Returns are a critical part of the customer experience. A poorly run system can have a major impact on your business. With shopping behaviors changing—from seasonal to on-demand—customers are expecting products to always be available so they can shop whenever they want to. Many companies have had to modify their operations to keep their customers happy. Terry Bicycles, an apparel and bike parts distributor from Vermont, is one of those companies. We spoke to Liz Robert, the company’s CEO, to learn just how Terry Bicycles altered its return strategy to find a better solution for their customers and their business.
How have your customers’ shopping behaviors changed in the last 15 years?
Today’s customers are typically ordering online shortly before an event. Maybe they’re going on a group ride for the weekend. The closer that they order to the date they need the product, the more critical it is that we’re able to respond if the product isn’t satisfactory. The on-demand nature of our consumer has inspired us to be on-demand reactionary.
How has the on-demand shopping model affected the apparel industry?
We have a lot of sizing issues, obviously; it’s technical athletic wear. It’s difficult to get things to fit properly, particularly with a new customer who isn’t familiar with our size charts. We have to be much more responsive in being able to get the product back and replacing it in the correct size or something more suitable for their needs. So it’s not just that the consumer is behaving in a more on-demand fashion with their purchases. Their expectations around getting it right are much higher and require a much quicker turnaround.
How has the on-demand shopping model changed your return strategy?
What’s been impacted is the flow and the fact that we need to respond quickly. I’ve been giving you the consumer’s perspective, and obviously customer satisfaction is very important to us. There is also a benefit to us, as a manufacturer and as a brand, to be able to get that product back as soon as possible, particularly when it’s on demand and particularly as we get deeper and deeper into the season.
Because our products are fashion-oriented, they are very seasonal. So the prints that we create for Spring 2016 are different than the ones that we create for Spring 2017. It’s important to us to sell returned product again at full-price and in the same season.
What challenges do you face in this environment?
Mondays and Tuesdays are our largest return days. They’re also our largest selling days. We can’t afford to have the staff on the phone and in returns to meet that volume on those two days and then have them sitting around and twiddling their thumbs for the last three days of the week. In order to keep our work force flexible, we cross-train individuals in the warehouse. Obviously, our process isn’t perfect, but we try to keep the flow under control and as even as can be without having to hire more people certain days of the week.
How does your warehouse process change to fit this new demand model?
I think the biggest impact that it has on the warehouse process is the need to be able to be flexible by day of the week. We do a lot to cross-train our workforce in the warehouse, so if the phone’s not ringing, we can have people in the calling center help with certain aspects of returns. Vice versa, there are certain people who are involved in pick, pack and ship who can be involved in the returns process—specifically the opportunity to put the product back into inventory.
What tactics do you implement in order to be more responsive?
In the past, up until three or four years ago, we sent out returns information on the packing slip or invoice. It listed the returns department and our address. We posted it on our website, catalog and customer service notes. Now we send out a return label, so customers don’t have to go to the website and find out the return address or take it to the Post Office. They can simply take the label that’s in the package and use it on the same packaging let’s say a pair of shorts arrived in. They’ll put the shorts back in the package with the packing list and send it back. From the consumer’s perspective, it takes many steps out of the processing of the return.
What effect does including a return label in your shipments have on your customers?
Honestly, they prefer it. I would say the majority of our consumers use the pre-printed label, even though it costs them perhaps a few dollars more. We include a small handling fee for arranging and processing, which is why the price is higher. Because of the convenience and again because of the speed at which they’ll be credited for the return, they choose to use the label provided. It’s all about convenience and expediency. We also allow them the option of making the return themselves. This way, if the customer wants to handle the return at the Post Office and not pay the handling fee, they can. It takes the pressure off and that, I think, is very important to them.
What is one thing that surprised you about this new process?
The biggest skepticism I had in doing this was whether or not people would pay more for the convenience of the label. We were extremely surprised that most of our customers now use that label to return the product. It taught us a lesson on the value of convenient service. People will pay for it. That to me was a big breakthrough.
Take a page out of Liz Robert’s book. Even though every company has its own pain points, it must adapt to shopping behaviors. By offering multiple return options, tweaking your warehouse processes and cross-training employees, you too can meet your customer’s ever-growing demands.
When it comes to meeting customer demand, responsiveness is the name of the game. A Ship from Store (SFS) system allows companies to address these escalating needs by putting their unused store stock to use. With the right strategy, your business could be on its way to servicing more and more customers. So how do you successfully implement such a system? Below we highlight the most important steps to take, from planning to setup.
