Despite the summer heat, you had better start strategizing your Black Friday and Cyber Monday campaigns now if you’re in ecommerce.
In our post-pandemic world, it’s much harder for brands to grow and stay competitive in the endless sea of ecommerce, as virtually every brand has had to pivot to (and/or ramp up) their ecommerce channels to maintain business continuity.
To make matters even more complicated, Apple implemented new privacy restrictions for digital marketers on iOS devices. That means if your organization places a large stock in mobile advertising, you had best be prepared for a serious reduction in ROI. Apple’s changes are driving up customer acquisition costs (CAC) on all social media platforms–especially on Facebook, Instagram and Snapchat.
But by how much? Your current $30 customer from 2021 could cost roughly $50 during this year’s holiday digital rush and frenzy. The current economic climate is also balking consumer confidence; as a result, folks are currently spending less money–and will continue to do so, despite any anticipated holiday cheer.
And even if your promotions are able to bring in a big crowd of new customers during the BFCM shopping season, be prepared for a slew of returns, too.
In 2021, the National Retail Federation found that retailers yielded a near 17% return rate throughout the holiday buying rush – quite the jump up from 2020’s 10.6%. So what can e-tailers safely expect for 2022? It’s safe to assume we could see similar numbers to last year–however, it’s more likely that the percentage will increase again.
That means it’s time to re-think your entire 2022 ecommerce strategy for Black Friday and Cyber Monday. And we don’t mean just re-writing and optimizing product campaign content. It’s going to take a lot more than that–including automating and streamlining your returns and exchange processes. Here’s how you can prepare.
Pivot to a sustainable growth mindset, if you haven’t already.
Even outside of Black Friday and Cyber Monday strategy, it’s a wise move for any ecommerce business to move away from a “grow at any cost!” mindset. It should come as no surprise that a “spray-and-pray” shotgun approach to generate revenue is a fool’s errand in the ecommerce space.
You need to identify specific, realistic, and actionable fiscal goals. Whether your business is bootstrapped; funded by series A, B, or C investments; or even backed by a bank, our current economic conditions are more than just a tad disconcerting.
Despite existing in this era of uncertainty, your safest and most realistic strategy should be locking your business into sustainable, long-term growth. Obviously, for all e-tailers, sustainable growth is inextricably-tied to the financial metrics that matter most for your business. The specifics will be up to you.
One crucial way to do that is by reducing customer churn–and more importantly–item returns. One of the best ways to focus on achieving sustainable growth is by empowering your customers to seek out exchanges over returns.
Customer retention is more important than ever.
In 2020, the National Retail Federation found that 18.1% of all goods purchased online were eventually returned. Perhaps even more alarming is the fact that at least 30% of all items purchased by online shoppers are returned. For your ecommerce business, getting an item refunded is not just the loss of a $100 sale you had in your hands.In reality, you lose the $100 sale plus whatever your customer acquisition cost (CAC) was for the sale. And remember: CAC is only going up.
As we previously mentioned, it’s imperative for your ecommerce business to encourage customers to exchange unwanted items rather than returning them for a refund. Keep in mind that even if a customer decides they either do not want or like one of your products, that does not mean the customer is swearing off your brand as a whole.
After all, 57% of consumers will stop buying from a retailer after a bad return experience. Hence, if you’re searching for sustainable growth strategies, start by giving your customers a reason to stick around–even if they return a purchase.
Keeping customers around for more than a singular purchase or an unhappy return is crucial for your revenue stream. When you give a customer a streamlined exchange option (as opposed to a return and refund) it keeps them happy enough to become a repeat customer. Meanwhile, you get to retain the sale; you also earn repeat business.
Shift your focus onto finding repeat customers: ones that continue to buy from you–ones that your business keeps happy. This is a concept Loop likes to refer to as net conversion rate.
Your net conversion rate is the total sum of your entire sales volume, minus your returns + your exchanges.. This final figure directly impacts your revenue stream and your bottom line. This tactic is exactly what Loop is renowned for; it’s how we empower you to redefine your customers’ journey.
Re-inventing your e-customer’s journey…even when they’re unhappy.
There may be an endless array of creative ways to define and cultivate your buyers’ shopping experience. But don’t just focus on customer acquisition channels – for sustainable growth, focus on customer retention in the post-purchase experience.
Any remotely capable digital marketer can get a customer interested in a product. But what about when the opposite happens–when a customer no longer wants your goods and demands a return?
Sure, you can fork over the money (and the CAC). For some online retailers, it’s the status quo.
But convincing a customer to not seek a refund, and to opt for something of equal or higher value, is where the future of ecommerce success will be determined.
Convert refunds into repeat customers.
For e-tailers, Loop empowers you to showcase curated product recommendations to your customers. Shoppers can browse through your entire catalog in mere moments, enabling them to find a suitable exchange option instead of seeking a refund.
Outside of improving your net conversion rate, Loop also holistically improves the customer experience, as your customers will be better able to find the right product before the wrong one steers them to your competitors. In fact, Loop allows you to get so granular with customer data that you can differentiate and offer multiple customer experiences based on your buyers’ traits.
For example, Loop allows you to offer generous “first-time-buyer bonuses” (or other discounts) to new customers as long as they convert from a return to an exchange. Or, for repeat customers, why not give them some “royal treatment” by offering them an extended return window (90 days instead of the standard 30)? Loop allows online retailers the ability to create dynamic buying and exchange experiences based on customer data, so you can engineer the ideal purchasing experience.
Offer seamless, simple returns.
Inevitably, some customers will request returns. It’s a cost of doing business and every ecommerce professional shares this experience. And, let’s be real: nobody wants to buy from disreputable businesses who make the returns process into a laborious, time-consuming hassle. That’s why 96% of shoppers check the return policy’s fine print before clicking “buy.”
Ensuring a pain-free, simple physical return process is a perfect way to maximize brand loyalty. Loop instantly helps you partner with multiple national carriers to streamline returns and exchanges. In fact, we even offer pick-up-at-home options as well as in-person drop-offs. We further simplify your returns by offering your customers a truly “hassle-free” process by utilizing box-free, label-free returns (using QR codes) with free shipping.
You may also consider employing a “Gratis Goods” approach for some customers. For example, if a customer seeks to return/exchange inexpensive goods, Loop provides you with the ability to offer your customer an opportunity to also keep their unwanted product while ensuring they receive a full refund.
This generosity entices the customer to come back to your store as it builds an uncompromisable sense of trust between company and buyer.
But, as always, it’s up to you. That’s what makes using Loop for ecommerce so unique.
Transform BFCM returns from a cost center into a profit center by converting customer churn into retention. With the right post-purchase technologies and processes at hand, you’ll be able to build sustainable growth into your BFCM plan.
Ready to finalize your BFCM plans? Book a demo today.