Strategies To Streamline Return Management And Reduce Cost: A Complete Guide

Here’s a fact— at least 30% of all products ordered online are returned as compared to about just 9% in brick-and-mortar stores. Also, a survey suggests that 92% of consumers will buy again if the brand’s online return process is easy.

What does this data depict?

The need to have an easy return policy for any E-commerce brand. 

Having a return process in place allows your customers to have confidence in buying from you. It’s a signal from you that you put your customers’ satisfaction above everything and value their time and money. 

However, handling returns isn’t easy. You need to have a streamlined Return Management process while keeping costs down.

In this article, we’ll be talking all about that. Starting from the basics.

What Is E-commerce Returns Management?

In retail or E-commerce, Returns Management is a procedure that deals with customers who wish to return purchased items. This process involves engaging with customers, receiving returned products, and replenishing the stock with returned items. It is crucial for retailers to handle Returns Management effectively as mismanagement can lead to significant cost implications.

Why Do Customers Return A Product?

Returns aren’t a bad thing, in fact, it’s inevitable. No matter how good your products are, there will always be returns.

However, you can always decrease the return rate by implementing some common strategies. Now to decrease the return rate, you first need to understand what are the common return reasons. Here are a few reasons why customers return products:

Incorrect Product Size

Over 50% of the returns are because of sizing issues. While this may seem beyond the control of an online store, there are ways to mitigate it. 

In a physical store, customers have the opportunity to try products and get a better idea of their size. They can even try on clothes and shoes to check for proper fit and comfort. But this is not possible while shopping online. Discrepancies due to sizing can easily be tackled by offering detailed product description and using size standardization. There are many plug-ins available in the market to help you recommend accurate sizing to your customers. 

Product No Longer Required

Many customers order products online, but sometimes circumstances change and they no longer require the item when it arrives. For instance, a customer may have ordered something online and by the time it comes, you might have got a better version offline, thus not needing it anymore. 

Another reason for returns is when an upgraded version of the product becomes available. Electronics, such as chargers, mobile phones, tablets, and laptops are common examples of this. While this type of product return may be out of your control, there are ways to encourage customers to keep the product by highlighting its unique benefits and/or offering a discount coupon. 

Mismatch Between Product And Description

It’s not uncommon for products to appear different in reality than they are described in the product description, which can lead to customer disputes and reflect poorly on business practices. To avoid this, product descriptions must be detailed and accurate. 

Crafting complete, clear, and accurate descriptions is crucial to answering customers’ questions and avoiding disputes. Additionally, it’s important to proofread the descriptions and accompanying images before publishing them, as first impressions matter. Take the time to write, read, edit, re-edit, and proofread descriptions to ensure their accuracy and avoid any potential misunderstandings. Make sure your descriptions are accompanied by clear product images from different angles, leaving no surprises for the end consumers. By providing clear descriptions and real-life product images, sellers can prevent unnecessary disputes and returns. Read our blog on how to click awesome product photographs to get started. 

Wrong Product Shipped

Effective product picking is a critical task in the fulfillment process, and failure to do so diligently can lead to a significant number of returns. It’s important to ensure that the correct products are properly sorted and selected, as mistakes can result in unnecessary labour and shipping costs. 

To mitigate this risk, partnering with a 3PL (third-party logistics) fulfillment provider with robust OMS (Order Management Systems) can be a viable solution. These providers have expert teams who handle products, sort them, and pack and ship them. They also offer storage solutions, and when an order is received, they can process it on your behalf. By utilizing the services of a 3PL provider, businesses can minimize the risk of errors in product picking and save on associated costs.

E-commerce Return Management Process Explained

E-commerce Return Management Process

The Returns Management process involves multiple touchpoints or points of interaction between the customer and the E-commerce business. However, it all begins with the customer initiating a return.

Customer Requests A Return On Their Order

Returns can occur for a variety of reasons, some of which may seem illogical and based solely on the customer’s emotions. Let’s consider the scenario in which a customer is dissatisfied with their order. 

In this case, the customer would select the item they wish to return and provide a valid reason, as requested by the E-commerce business.

Return Request Is Rejected Or Approved

If return requests do not meet the conditions set by the E-commerce business, they may be rejected, and the interaction regarding that order ends. 

However, if the return request is valid, it can be approved, and the process for initiating the return will begin.

Order Is In Transit

From the moment an order return is scheduled to be collected until it reaches the E-commerce store, it is considered to be in transit. During this time, E-commerce brands can take advantage of these moments to share return status updates with their customers.

Product Is Returned To The Store

After the returned product has been received by the E-commerce store, collecting customer feedback on their shopping experience with the brand can begin. If the feedback is positive, the E-commerce business can consider encouraging the customer to shop for a replacement product (if they haven’t already chosen one).

E-commerce Returns Management Process: Best Practices

We’ve already talked about the importance of having a good Returns Management process in place and now here are some best practices to help you achieve the same.

Have A Shopper-friendly Returns Policy

More than 67% of shoppers check a brand’s return policy before buying. This is why it’s imperative to dedicate a page on your website clearly describing your return policy.

Here are a few things to consider while creating a return policy-

  1. Clarify conditions and deadlines for return.
  2. Mention your objectives and customers’ needs clearly.
  3. Don’t encourage fraudulent returns and wardrobing.

