Market analysis
Understand your competition and lock in your positioning to succeed in your new market
Enhancing international returns: a customer-centric approach
Written by Søren Kjær Nielsen
Sitting on my desk right now are a pair of pricey football boots that I need to return to England. When I reached out to the store where I bought them, Pro-direct Soccer, all they said was that the responsibility of returning the boots lies with me.
Naturally, it is my responsibility, but did you know that 63% of online shoppers check the return process before finalising their orders? (1) The risk of paying €30 to ship a pair of boots back to the country of purchase can deter many potential buyers.
In this blog post, we'll take a closer look at international returns, exploring key considerations and how to establish a return policy that aligns with your ambitions in foreign markets.
First and foremost, it's crucial to approach the problem from two perspectives, focusing not only on the challenges faced by your webshop but also on the problems encountered by your customers.
The Customer's Problem:
When customers purchase from your webshop, they do not want a more complicated or expensive return process compared to what a local competitor offers. They are not concerned about your costs or the complexities of international returns. This highlights the importance of having a competitive return process, considering that 63% of shoppers evaluate return policies prior to making a purchase. As part of your market analysis, it's essential to examine your competitors' return policies and establish a benchmark that aligns with your webshop.
The Webshop's Problem:
Once you have defined a benchmark for a competitive return process, the next step is to determine how to offer this policy at the lowest possible cost. Three key parameters should be considered:
1. Convenience
Including a pre-paid return label in the package is undoubtedly the most customer-friendly approach. While this strategy may increase returns, it also boosts conversion rates and, more importantly, fosters customer loyalty among those who utilise or become aware of the service.
On the other end of the convenience spectrum, we have examples like my experience with Pro-direct Soccer. They offered no assistance, and as a result, my boots have been sitting on my desk for two weeks, causing me to miss the return deadline. In their case, the question is whether they won the order but lost a customer.
2. Time
Having a local return address where returned orders can be efficiently checked and handled places you on par with any local competitor. At MakesYouLocal, we offer this type of service and even provide the option to directly register returns in your system.
3. Cost
From a customer's perspective, convenience often outweighs cost, which is why these two parameters should be considered separately. It is up to your webshop to determine the acceptable return cost that customers perceive as reasonable. It could be free, or you may consider charging a nominal fee like €10.
Alternatively, you can pass the responsibility and cost of finding a return process and purchasing postage onto the customer. Simultaneously, you must analyse your own costs associated with handling returns, which may often exceed what you can charge the customer.
Navigating the Challenge:
Handling returns from abroad will naturally be more expensive than local returns. To be a serious player in a foreign country, you cannot increase costs beyond your competitors' levels, nor can you compromise on service quality.
Instead, view the cost as an investment in the new market, justified by the value of conducting business without establishing a physical presence in the country. Based on our experience assisting customers, we have found reliable and cost-effective solutions that prioritise customer satisfaction.
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