Dedicate the time and space.
Not all of your business’s physical locations need to have SFS capabilities, but the ones you choose to include in your SFS system must have the space to facilitate fulfillment operations. Consider selecting locations that will enable fast delivery and, if possible, enable packages to reach customers in 1 to 2 days. Once you decide the on stores, section off an area for fulfillment purposes alone and establish how and when merchandise will be picked and packed.1
Set up the necessary systems and technology.
A critical part of SFS is managing inventory. With the right order-management system, you’ll be able to treat stores as fulfillment centers and efficiently use the stock they have to manage demand near real-time. That way, when an order comes in, the right store can be notified and begin the picking, packing and shipping process.2
Train your in-store staff to have warehouse skills.
Your store staff will need to learn the ins and outs of this new operations process. Teach them how to accurately pick, pack and ship inventory – without taking away from their primary job of selling merchandise and servicing customers.3
Deliver an omni-channel experience.
Maintain consistency with your warehouse-based operations, by keeping your packaging uniform regardless of shipping origin. Invoices, return labels, etc. should follow suit. With a consistent brand experience, you can bridge omni-channel gaps between customers, stores and distribution centers.4
Leverage the services of integration specialists.
When you utilize the USPS® for shipping services, our representatives can help you launch and refine your own SFS system. Operations Integration Specialists and Technical Integration Specialists can help guide you through setup, transportation, equipment, payment and processing systems, assessing how to use your locations efficiently and addressing any first-day issues that may arise—all free of additional charges.5
As more consumers expect products to be constantly available, it’s important for businesses to pivot and adapt to meet their demands. With the right strategy and resources, your company can implement a successful SFS system and start answering more of your consumers’ needs.
Companies with return-based business models have become increasingly popular and profitable in recent years. The home test-kit industry, for one, is booming. The home test-kit model, which pivots on returns, allows customers to complete test kits in the privacy of their own home, then send them to a lab to get their results. In only a few decades, many businesses have found success in this niche market.
The Rise of Home Testing
It all began with the pregnancy test kit. Before the advent of the modern pregnancy test, women had to send their tests directly to the lab. The success of this very first at-home test kit led to the development of DNA tests. Home tests followed soon after. At the same time, e-commerce was on the rise — all key factors that spurred growth for the home test-kit industry. Today, the applications are numerous and span countless fields of business, from personal health to home safety.
As evidenced by the graphic, home test kits require an intricate return model with complex shipping and return needs. For such a process, simplicity is key. Brand loyalty is earned in the many touch points between the company and the customers. To make the model work, a business should study companies that have nailed the process. The best of the best spell out their customer journey in a few simple steps — explaining each stage, the price of the return, how long customers will have to wait to get their results. Some include a section of frequently asked questions. There they answer pressing questions about how the tests work, how a customer can access their results and more. To counteract the off-putting effect of bad returns processes, companies must create a convenient experience for their customers with clear communication at the final results stage.
Planning for Peace of Mind
Those interested in starting a home test-kit business usually start by mapping out their customer journey. This insightful practice can help a company learn how to serve its clients and ultimately boost its sales. Once customers have completed their test kit, how will they send it back? When it comes to returns, there are many options available to the modern business:
- Hand-Off: In this interaction, customers can hand off the test kit directly to their mail carrier. This is a low-effort option that nixes their travel time.
- Pickup: Here, a customer can schedule a pickup at a time that is most convenient to them. This tailors the experience to their needs.
- Drop-Off: Finally, a drop-off option allows customers to get the ball rolling by immediately bringing the kit to the shipping center.
Getting the Results
In a typical e-commerce transaction, refunds and refund time have a major impact on the customer experience. For the home test-kit model, results play a parallel role. Many companies set clear expectations from the get-go. This ensures that customers understand how long it will take to process and determine the results of the test. Those that provide results through multiple channels — e-mail, website or mail — make the process even easier for the customer. Creating a system with multiple access points gives customers control. Clearly communicating these policies in the early stages of the marketing journey allows for an even greater conversion rate. In-the-know customers are, of course, happy customers.
Home test kits provide an invaluable service for users. Though the process is complex, when done right, a good shipping experience delivers better results for everyone. Learn more about how an optimized return strategy can positively affect your bottom line.
Tasked with implementing your company’s direct mail strategy? No matter the size of your business, opportunity is at your fingertips. New technology and design practices are revolutionizing the marketing industry. Finding that perfect balance of creativity and strategic edge takes time. Research is as crucial as experience, so we did the hard work for you. Below you’ll find a curated list of case studies featuring technology innovations that can transform your marketing efforts, build brand equity and increase market share.
