How To Leverage Your Shipping And Returns Policy As A Marketing Strategy

Ben Freedman, CEO of Boomerang, a platform transforming returns from an inconvenience to an asset for e-commerce brands.

Direct-to-consumer (DTC) brands upped their marketing budgets over the last year (59%), but only about half saw increased sales (54%). While not a large gap, it shows that some brands are still not seeing the ROI they expect from increased marketing budgets.

Marketing can be the most obvious answer to most brands looking to boost revenue numbers, but it doesn’t always produce the intended results. DTC brands are left looking for creative ways to grow their business. One new approach to consider: leveraging your shipping and returns policy as a marketing strategy.

Staying Competitive With Your Shipping Policy

Founder and CEO of Amazon, Jeff Bezos, has explained the company’s DNA to “low prices, fast delivery and vast, huge selection.” Much of the company’s success can be directly tied to its easy and efficient shipping and returns policy. Back in 2018 when the company first announced free shipping for every order, regardless of order threshold, it set the pace for retailers and brands around the world.

The truth is, a good shipping policy can lead to more revenue because customers love free shipping. While Amazon offers the enticing “no order minimum” free shipping policy, it isn’t necessary to stay competitive. There is still the option to offer free shipping in conjunction with other offerings that can help drive revenue. Some of these tactics include purchase minimums, buying more than one item and offering free shipping during highly competitive shopping seasons.

Offering free shipping can also encourage shoppers to follow through with their purchases. According to Baymard Institute, approximately 70% of online shopping carts are abandoned. Of abandoned carts, FuturePay reports that over 80% are abandoned because of shipping costs. In short, offering free shipping and marketing it on the product page all the way to checkout could help increase the likelihood that a customer will follow through with the purchase instead of abandoning their cart at the last minute.

Revamping Your Returns Policy Can Lead To More Revenue

Over 90% of customers make repeat purchases based on return policy alone.

This fact is an important one, particularly because customer acquisition costs are among the highest costs for DTC retailers. As the rule of thumb states, acquiring a new customer can be five times more costly than retaining an existing one. Because of this, investing in features that entice customers to return is a better return on investment than marketing to potential new ones.

Now you might be asking, what offerings make a good return policy? Here are a few key examples:

1. How many weeks does the customer have to create the return after purchase? For the best customer experience, create long return windows (ten weeks or more).

2. What channels are available for the customer to process a return (online, email, phone, etc.) and is the process hassle-free? A robust online portal to automate return processing, designed to be completed in a few clicks, offers the best experience.

3. Is the refund automatically credited to the purchase card? Customers expect automatically processed refunds.

4. What channels (shipping label, in-store, pickup) are available to transport the return? Offer multiple return options: carrier drop-off, in-store drop-off and home pick-up (which is three times more popular than carrier drop-off and four times more popular than in-store drop-off, according to Pitney Bowes research).

5. Are returns free or does the consumer pay for shipping, a restocking fee or both? Include returns for free (over 90% of shoppers cite free returns as important, a leading indicator of the return experience).

The more of the “best customer experience” options above that your brand employs, the more consumers will love shopping with your brand and make you their first stop for purchases in the future.

The importance of a customer-friendly returns experience becomes immediately apparent when looking at the other leading retailers: All of the Fortune 50 retailers cover return shipping costs for customers.

Marketing Your Shipping And Returns Policy

So you’ve decided to implement a customer-friendly shipping and returns policy, now what? DTC brands now need to make customers aware of these distinguishing perks.

A Wharton Business School study cited 60% of e-commerce companies found “free shipping with conditions” to be their most successful marketing tool. One way to do this is to make your shipping and returns policy a part of your marketing strategy. This means mentioning free shipping and easy returns on every major webpage that gets customer visits, e-newsletters and any other materials you may use to market to potential customers.

It’s also important to market an enticing returns policy. According to recent research, 60% of shoppers look at the return policy before shopping, so it is important that the policy provides a good first impression. An online returns policy should be clearly stated, easy for a customer to start their return and give them multiple options such as returns for full refund, store credit or exchange it for a different size or style.

Large marketing budgets don’t have to be the only thing brands depend on to boost revenue numbers. Leveraging your shipping and returns policy as a marketing strategy can help brands compete with large retailers, entice repeat customers and convert abandoned shopping carts to sales.

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