By creating a customer-friendly returns policy that balances flexibility with the E-commerce store’s objectives, a win-win situation can be achieved. This can result in increased conversions without the need to spend excessively on customer acquisition or return-related expenses. 

To ensure that customers can easily find the returns policy, it should be prominently displayed in areas of high visibility, such as the home page, product pages, checkout page, and FAQ section. This will help to minimize confusion and streamline the returns process, ultimately improving the customer experience. Read our complete guide on E-commerce return policy to get started. 

Avoid These Common Mistakes

Here are two of the most common mistakes that brands make while selling online.

Mistake: Inaccurate product photo

Photos are among the first few things that customers check before buying any product. If the photos are misleading or different from the real product, the chances of returns are high.

Solution: Keep the photos real. You can make it look attractive but make sure it still shows what exactly the product is like. You can also ask your customers to share real-life photos of the product. Ask them to post their pictures of your product and tag your brand on Instagram. And then use tools like Pixlee, Yotpo, or Later to automatically collect images/videos and display them on your website.

Mistake: Wrong product description

Before buying anything your customers would do extensive research and after that research, if the product doesn’t look or feel like the description, they will return it and may never come back. 

Solution: Write descriptions that match the product’s qualities and standards. 

For example, Nykaa provides in-depth as well as visually appealing product descriptions that are easy-to-read and understand.

Product Description Example By Nykaa

 

Offer Fast And Easy Returns 

A staggering 92% of shoppers are more likely to make repeat purchases if the returns process is easy. Furthermore, E-commerce businesses can simplify the returns process by enabling customers to initiate returns easily and quickly through a returns portal. 

With a returns portal, customers can access their orders, select the item they wish to return, provide a reason for the return, and select a return method in just a few minutes. This streamlined experience can make customers more inclined to continue shopping with the E-commerce business, ultimately boosting customer loyalty and retention. Also, adding the option to return in-store can also be helpful for people who want to return immediately. 

Collect Customer Feedback

Collecting customer feedback is essential. The reason behind this is that these feedbacks provide you with valuable insights into the customer experience. By understanding why customers are returning products and their overall satisfaction with the returns process, E-commerce businesses can improve their Returns Management policies and procedures. 

Moreover, customer feedback can also help identify common issues that customers may face when returning products. For example, if customers frequently experience delays or issues with return shipping, you can take steps to address these issues and improve the returns process.

How Flipkart collect feedback from customers

Use Data To Decrease The Chances Of Return

Making your marketing and operations team work together can get your brand to touch new heights. 

By leveraging customer feedback and segment data, you can easily identify the following things:

Problematic products:

By checking and analyzing feedback and returns you can easily spot which products are problematic and getting returned the most.

Problematic customers:

Create personalized profiles for high-risk customers by utilizing customer segmentation and feedback. Share this information with your marketing team to help them determine the appropriate customers and products to target. 

When a product with a high return rate is bought or a customer with a history of high returns makes a purchase, send them a targeted email.

Problem with the products that are good but different:

For instance, with the help of user feedback, you know there’s a t-shirt that runs one size smaller than the standard size. Now to handle this, you can mention on that particular brand’s products’ page that the size runs smaller than the usual ones. This small note will help customers determine and order the right size and, in turn, will reduce returns. 

Restock Returned Products To Improve Inventory Flow

The success of a retailer heavily relies on its inventory management. Apparel products, in particular, tend to lose their value quickly over time, which means it is essential to avoid being left with a large amount of unsold merchandise at the end of the season.

This is exactly why effective inventory management and proper reverse logistics are crucial for E-commerce retailers.

About 30% of products sold are returned. Timely grading and restocking returned products are vital as every minute in the warehouse and every touch by a worker increases the cost. Inefficient handling of returns can lead to up to 10% of sales revenue loss. This issue becomes even more significant for multichannel sales, where fully integrated inventory management can make a significant difference. 

Thus, streamlining the returns process improves both customer experience and operational efficiency.

Recapture Costs From Damaged Good

Recapturing costs from damaged goods is the process of recovering the real value of the returned product. In this process, instead of simply rejecting the product, you can try to salvage some value by repairing, repackaging, or reselling the product. By recapturing the costs of the returned product, you can reduce your losses and improve your bottom line. Proper inventory management and reverse logistics processes can help you streamline this process and recapture as much value as possible from damaged goods.

Provide Exceptional Customer Service During Returns

According to a report, a whopping 89% of consumers say that they are more likely to return and make another purchase after positive customer service. 

It’s no secret that customer service is an essential component of brand building. Nearly 3 out of 5 customers report that good customer service is crucial to stay committed to a brand. And if you don’t provide good customer service during returns, they will feel betrayed and may never buy from you again. 

Outsource Your Reverse Logistic Process To ANS Commerce

At ANS Commerce, we specialize in helping E-commerce businesses to optimize their storage and supply management processes. Our services encompass the entire supply chain, from product inwarding to final delivery and even Return Management. By leveraging our expertise and technology, we can help streamline your operations and improve efficiency, ultimately saving you time and money. 

Whether you need assistance with inventory management, warehouse organization, or order fulfillment, our team is dedicated to providing customized solutions that meet your unique needs. Let ANS Commerce be your partner in optimizing your supply chain and taking your business to the next level.

Connect with our E-commerce expert today to see how we can help you grow your business. 