Quick Response Codes
This interactive bar code has found its way onto coffee cups, subway station posters and mailers. With one snap and the right app, the code launches a rich digital experience.
Case Study #1: Organized Sports
Event managers were looking for a way to create a single unifying experience for their attendees. QR codes provided a seamless solution. Over 50 unique codes were created and added to signage, publications, e-tickets and more. QR codes provided important information, allowed sports fans to share their experiences through social media, brought people to the mobile store and guided them to official apps. In the end, QR-code users scanned event material an average of 1.6 times.1 Although attendees of all ages responded, the largest group of scanners were ages 55 and up. Ultimately, the codes helped increase downloads of the official app to a total of 15 million, while simultaneously enabling the collection of detailed data on location and demographics.2
Case Study #2: Telecommunications
One company sought a way to integrate QR codes into its newest ad campaign. This omni-channel effort advertised the wide variety of smartphone apps available to its users. QR codes were added to print ads, in-store displays, direct mail, websites and iPad ads. In three months, the campaign saw 150,000 scans, with users ages 18–24 racking up the most scans.3
Put simply, Augmented Reality (AR) takes static images found on print ads and brochures and translates them into dynamic digital experiences. With a special app, users scan photos that allow them to view videos, shop at mobile stores or even try on makeup virtually.
Case Study #3: Cosmetics
One beauty company was looking for an original way to reach and interact with customers, hoping to drive digital try-ons for their nail polish and prevent product returns as a result. Working with an AR company, they created full-page magazine advertisements with hidden capabilities. At the side of each ad, consumers were instructed to download a special app. By scanning the ad with their smartphones or tablets, readers could try on 40 different nail polish colors by taking a picture of their hand. Users could save the images and post them to social media. Over 10 percent of users did just that. On average, each user spent four minutes on the application. After studying the consumer behavior data collected by the app, the company was able to make informed stock-replenishment decisions and color choices for future advertisements.4
Case Study #4: Retail
One furniture company added AR capabilities to its yearly catalog, hoping to inspire customers and facilitate a better shopping experience. Using the brand’s app, consumers could superimpose pieces of furniture onto a real-time 360°/180° view of their home. In the end, the company was able to drive even more customers to their app and website.5 Another retail company, used AR in conjunction with outdoor art installations. Cities around the world featured these branded billboards, sculptures, projected media and kiosks. Using a special AR app, consumers could take photos of each piece and pull up extended content about the campaign.6
Near Field Communication
This technology allows a chip, typically a sticker placed onto a billboard or print ad, to communicate with a compatible smartphone. Through radio waves, the NFC tag drives the user to digital content, mobile stores, sign-up offers and more.
Case Study #5: Film
As a big movie premiere approached, one studio wanted to grow viewer interest and engagement with a futuristic campaign. Working with an NFC company, they created NFC-enabled posters that encouraged users to tap the image with their smartphones. Once the posters were tapped, users instantly accessed behind-the-scenes footage and additional content without having to download an app.
Case Study #6: Uber
The mobile ride-hail company put NFC technology to work as it expanded its reach in northern England, primarily Manchester, Sheffield and Leeds. For four weeks, Uber provided the cities’ pubs with NFC-enabled coasters. The logic: coasters shared the same table space as smartphones — the only device capable of accessing NFC content. To drive conversion, Uber gave an incentive: consumers who tapped the tag were offered £15 off their first ride.7
Case Study #7: Nokia
To promote its N9 smartphone in Dubai, the company added NFC tags to advertising stands and posters. N9 users who tapped the content accessed free vouchers for movie tickets or popcorn. The addition of NFC not only brought value to the user, it also enhanced the brand’s omni-channel strategy. As a result, Nokia won the Best Marketing Campaign using Contactless/NFC Technology Award at the Contactless Intelligence Awards in 2012.8
Ideas Worth Implementing: Quick response codes can be added to any print material, whether a brochure or mailer. They can offer additional product information, a promotional coupon or send customers directly to your mobile store. AR apps and NFC tags can give your customers access to product demos and manuals, customer testimonials and more.
This type of content merges print and digital by adding video devices to print media in magazines, mailers and more.
