sending back a return.
Here are three great strategies to deploy in order to reduce WISMR call and ultimately drive customer satisfaction.
David (00:57)
First, if you are not already using Narvar to facilitate your digital returns experience, it's time to consider adding Narvar returns to your post-purchase experience.
While providing a prepaid shipping label in the outbound box may be seen as a consumer convenience, it actually causes even more friction in the returns tracking and refund experience.
One of the biggest benefits retailers see from using Narvar's digital return solution is:
David (01:45)
Next, what we know is that consumers are hungrier than ever for proactive and transparent communication about their orders and returns.
The best-in-class brands that we work with keep customers engaged and informed at every step of the outbound shipping journey and at every step of the returns and refund journey as well.
Today, Narvar offers a number of returns related communication triggers, including notifying the customer when the carrier is in possession of the return shipment and indicating it's on its way back to the retailer, and also when the refund or shipment has been received at the retailer's DC.
David (02:24)
All of Narvar's communication triggers are a hundred percent customizable, and we always recommend putting explicit content in the email or other communication channel communication to let your consumers know what to expect next, and especially advising on when the consumer can expect to receive their refund.
Narvar's platform also allows for ease of updates and our best in class retailers frequently update their email templates with new information as the reverse logistics networks change.
For example, we see many retailers update their copy indicating longer refund times during peak capacity periods. We have seen phenomenal results from brands that add-on returns communication, and often see upwards of 30, 40, or even 50% plus reductions in WISMR calls by being more transparent and proactive throughout the returns and refund process.
David (03:19)
Finally, one of the best ways to avoid a WISMR call altogether is to process a refund earlier on in the returns journey. We have seen more retailers than ever start to offer advanced refunds, either issuing a refund as soon as the customer drops the return in the mail stream, or even in some cases offering an instant refund at the time of return initiation to get money back into your customer's wallet faster.
We have worked closely and strategically with a number of retailers to align on when this refunding timing is applied, whether it's applied to a hundred percent of consumers or only offered to a subset of consumers such as your VIP customers, or items under a certain price threshold or different categories of items in an effort to reduce the risk of fraud of the returns process.
David (04:08)
One of the added benefits of offering an advanced refund program is opening up more room to think about consolidation or other reverse logistics strategies to reduce shipping and operational costs. If your consumers no longer have to wait for a refund, you have a lot more room and options to optimize your shipping network by taking one aspect of shipping speed out of the equation altogether.
Not addressing WISMR volume through these strategies can increase customer service costs and lead to a potential loyal customer avoiding purchasing with your brand. Again, so reduce the risk of customer return and dissatisfaction by adding visibility and transparency, and surprise and delighting your customers with your refund timing.
There are two fundamental reasons that home pickup is such an important part of the return experience. The first is that it maximizes customer convenience which, as you know, is critical in today’s ecommerce environment. The second reason home pickup is such an important part of the return experience is that it’s a cultural expectation within certain regions, particularly Asia and Europe. In this video, featuring Narvar's Tim Moots (Principal Product Manager) you'll learn how you can use home pickup to differentiate your brand, appeal to higher-end shoppers, and capture more revenue long term.
There are two fundamental reasons that home pickup is such an important part of the return experience.
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The first is that it maximizes customer convenience which, as you know, is critical in today’s ecommerce environment.
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The second reason home pickup is such an important part of the return experience is that it’s a cultural expectation within certain regions, particularly Asia and Europe.
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Here in North America, we’re used to the Ubers and DoorDashes of the world…door-to-door couriers who provide great delivery experiences, but are only just beginning to promote return options.
Therefore, online shoppers don’t expect retailers to provide home pickup, so it immediately differentiates your brand.
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We’re talking an average order value of $250 among those who use home pickup in Canada and the United States.
These are the type of customers who not only want to see white-glove service offerings, but are also willing to pay a premium for them if asked to do so.
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You need to provide scheduling.
You need to provide courier tracking.
You need to enable two-way communication between courier and customer.
And, perhaps most importantly, you need to give shoppers the option to do a direct hand-off or a contactless pickup.
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If you’re going to do it, you need to do it well.
Remember that a return is a distress situation for shoppers.
When your customer initiates a return there’s a great chance they’re already frustrated or disappointed—you don’t need to add to that frustration or disappointment by offering a lousy home pickup experience.
If your customer can’t schedule their home pickup…
If your customer can’t get in contact with the courier…
If your customer can’t reschedule their home pickup with ease…
Then any anger or frustration they’re experiencing due to the product they purchased is going to be amplified tenfold.
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Flexibility in scheduling and transparency in courier communication are critical elements to get right if you’re going to offer home pickup.
Especially when you consider that retail giants such as Amazon and Walmart are continuing to invest in the development and expansion of their own logistics and fulfillment networks.
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As an aggregator, Narvar gives ecommerce retailers like you a one-stop-shop when it comes to home pickup.
Not only can we work with multiple carriers, but we can help you figure out which carrier to partner with based on our years of experience.
If you want to learn more about how home pickup might work for your business, reach out to us.