How E-commerce Brands Can Use Merchant of Record And Seller of Record For Global Expansion

The world has become a much smaller place today – a true global village where everyone is a click away. Even E-commerce businesses have joined the party, selling their products across borders to tap into new markets and expand their customer base. But the expansion is not without its own share of hurdles.

Cultural differences, language barriers, currency fluctuations, and regulatory complexities are just a handful of obstacles that they encounter on their way to international success. Such challenges have made global expansion a really slow endeavor. In fact, the share of cross-border sales in total E-commerce sales worldwide has risen only by 7 percentage points between 2016 and 2022.

The easiest way for businesses to counter these issues and experience exponential growth internationally is by partnering with a Merchant of Record (MoR) and a Seller of Record(SoR). Both these entities help you navigate the difficult waters of cross-border trade and achieve success on a global scale. In this post, we will take a look at both these concepts along with their key differences. 

What is a Merchant of Record?

A Merchant of Record (MoR) is a service provider that acts as a legal entity responsible for selling goods to end customers. It takes care of the financial and legal aspects of your business, including processing payments, managing taxes, and handling compliance. The primary goal of an MoR is to enable businesses to sell internationally without worrying about local laws and regulations. An MoR does not assume the identity of the business selling the goods and will always be identified separately as a third party.  

How does the Merchant of Record model work?

What is merchant of record

When the end customer buys from your E-commerce store, they are officially buying it from your MoR partner. They are the legal seller of your product in the country of your customer but do not hold any inventory. In this model, the service provider becomes the only buyer of your goods in that country. 

Once the MoR partner receives the order notification, they buy the product(s) and resell it to the customer. They take care of the international payments and taxes, and your customers do not have to worry about foreign exchange fees as they are paying a local business in local currency. 

Key responsibilities

  1. They are responsible for securely processing customer payments, including managing payment gateways and processing credit cards in accordance with applicable laws and regulations.
  2. They are responsible for calculating, collecting, and remitting taxes related to daily online transactions.
  3. They are responsible for implementing protective measures against fraudulent activities 
  4. They are responsible for generating and maintaining accurate financial reports.
  5. They are responsible for managing relationships with payment service providers, financial institutions, and other stakeholders involved in the transaction process. 

What is Seller of Record?

A Seller of Record is another legal entity that is entirely responsible for selling and delivering goods to your customers. Unlike MoRs, who never own the products( and the inventory) (in the customers’ eyes), the SoRs can be the owners and even responsible for fulfilling customer orders, provided you authorize them. The main goal of a Seller of Record (SoR) is to handle the entire lifecycle of a sale so that the business can concentrate on more mission-critical activities.

How does a Seller of Record model works?

What is seller of record

You give the SoR the legal right to sell your goods under their name, making them the original seller of your products in front of the customers. When a customer purchases the product, the SoR handles the sales transaction, including processing payments, issuing invoices, and collecting customer information. They also become the primary point of contact for customers regarding purchases.

The SoR works in a revenue-sharing model, where you receive a percentage of the sales revenue, while the SoR retains a percentage as compensation for their services.

Key responsibilities

  • They are responsible for managing orders and fulfilling them. It may include anything from inventory management to shipping and delivery.
  • They are responsible for the quality management and the performance of the products being sold.
  • They are responsible for providing customer support related to products, orders, returns and refunds, etc.
  • They are responsible for price management, including setting prices, managing discounts and promotions, etc. 
  • They are responsible for maintaining accurate records of sales transactions, financial transactions, and customer data

Difference between Merchant of Record, Seller of Record, and Payment Service Provider

ParameterMerchant of RecordSeller of RecordPayment Service Provider
Core ResponsibilityActs as a merchant and is responsible for payment processing, compliance, and financial and legal liability.Acts as the seller of the products and is responsible for day-to-day operations and customer support.Provides payment processing services, but does not take on merchant or seller responsibilities.
Legal LiabilityAssumes legal liability for processing payments, managing refunds, and handling chargebacks.Assumes legal liability for products sold.Does not assume legal liability for payment processing or product sold.
Customer RelationshipManages the customer relationship, including customer communication, support, and issue resolution related to payments.Manages the customer relationship, including product inquiries, returns, and refunds, .Typically does not manage the customer relationship related to payments, as it is primarily focused on payment processing.
Fraud ManagementResponsible for monitoring and preventing fraudulent activities related to financial transactions.Not responsible for fraud management. Not responsible for fraud management. 

Benefits of using a Seller and Merchant of Record services

Using a Seller of Record and Merchant of Record service can offer several benefits for businesses, especially in the E-commerce space. Some of the key benefits include:

  1. Access to legal expertise

Both the SoR and MoR service providers are well-versed in navigating the complex landscape. They can offer their expertise in different areas like taxation, consumer protection, and data privacy laws. Through them, you will ensure that the sales transactions are always conducted in compliance with applicable laws, reducing the risk of penalties.

  1. Global expansion

SoR and MoR enable you to enter new markets without having to handle the intricacies of international sales, including local taxes and customs duties. You can focus on your core competencies, such as product development and marketing, while leaving everything else to the SoR and MoR service provider.

  1. Improved customer experience

The SoR and MoR service providers have extensive knowledge about the pulse of the local customers and can offer better customer service to your end customers in that country. This rapport is necessary to build a positive customer experience and trust with customers, as they have a single point of contact who knows their needs better. 