Case Study #8: Broadcast Television
Looking to build excitement around its fall TV lineup, one network decided to place a VIP piece within the pages of a popular magazine. Select subscribers in New York and Los Angeles received the enhanced issue. As users opened the card-like insert, a high-resolution video played a special clip from the stars of the show. Although the piece was released in select markets, the innovation of this VIP promotion won free publicity for the network. Multiple online publications picked up the story.9
Case Study #9: Automobiles10
Gearing up to launch its newest truck, one company sought a fresh way to hit its target demographic. Working with a publishing and VIP company, they created an insert for two magazines that included a 4.3″ LCD screen. Using the publisher’s consumer data, the company found 20,000 readers who fit the profile of the truck’s owner. Video content was then tailored to this all-male demographic. Ultimately, ten thousand subscribers per magazine were sent copies with the VIP insert.11
This technology adds mobile capabilities, like call or text features, to print media like direct mail, making mailers literal calling cards.
Case Study #10: Technology
A multinational company was searching for a marketing idea that could boost brand awareness and grab consumer attention around the world. Combining VIP and mobile-in-print, the company created a mailer that shared the CEO’s vision on a small LCD screen. Customers were then encouraged to call a representative to learn more. The card, embedded with a microphone and speaker, allowed users to make up to 50 calls. After seeing success in the first mailing, the company reordered copies 30 days after launch.12
Case Study #11: Insurance
After hearing multiple complaints about their help line, one multinational insurance company took action. Instead of making customers call in and wait for an agent, the company simplified the experience. Mobile-in-print mailers were sent out, prompting customers to use the keypad embedded on the page to enter their mobile telephone number and license plate information. Once the information was submitted, customers received instant insurance quotes on their mobile devices.
This up-and-coming technology mixes ink with carbon, copper or silver, which then serves as a wire for an electronic device. Although its applications are still in research and development, conductive ink can generate noise, pull up an app and light a bulb.
Case Study #12: Beck’s
This beer company created innovative outdoor media to coincide with New Zealand’s Music Month. The ads were designed to look like audio equipment with a number of functioning buttons for users to press. When touched, these “Playable Posters” became 80-watt speakers with 20 touch points and over 12 minutes of new music and audio.1314
Ideas Worth Implementing: A business can solve customer service issues by sending mobile-in-print mailers with a simplified dial-in process. Video-in-print brochures can showcase a new campaign or a new line of products, while conductive inks can create never-before-seen interactive content to advertise your company at a conference or event.
These specialized inks make colors disappear or reappear in reaction to heat, cold, light or moisture, making them perfect for a popular direct mail tactic: the secret message. There are four kinds being used today: leuco dyes, photochromics, hydrochromics and flasher.
Case Study #13: Knorr
This company, known for its soups, was in need of a campaign for its new line of frozen products. Knorr wanted to do more than build product awareness. Working with an advertising agency, they set out to change perception of frozen food as a whole. The company sent out a mailer with the line “unlike any F****N dinner you’ve ever tried” printed in leuco dye. Consumers were prompted to put the piece into their freezer. In response to the temperature change, the paper revealed a whole new message: “FROZEN meals can be this delicious.” The campaign was so successful, half of the mailing was postponed so stores could manage the demand. In total, it prompted 17,000 purchases, thanks to an average response rate of 10.2 percent.15
Case Study #14: Food & Beverage
To generate excitement around a new water-enhancing product, one company created a magazine ad with hydrochromic ink. At first look, the all-white page featured a full glass of H2O with text that prompted consumers to cover the page in water. When wet, the print ad revealed a secret message highlighting the thrilling applications of water and made sure to remind readers that the new product could make a boring drink awesome again.16
This category is technically known as shaped mail, because of the creative shapes these mailers take on. These print pieces come in many different physical forms and can be tailored to the needs of a business.
Case Study #15: Telecommunications
One telecom company wanted to see which type of mailer would drive more customers to their high-speed internet business. To test their theory, they sent out four different types of cards — a pop-up mailer, Customized MarketMail®, a plastic mailer and simple cardstock. In the end, Customized MarketMail had the highest average response rate of 2.1 percent.17
One clothing company sent out two types of mailers — a simple card and a Customized MarketMail piece. After targeting the top 30 percent of their client base, the company found the shaped mailer had a response rate 1.75–3 times higher than the one made of simple cardstock.18
These lightweight mailers transform into three-dimensional designs that instantly stand out from the pack.
