The CX balancing act: How ANZ brands can protect profits and delight shoppers
Hunter Johnson
·May 22, 2025
No matter where you are in the world, running an ecommerce business today is no cakewalk – but with the right technologies and practices in play, you’ll be well-equipped to build a sustainable brand that delivers on customers’ rising expectations.
Operational and acquisition costs are rising at record rates, and constantly-changing global trade policies make it harder to predict your profit margins on imported goods and cross-border commerce. Even so, the ecommerce market in ANZ is poised for solid growth: 2024 saw a 12% jump in ecommerce spending in Australia, with a record $69B AUD spent online.
Whether shipping domestically or abroad, delivering a great customer experience from end to end is paramount to your success in building a thriving brand. But maintaining a healthy profit margin is just as critical. That leaves many brands doing the CX balancing act, struggling to strike the right balance between customer experience and profitability.
But protecting your bottom line and driving top-line revenue don’t have to be at odds with one another. In fact, taking steps to level up your customer experience can be a significant driver in efficiency and profitability.
In our recent webinar, we brought together an expert panel to look at the challenges facing ANZ brands, and share best practices for successfully building a best-in-class CX that maximises profitability.
Our speakers are:
- Alexander Babich, Managing Director & Founder at Kulani Kinis
- René Rinfret, Enterprise Merchant Success Manager at Loop
- Michael Klonoff, Senior Technology Partnerships Manager at Gorgias
Watch the insight-packed webinar here, or read on for key takeaways that you can use to drive your business growth.
Profitability under pressure
At Kulani Kinis, an Australian swimwear brand that ships both domestically and internationally, “there's a cost of living crisis, and it's not just a cost of living crisis for people, but it's also for businesses,” says Babich. “I think that we're seeing shipping costs go up, we're seeing consideration around currency fluctuations particularly at the moment. That's had a really big impact.”
While shipping costs may be one of the biggest expenses on your P&L, especially for those selling internationally, there are strategies to help reduce these costs. For Kulani Kinis, they’re currently working to localize their fulfillment to reduce the financial impact of cross-border shipping.
Expenses associated with customer returns are also a significant driver of costs. Up to 30% of sales may end up as a returned product, which may cost up to 50% of the item’s original value in reverse logistics expenses.
And while rising returns fraud rates impact 60% of Australian brands, 74% of ANZ brands say that they prioritise the customer experience over fraud prevention, making them more hesitant to take action that may risk damaging their relationship with their customers, even at the risk of diminishing profits.
When looking to reduce operational costs and protect your bottom line, it’s important to closely evaluate your operations to decide where to pull back and where to further invest while maintaining an exceptional customer experience – ROI is key.
Here are some strategies for achieving profitability under pressure.
1. Proactive and transparent tracking
Shoppers invest in brands that they trust – so to win them over, it’s critical to instill transparency throughout your business.
For Kulani Kinis, transparency is key to the brand’s entire operating model. The business is bootstrapped and has never taken outside funding, meaning maintaining profitability is absolutely crucial to their ongoing success.
“I've got my entire leadership team who sit there and go, ‘How do we maintain profitability?’” says Babich. “I think the more that you introduce transparency into your business around the cost environment and how people can get involved with making savings and making real decisions, that's actually what allows people to do the work that you want them to do inside the business.”
Transparency is also crucial to customers, especially when it comes to order tracking. Thirty percent of shoppers are reluctant to shop cross-border due to shipping concerns, which may be alleviated with better access to real-time order tracking.
In fact, 96% of consumers track their deliveries at least once a day, and 59% say that order tracking positively impacts their loyalty towards a brand.
To build an optimised order tracking experience, focus on:
- A branded and personalised experience: Building a fully branded tracking experience - from email, to SMS, to your page - is a crucial way to engage shoppers with your brand.
- Proactive updates + delivery promise: Set up transactional message flows tied to delivery updates – whether good (“your order is on its way!”) or bad (“your order is delayed”). By sending proactive alerts that keep customers informed about status changes, they’ll gain more trust in your brand and reduce their reliance on customer support resources.
- Opportunities for upsell and repeat purchases: Make the most of your order tracking page as a touchpoint to provide personalised product recommendations and upsell opportunities. By re-engaging customers during the order tracking process, you’ll be able to drive higher upsell and repeat purchase rates.
Transactional touchpoints like email, SMS, and tracking pages build trust
Curious how you can optimise your transactional journey for upsell revenue and repeat purchases? Check out the full report!
Unlock all the insightsBrands are already fostering a best-in-class tracking experience using with Loop + Wonderment – the results speak for themselves:
- 23X ROI on order tracking investment
- 20%+ lift in same-month repeat purchases
- 43% reduction is WISMO tickets
- 5.5% conversion rate on branded tracking pages
2. Boost customer loyalty with a best-in-class return process
As we mentioned earlier, up to 30% of ecommerce sales may end in a return, which can be a major drain on profit margins. So how are best-in-class brands balancing a stellar returns experience against the need to maintain profitability?