  1. Lower operational cost

SoR and MoRs can significantly reduce operational costs by eliminating the need to hire, train, and manage staff for handling day-to-day tasks such as order processing, payment collection, and customer support. Also, you need not invest in software licenses, hardware, infrastructure and other operational resources. 

  1. Faster execution

When you partner with an MoR or a SoR, you get a lean and agile team solely focused on managing the operational aspects of your business. They can efficiently handle different tasks by using their expertise. They can also adapt to changing market conditions and scale your operations up or down swiftly, providing you the capability to respond quickly to market demands.

Factors To Consider While Partnering with a Global Merchant and Seller of Record for E-commerce Expansion

Partnering with an MoR or an SoR for global expansion can be a strategic decision, and one needs to consider several factors before finalizing such a partnership. Here are some key factors to keep in mind:

  1. Reputation

Evaluate the reputation and experience of the MoR or the SoR service provider. Look into those companies with a proven track record in handling international E-commerce transactions. Research their credentials and go through the reviews on different platforms to ensure they are reliable and trustworthy.

  1. Knowledge of Local Laws & Regulations

Ensure that the provider you choose can process payments in the countries where you plan to expand your E-commerce operations. Also, verify if they understand the local laws and regulations in all those countries, including tax requirements, data protection, and consumer rights. It is also important that they have a good understanding of the customer base, so that you can start tapping into the local market right away. 

  1. Pricing and Fees

Understand the pricing structure and fees charged by the SoR and MoR providers for their services. Compare them with other providers in the market to ensure they offer competitive pricing. Consider factors such as setup fees, transaction fees, currency conversion fees, and any other additional charges that may apply.

How much do Merchant and Seller of Record services cost?

The cost of MoR and SoR services can vary based on multiple factors, including the volume of transactions, the planned location of your business, the expertise of the provider, and so on. Also, there are several components in the fee structure of a Seller of Record and Merchant of Record provider that can determine the final cost. Here are some of the parameters – 

  1. Service fees: This is usually a percentage of the transaction value or a flat fee per transaction. This is the main cost you incur for partnering with an MoR and SoR for outsourcing various agreed functionalities of your business. 
  2. Set-up fees: This fee is usually charged while onboarding a new seller. For the MoR and SoR, it will cover initial setup costs, such as integrating with payment gateways, configuring tax settings, and other technical setup tasks if any.
  3. Additional fees: There may be certain additional fees for optional services, such as chargeback management, currency conversion, and custom reporting. 

Expand Your Footprint in India with ANS Commerce By Your Side 

ANS Commerce is a leading E-commerce growth accelerator that offers comprehensive solutions to businesses looking to expand their online presence in India. With a deep understanding of the Indian market and a wide range of services, we are the go-to partner for many international businesses looking to establish a strong foothold in India. 

From setting up online stores, E-commerce marketplace management to ROI-driven performance marketing services and managing logistics and order fulfillment, we take care of everything related to your everyday operations so that you can focus on other strategic activities and capitalize on the booming E-commerce market in the country.

To know more about how ANS Commerce can help you expand your business in India, book a 1:1 consultation with our E-commerce experts

How To Calculate E-commerce Return Rate?

As an E-commerce seller, no one better than you know the importance of keeping an eye on various business metrics. After all, these metrics offer you a treasure trove of insights that will help improve customer satisfaction, product performance, and overall business health. One such key metric that holds immense significance for your business is the Return Rate. Calculating and analyzing it correctly is an essential step in making informed logistics-related decisions. In this post, we will dive into the ins and outs of E-commerce Return Rate calculation, including why it matters, how to measure it accurately, and how to optimize it. So, grab your calculators, and let’s get started.

What Is The E-commerce Return Rate?

The E-commerce Return Rate is a metric that measures the percentage of online purchases returned by customers. In other words, it highlights the frequency at which customers return the products for various reasons. This value can be used to evaluate the effectiveness of your online store’s customer service, product quality, and overall user experience. A high Return Rate indicates customer dissatisfaction or issues with the quality of your products.

How Do You Calculate Your E-commerce Return Rate?

Let us learn how to calculate your online store’s e-commerce rate, along with a simple example to illustrate the same. 

Return Rate

The return rate can be calculated by dividing the total amount of products returned by the total amount of products sold in a particular period. Its formula is given by –  

E-Commerce Return Rate = (Products Returned/Products Sold) X 100

For instance, if you sold 10,000 products in 1 year while 2000 units were returned, your Return Rate would be: 2000 / 10,000 x 100 = 20%

As you can see in this example, 20% of the products sold in this timeframe were returned. However, this value doesn’t answer why the products are getting returned or how the return process is taking place. Put simply, the Return Rate doesn’t highlight how many of those returns could have been avoided with a simple solution and how many of those returns were actually ‘exchanges’. And that’s why it is important to measure the refund rate and exchange rate of your online store.

Refund rate

As the name suggests, the Refund Rate is the total number of refunds given for the total number of returns in a given period. Its formula is given by – 

E-Commerce Refund Rate = (Refunds Given/Products Returned) X 100

In the same example, if the number of refunds given was 500, then the refund rate would be:

500 / 2000 x 100 = 25%

Many people use Refund Rate and Return Rate interchangeably, which is wrong! As you can see, they are two different metrics representing two different aspects of your E-commerce business.