Case Study #16: Broadcast Television
Looking to promote its fall TV lineup in an original way, one network found their answer in 3D mail and video-in-print. The result was a VIP screen mounted in a 3D mailer. When consumers received and opened their mailer, the screen began playing branded content.19 In another instance, a television show decided to take a more innovative approach to promoting itself during awards season. Voters were sent mailers that, at first glance, appeared perfectly ordinary. When opened, they transformed into a memorable 3D pop-up.20
Ideas Worth Implementing: Interesting inks can reveal promotional offers or even help consumers rethink your products, while Customized MarketMail and 3D mail can help launch your products in original, memorable ways that are sure to separate you from your competition.
A well-executed return strategy builds brand loyalty, it’s true, but in the current retail landscape it’s proven to be one cornerstone of a vibrant e-commerce business. Some smart companies have put their return processes to work, making them integral parts of their business. Take the home try-on model, which allows customers to try products before they buy them. In recent years, a number of growing companies have found success with this high-volume strategy. They’ve done so by nailing their logistics and, more importantly, by building their businesses 100% on returns.
Home Try-Ons Explained
In this model, businesses ship products to customers for little or no cost, allowing customers to try products—clothing, eyeglasses, etc.—before making a purchase. Any pieces the customers don’t return back to the company, they pay for. Naturally, this strategy necessitates a 100% return rate, meaning almost all shipments are expected to be sent back, whether they include some of the products sent or all of them. Here we list two companies who’ve made it work:
Positioned as a clothing rental service for plus-size women, this startup allows customers to choose their favorite styles from a curated collection of designer brands. Each shipment includes 1-3 of these pieces, which customers can borrow for as long as they want and ship back when they’re done. Anything they love they can keep for less than retail price. The rest they send back free of charge. Essentially a home try-on model with rental perks, Gwynnie Bee’s business is built upon its understanding of a certain customer – the plus-size woman who loves trend-right clothing.1
In six years, the eyeglass startup has gone from an anonymous LLC to a market disruptor. From day one, the company offered to send their customers five frames to help them pick the best product. As a result, the fledgling business hit its first-year sales goals in its first three weeks.2 Understanding and tackling the challenges of online shopping was key to Warby Parker’s success. By implementing a no-pressure home try-on model, the company was able to serve its customers a personalized experience in the comfort of their own home. Now, other competitors have mirrored this return strategy in the hopes of winning business.
Getting Up and Running
To boost margins, rethink your packaging dimensions, contents and composition. This should be your first consideration when mapping out your return strategy. No matter the size of the operation, companies that sell light products with high margins are best suited for the home try-on business. Since this return model necessitates a larger volume of shipments, lightweight products keep costs down, while high margins cover the total price of shipping.
Next, you’ll want to focus on your return process. How can you increase efficiency and speed before you bring the model to market? Analyze your system and warehouse operations. Look at your inventory tracking process. Is it accurate? Since the majority of your shipments will be sent back, you’ll want to be completely aware of your stock, as will your providers and your customers. Fuzzy, incomplete data slows operations and frustrates customers. A well-oiled tracking system will help both the front-end and back-end.
Leverage all your analytics to get to the heart of your customers’ purchase behavior. Your work will show through. For high-volume models like this one, you want to keep your return rate down. Guiding your customers to the right products will keep you from wasting your cash on operation fees. Stay on budget before you see a cent. The more accurately you can predict and present the best-suited products for your customers, the more profits you’ll see.
Continue gathering data about your customers and their experiences. The more data you have about your customers, the stronger your marketing efforts become. The home try-on model allows you to track the styles, colors and sizes your customer purchase. With that information, you can tailor future shipments around those preferences and send customers pieces they are more likely to purchase.
Consider the Customer
Beyond logistics, the key to a winning home try-on strategy is empathy. Whether you’re a corporation or a small online business, the market rewards companies in tune with their consumers. Listen well.
Thanks to a booming online retail market, increased competition, endless reviews and social media feedback have firmly put the power in the hands of customers. Let them have it:
- Leverage the convenience of home try-ons by making the service free or low cost. Charging a $1 refundable fee for the try-on kit, like Warby Parker does, puts less pressure on customers.
- Be sure your return policy doesn’t stop them in their tracks. Create clear communication that easily explains the try-on process.
- Deliver your message on your website, mobile efforts, social media, e-mail and text. Sending tailored cross-channel content and merchandise recommendations creates a seamless, memorable experience amidst a sea of endless offers and options.
Embrace the opportunities in this new wave of innovation. Whatever the climate, customers will follow the companies committed to understanding and serving them.
Learn more about how an optimized return strategy can positively affect your bottom line.