They’re focusing on creating premier returns experiences that keep customers coming back. An overwhelming 98% of shoppers agree that a fast, convenient return process makes them more likely to shop again. On the flip side, 84% of shoppers who have a negative return experience simply won’t shop with that brand ever again.
So how can you create a return experience that builds loyalty?
Streamline the return process
“You really want to avoid the negative, because there's massive consequences, but there's also a huge upside when you can make that really frictionless experience,” says Klonoff.
“My top tip would be to automate returns. You want to have these self-service flows and today with Gorgias, we can deep link to Loop Returns’ RMAs and send those to the requester. So that just takes them right to the point where they can initiate that self-service process right there. That integration is key.”
Optimise for product exchanges
Don’t miss the opportunity to retain revenue from your returns. If your shopper receives the wrong size, or doesn’t quite like the specific color in person, that doesn’t mean they don’t want your product: it means you have the perfect opportunity to make it as easy as possible to receive the right item for them, building customer loyalty along the way.
With features like Shop Now and Bonus Credit, you can make the exchange process as enjoyable as shopping. With a flow that incentivises exchanges and directs shoppers to your full catalog, they’re more likely to leave with an item they love. Merchants that use Loop’s exchange features transform 57% of returns into exchanges, on average, with an average $2.12 upsell per return for ANZ brands.
Alex calls out the fact that returns, while often seen as a sunken cost, can actually be the complete opposite with the right tools and seamless exchange processes in place: "Don't look at this [returns] like it's a problem, look at it like it's a secondary opportunity to show the value that your brand has."
Treat your customers like VIPs
Make the most of opportunities to personalise the returns experience for your customers, with features like Instant Exchanges or Refunds and return method optionality. “You can vary methods of drop-off, or provide your consumers with more options when it comes to Keep Items or items that could be donated to a donation center because there's no ability for you to resell it as a brand,” says Rinfret. “This also provides a better customer experience in general.”
Strategically test return fees without hurting CX
It’s also important to note that consumers and retailers alike are increasingly receptive to return fees. Today, 63% of Loop merchants charge return fees, which is up by 47% since the start of 2020. And our data shows that these fees have no negative impact on return rates or repeat purchase rates.
By testing out a transparent flat return shipping fee, or using Loop’s Offset tool to charge shoppers a small fee upfront for access to free returns later, you’ll be able to control your reverse logistics costs without impacting the shopper’s experience.
3. Drive efficiency through automation
From email flows to customer support and real-time inventory stock sync – automated systems lead to faster outcomes for customers and quicker time to restock. This speed is crucial for customer satisfaction and ensuring items are able to be resold.
“Optimised order tracking is one of the keys to reduce ‘where's my order?’ tickets,” says Klonoff. “And that's going to free up your team for higher value work.You really should be looking at integrating tools like Loop and Wonderment, for example, in Shopify all together with your help desk, Gorgias, because what that's going to do is let you pull real-time tracking data directly into those automated responses.”
Other forms of automated workflows can also help you to drive enhanced visibility and efficiency in your business, such as around inventory management. “Understanding and having more flexibility with local 3PLs is really going to also give visibility to the help desk, where it could flag that, ‘maybe this order can still be changed because it hasn't gone from being picked to packed yet, and it hasn't been sent out,’” adds Klonoff.
“So the more visibility you have, the better a customer experience you can give. Make sure that self-service tools are available because people want quick answers, and then make sure your automation flows are set up to handle those common tracking inquiries instantly.”
4. Combat return fraud without punishing your best shoppers
As we touched on earlier, returns fraud is a growing problem, yet Australian merchants are particularly sensitive about not wanting to disrupt the customer experience with anti-fraud measures that might alienate loyal shoppers. Just 46% of brands rate their current fraud prevention tactics as “very effective,” which means they’re likely to be losing money to fraudulent and abusive tactics.
A few strategies to combat fraud without sacrificing your customer experience include easily accessible and transparent return policies, optimised sizing resources to reduce bracketing, testing return fees to discourage orders with the expectation of returning, and keeping a close eye on analytics to identify product SKUs that are more heavily returned or repeat offenders.
Loop’s machine learning algorithm works by analysing every return request for potential indicators of fraud, so that you can block or manually review the transaction. To date, 87% of confirmed fraud has been successfully flagged by Loop’s fraud model.
By using best-in-class technology and automated workflows to mitigate against the impact of fraud, you’ll be better equipped to stop offenders in their tracks, without negatively impacting the returns experience for your well-meaning shoppers.
It takes a delicate touch to strike the right balance between maximising profitability against catering to high customer expectations. By deploying best-in-class technology that delivers a streamlined experience and optimises for revenue retention at every turn, you’ll be well-set to build a sustainable brand that shoppers will remain loyal to for decades to come.
Tap into more of our panelists’ insights and get their predictions for the future of ecommerce: Watch the full webinar.
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