So what does a Refund Rate indicate about your business? Let us answer this with another example. Imagine you are an online fashion retailer. A customer buys a shirt but returns it due to an incorrect size. They end up exchanging the shirt for another one in the right size. As you can see here, even though this order resulted in a return, it didn’t result in a refund. In other words, it did not create a loss of revenue for your business. 

However, if the customer wanted a refund strictly, it could lead to revenue loss and indicate other issues with the product or your business, such as late delivery, poor product quality, defective product, product not matching the description, etc. All these are serious issues that can also result in loss of customers and loss of reputation. So keep a close eye on your Refund Rate along with your Return Rate. 

Exchange Rate

This is another metric you must measure, along with the Return Rate and Refund Rate, for improved visibility into your returns operations. It is the total number of exchanges made for the total number of returned orders in a given period. Its formula is given by – 

E-Commerce Exchange Rate = (Exchanges Done/Products Returned) X 100

Going back to the same example, if the number of exchanges done was 1000, then the exchange rate would be: 1000 / 2000 x 100 = 50%

After selling, the next best thing for an E-commerce business is exchange. Why? Because it will not result in a loss of revenue (apart from the minor shipping costs). Sometimes, it can even result in an upsell. 

Your exchange rate should always be higher than the refund rate, as it indicates that your brand has been successful in convincing customers to once again try your brand’s product despite not being happy with the original process. It can also indicate that your organization has a seamless exchange process, adding to improved customer experience and brand loyalty. 

What Is The Average E-commerce Return Rate In India? 

E-commerce has seen tremendous growth in India in recent years, with many consumers turning to online shopping due to convenience and accessibility. At the same time, the Return Rates have surged in many categories. But before we look into the different categories where returns are maximum, let us look at the average Return Rates in different channels. 

Average Return Rate Across Selling Channels

  • The average Return Rate in E-commerce stores in India is around 30%
  • E-commerce Return Rates in India can shoot up to 40% during the festive time
  • The Return Rate is only 10% in brick-and-mortar stores in India. 

E-commerce Return Rates by product category

Returns are inevitable in every industry. However, some industries are disproportionately affected. These industries feature products that are highly subjective when it comes to fit and style expectations. Unsurprisingly, clothing, bags, shoes, and accessories take the top spot in the list of most returned online purchases by Indian customers. A staggering 49% of Indian online customers returned clothing, while 39% of customers returned bags and accessories. Only 22% of customers said that they did not return anything back to the online store. 

Most returned online purchases by category in India

What Are The Common Reasons For Product Return?

Product returns are a common challenge in the world of E-commerce, and there are various reasons why customers may choose to return a purchased product. Here are the most obvious ones:

  1. Defective Products: Customers may return products that are damaged, broken, or have missing parts. In most cases, the product gets damaged during shipping due to poor handling and bad packaging. 
  2. Size, Fit, or Color Issues: Customers may return products that do not fit them properly. This is a common return reason in the clothing and footwear categories. Color discrepancies between the received product and product image can also lead to returns.
  3. Buyer’s Remorse: Customers may return products if they change their minds after making a purchase. This is quite common among impulse purchases. Once received, customers realize they do not actually want the product.
  4. Performance Issues: Customers may return products if they experience issues with the quality or performance of the product. It could be malfunctioning electronics, poor durability, or other product-related problems.
  5. Negative after-purchase experience: Customers may return products if they experience poor customer service, unresponsive or unhelpful sellers, or any other negative experience after placing the order. 
  6. Delayed delivery: Customers may return products if the order is delivered after the promised delivery date. Delayed deliveries can lead to frustration, disappointment, and inconvenience, prompting them to return the products. 
  7. Better Pricing from the competition: If the customers can find the same product at a lower price on some other site, they may return the product they purchased from your site. Make sure you are providing a competitive price on your website. 

What Is The Impact Of A High Return Rate?

When your Return Rates soar, it can have far-reaching repercussions on your business, ranging from financial losses to operational difficulties. Let us explore some of the consequences of a high Return Rate in the E-commerce space – 

  1. Impact on finances 

Whenever your customers return products, it results in unwanted costs associated with processing returns. Besides refunding customers’ payments, you may have to bear the shipping charges to return the product to the origin. Also, in most circumstances, the returned products may not be in a resalable condition. This can result in further loss of their original value. In summary, high Return Rates can cause a dent in an E-commerce store’s profitability and cash flow.

  1. Impact on operations

Processing returns is not easy. It is a time-consuming and resource-intensive process. You will require additional labor to manage inventory and logistics. Returns can also disrupt your regular inventory management process. Returned products have to be restocked, refurbished (or disposed of), and sold again. High Return Rates can also lead to excess inventory of returned products, locking your capital and warehouse space. 

  1. Impact on customer loyalty

High Return Rates can affect customer satisfaction and loyalty, which will ultimately lead to reduced customer lifetime value. Returns are inconvenient and time-consuming for customers. If they feel like they are constantly returning products, it can negatively impact their overall satisfaction with your brand. Dissatisfied customers are less likely to be loyal and may switch to competitors who offer better quality products and a better experience. 

  1. Impact on reputation

High Return Rates can also negatively impact the reputation of your E-commerce business. Customers who experience repeated returns will convey their frustration in the form of negative reviews. When potential customers go through these reviews, they will view them as a sign of poor product quality, inaccurate product descriptions, or inadequate customer service, all of which can result in a loss of trust and credibility for your brand. 

  1. Impact on environment

Returns can result in additional transportation, packaging waste, and potential product waste if returned items cannot be resold. This can lead to environmental concerns, such as increased carbon emissions and higher waste generation, both of which may affect your business’s sustainability and CSR efforts.

Ways To Reduce The E-commerce Return Rate 

With online shopping becoming the norm, the rate of product returns has drastically increased these days. However, certain proactive measures can be taken to tackle this issue head-on. Here are they:

  1. Provide detailed information

About 23% of returns are due to inaccurate or misleading depictions of the product. Provide detailed specifications and high-quality images for every product so that there are no last-minute surprises. This will drastically reduce the likelihood of returns due to product-related issues. Similarly, to avoid sizing-related returns, provide an easy-to-read size chart for every product. If possible, offer fit recommendations so that customers always pick products in the right size. 

  1. Have a clear and transparent return policy

Around 67% of customers check the returns page before making a purchase. So you must have an easy-to-comprehend return policy for your E-commerce business. It should provide all the crucial information, such as how to initiate a return, possible timelines, and any associated fees or restrictions. A transparent and clear return policy builds trust with your customers and helps set realistic expectations when it comes to product returns.

  1. Perform thorough quality control and inspection

When you implement robust quality control measures in your E-commerce store, it will automatically reduce the number of defective or damaged products being shipped to end customers. If you have the budget, hire a separate team that will thoroughly inspect products   and identify any issues before it reaches the hands of the customers. 

  1. Improve your packaging

Proper packaging is essential to protect your products from damage during transit. So invest in high-quality packaging materials that are appropriate for the type of products being shipped. Also, ensure that products are packaged securely without leaving too much space in between to minimize the risk of damage due to movement.

  1. Offer Excellent Customer Service

Prompt and responsive customer service can help address customer concerns related to products, which will reduce the need for returns. You can provide multiple channels for customer inquiries, such as live chat, email, or phone. You can also leverage technology to provide personalized product recommendations based on customers’ preferences and past purchase history. It will help customers choose the right product for their needs and reduce the likelihood of returns. Also, provide clear usage instructions so that customers use the product the right way, reducing dissatisfaction. 

  1. Analyze Return Data

Continuously analyze return data so you will get valuable insights into return patterns or trends, identifying areas for improvement. Focus mainly on return reasons, product categories with high Return Rates, and common issues faced by customers. This will help you take corrective measures before they start affecting your reputation. 

E-commerce Returns Best Practices To Follow 

By implementing certain best practices, you can effectively address various challenges related to returns, leading to streamlined operations. Here are four such best practices – 

Offer brick-and-mortar returns

Did you know that around 62% of customers are more likely to shop online if they can return an item in-store? So if you own a brick-and-mortar store along with your E-commerce business, offer customers the option to return products in-store. This will be a convenient and hassle-free solution for customers who prefer to return products in person rather than dealing with the hassle of return shipping and repackaging. This strategy can also turn a return into an exchange or an upsell opportunity when the customer sees other products in the store.

Take customer feedback on the reason for the return 

When you understand the reasons behind product returns, you will be able to address the root causes and implement preventive measures. This is possible only if you encourage customers to provide feedback on the reason for their return. You can use channels like online surveys, email follow-ups, or service calls to collect feedback. 

Use returns management software to assist with exchanges

By using returns management software, you can streamline the entire returns process, making it seamless both for your team and your customers. Returns management software can also facilitate exchanges and allow customers to request a replacement or an alternative product easily. This will reduce the need for a return altogether and reduce revenue losses. 

Partner with a 3rd party logistics company experienced in reverse logistics 

3PLs experienced in handling E-commerce returns can efficiently manage the entire returns process, letting you focus on other critical aspects of the business. They can take care of everything from receiving returned items to inspecting, restocking, or disposing of products. You will save time, effort, and resources while ensuring that returns are handled in a timely and professional manner.

As warehousing and order fulfillment partner for E-commerce brands in India, we offer extensive support for reverse logistics. With years of hands-on experience, we fully comprehend the intricate complexities and challenges associated with handling returns. We receive, re-label and pack products with better QC standards and handle refurbishment across different categories. 

To know more about ANS Commerce, book a demo now

How Return to Origin (RTO) Is Impacting Profitability of E-commerce Businesses

E-commerce is the new normal for buyers and sellers, with countless businesses diving in amid the pandemic. Even major brick-and-mortar brands joined the bandwagon. While they did it as a survival response in the first place, the decision emerged as a game-changer for all the brands. 

Most businesses want to continue with it for the long haul. And statistics show that growth is imperative. E-commerce sales are projected to grow 10.4% in 2023, and the market size is expected to reach a whopping $6.3 trillion this year. That spells a huge opportunity for retail and D2C brands.

While everything about the industry sounds great, it has a fair share of challenges as well. Of course, competition is the one player, one needs to worry about the most. But that’s only the tip of the iceberg because there are a lot more things to stress about. 

Returns are one of them- in fact, Return to Origin (RTO) is a major headache as it can seriously eat into a seller’s profits. Research shows that E-commerce businesses lose over $400 billion in sales every year due to product returns. Nonetheless, having a strategy to deal with RTO can help business owners survive and thrive in the unpredictable landscape. 

Let us share a comprehensive guide on return to origin in E-commerce, its potential impact on businesses, and a strategic approach to get through. 

What is Return to Origin (RTO)

RTO, or Return to Origin, is a term used in E-commerce to describe the return of a package to the seller when it cannot be delivered to the customer for any reason. This can occur if the delivery attempt fails or if the customer refuses to accept the package. As a result, the package is marked as RTO and sent back to the seller.

Unfortunately, sellers must bear the cost of both forward and reverse logistics in such cases, which can be a significant financial burden. In fact, returns and exchanges can account for up to 50% of an E-commerce retailer’s revenue.

How to calculate RTO?

To calculate the RTO for your business, use the RTO rate formula below:

RTO rate = (Orders not delivered + Orders cancelled before delivery) / Total number of orders

The RTO rate represents the percentage of orders that were not successfully delivered. This is an essential metric to track as it indicates the efficiency of your shipping process. A lower RTO rate is desirable as it implies that products can be shipped faster and more reliably.

How RTO impacts business profitability despite high order volume? 

Research indicates that returns make up a daunting 30%+ of E-commerce shipping. It means a seller can expect one-fifth of their D2C orders to return. Even worse, it can affect a business’s bottom line due to the cost associated with shipping and managing inventory. Here are some potential pain points caused by the return to origin-

  1. Cost of forward and reverse logistics

The most evident reason to worry is the cost of forward and reverse logistics. The seller ends up paying for shipping the item initially (if they offer free shipping) and repeating it when it gets shipped back to them. That’s double the sum. They also pay operational costs in order processing, such as the cost of packaging, quality testing, and labor. These can add up to a significant sum that is enough to erode the profit margins. 

  1. Cost of managing damaged products

Some products returned by customers may be damaged or in a condition that makes them unsellable. In such cases, E-commerce companies have to bear the cost of managing these products, which may include repairing or disposing of them.

  1. Cost of repackaging and quality checks

When the seller gets another order for a return to origin product, they have to repeat the entire order processing schedule, from repackaging to quality checks and getting in touch with logistics. 

  1. Cost of blocked inventory

When a product is returned, it takes up space in the warehouse, blocking inventory that could have been sold. This space comes at a cost, as the E-commerce company has to pay for warehousing storage.

  1. Loss of marketplace commission

The loss compounds if one sells through marketplace. Depending on the marketplace a seller collaborates with, they may not get a refund for sales commission even if the order does not get through. On top of that, most marketplaces charge an additional fee for a return to origin. 

When these costs are added up, they can have a massive impact on the business’s profitability. And it worsens because of the sheer number of RTOs they encounter. Consider how much you can lose when one in five orders returns to the origin. 

What are the top reasons for Return to origin?

Return to origin in E-commerce is a part of the deal for D2C sellers because several reasons may lead to a return to origin. But it is vital to identify them so that you can reduce the possibility and implications of E-commerce returns. Here are the reasons for RTO:

  1. Incorrect user information

When a customer adds inaccurate information such as an incorrect address, phone number, and email, they are eventually set up for a return to origin situation. If the delivery person tries to reach such customers, they are unreachable. There is no option other than returning the product to the warehouse and marking the customer as an invalid user. Besides incorrect details, ambiguous information and spelling errors may also cause problems. Missing out on zip codes is one of the common instances. As a seller, verifying and confirming customer information before shipping the package is important to avoid any errors and reduce the risk of RTO. 

  1. Unavailability of customers

Another common reason for E-commerce product return is the unavailability of a customer to receive it. The logistics partner usually makes multiple delivery attempts before marking it for return-to-origin. Keeping customers in the loop by sending real-time tracking information or giving them a phone call before delivery can prevent RTO due to the non-availability of customers. 

  1. Lack of customer intent

Surprisingly, a buyer who orders a product online may end up rejecting or returning it because of a lack of intent. The reasons may vary, from a change of mind at the last moment, getting the same item at a lower price or earlier from another seller, not requiring the product any more, and more. Whatever the reason, a seller cannot force them to accept the order, even if it sounds right. 

  1. Delivery of damaged or wrong products 

Delivery of damaged or wrong products is another reason for return to origin. Damaged items can result from mishandling during shipping, while wrong products may be due to errors in order fulfillment. When customers receive damaged or incorrect products, they may return the item rather than keep it. If this happens, check with customers if they would like an exchange or store credits for the return. 

  1. COD payment is not ready

At times, the reason for RTO could be as simple as the recipient not having the cash payment to honor a COD order. They will probably ask the delivery person to ship it back to the seller. 

Another reason COD orders are prone to RTO is that customers may change their minds or have second thoughts about their purchase while waiting for the order to arrive. Since they have yet to pay for the item, it may be easier for them to cancel the order or return it. 

E-commerce merchants need to be aware of these risks and possibilities and take proactive measures to address them. Fortunately, it is possible to address most of them and protect the business and profits in the long run. 

Ways to reduce the return to the origin

While retailers cannot curb return to origin altogether, there are ways to minimize them. We have a list of actionable measures to limit returns at all stages of the conversion funnel. Here are some ways you can use to reduce RTO: 

During pre-sales

D2C business owners can start with an RTO-minimization strategy as early as the pre-sales stage when it comes to managing returns. Here are the steps you  can take: 

Improve product quality

Poor product quality is detrimental for retail and D2C players, specifically in a competitive E-commerce landscape. Even if customers place orders, they will likely return them eventually if there are quality issues like incorrect sizing. Therefore, sellers need to analyze the potential causes of a high Return to Origin rate of specific products and work on improving them. One of the actions that they can take is size standardization, which can help reduce RTO drastically, besides bolstering their reputation in the long run.

Go the extra mile with product showcasing

Product showcasing is a key challenge for E-commerce sellers. It is unrealistic to expect buyers to click on a whim when they cannot see, feel, and experience the offering. But going the extra mile with showcasing does help. Providing detailed information about products can help customers make informed purchase decisions. Include product descriptions, specifications, and high-quality images and videos to give customers a clear idea of what they are buying.

Offer surprise gifts and freebies

Adding freebies, discount coupons, and gifts to an order is a surefire way to reduce the chance of returns. Plus, one gets loyal customers willing to stay and recommend the brand by word of mouth. That’s a win-win! 

Incentivize pre-paid orders

COD is one of the primary drivers leading to return to origin. After all, it seems much safer to return an order when one hasn’t paid for it. As a seller, one can address the risk by incentivizing customers with cashback or discounts for pre-paid orders. It is possible to dissuade them from choosing the COD payment method by asking for a small fee. 

Relook at return policy clause

It’s no secret that many E-commerce companies offer friendly return policies, which allow shoppers to buy items, try them out, and return them if they don’t meet their expectations. While such policies can undoubtedly increase conversions, they can also lead to an uptick in returns. To prevent customers from exploiting loopholes, it’s crucial to ensure your return policy is ironclad.

Reevaluate your E-commerce return policy to clearly include these aspects: 

  • The time frame for returns
  • Acceptable reasons for returns
  • The condition of the product upon return
  • The refund or exchange process, and 
  • Any associated fees or shipping costs. 

By taking these factors into account, you can help ensure that your return policy benefits both your customers and your business.

During order processing

Besides acting early, sellers can also lower the return to origin risk during the order processing stage. Here are a few steps to implement in this context:

Keep a close eye on high-risk orders

Not all E-commerce orders are the same. Some are at high risk of return to origin, so sellers must keep an eye on them. Risk management should be an integral part of order fulfillment operations. Checking the customer’s past purchase history is a viable way to confirm whether they return the ordered products. A seller needs to worry if they are notorious for returning COD orders. The best bet is to re-confirm the order via call, email, or IVR before shipping it. 

Use technology and verify shoppers’ information

The inability to locate the delivery address of customers is one of the most common reasons for a return to origin. Incomplete/invalid/non-deliverable addresses can be problematic. Fortunately, it is possible to resolve the issue by leveraging technology. There are software tools to ensure that an address has been keyed in correctly and completely. They even give an apt error message to prompt the buyer to complete the address. 

In addition to software tools that verify and complete addresses, E-commerce merchants can also leverage faster checkout and RTO reduction automation tools to reduce return rates. Additionally, using AI-powered predictive platforms can help identify potential defaulters at the onset, reducing the likelihood of returns. 

Partner with a reliable 3PL service provider

3PL collaboration can be a game-changer for an E-commerce business as these providers help with the entire shipment process, including picking, packing, and shipping. Their expertise in managing the shipment process ensures that orders are shipped to the correct destination on time. This reduces the chances of products being returned due to incorrect or delayed deliveries. 

They also take care of the returns, so partnering with a reliable one can minimize the return to origin-related hassles.

Provide fast shipping

Fast shipping and delivery experience is another measure to reduce the chances of returns. Online shoppers are impatient lot, so they end up buying a product from a brick-and-mortar store if the delivery date sounds too distant. In such cases, returning the product is the obvious repercussion. Brands can address the possibility by providing super-fast delivery services to minimize waiting time and frustration. 

Post-sales

A proactive approach to return to origin minimization also includes the post-sales phase. D2C sellers cannot afford to get complacent at any stage when it comes to E-commerce sales. These measures are effective for dealing with the risk of E-commerce returns post-sales:

Focus on NDR management

Non-delivery reports (NDR) offer visibility into the order journey and the potential reasons for returns. They are critical for sellers looking to resolve and limit the return to origin rates for the long haul. For example, if a seller can see the delivery person citing customer unavailability as the cause of non-delivery, they should contact the customer to confirm their availability and ensure delivery.  Focusing on NDR management can take the E-commerce game a notch higher.

Collect customer feedback

Listening to the customers is the key to success for a business. Customer feedback offers insights into what’s working for business and what needs to be improved. Including it in the post-sales process can help a business owner to get actionable insights into their product and logistics customer service. They should also implement measures to improve things to avoid a return to origin for future orders. Acting on customer feedback does more than resolve the issue, but also strengthens the relationship with buyers and boosts retention. 

Don’t let return reduce your profit margins

In conclusion, it is important to consider the impact of returns on their profit margins. While returns are inevitable, they can eat into profits if not managed properly. Implementing a well-designed return policy, tracking returns data and analyzing it can help businesses reduce the cost of returns and increase their overall profitability.

ANS commerce, a leading full-stack E-commerce service provider, offers a suite of services and tools to help you manage your E-commerce returns effectively. With ANS commerce, you can gain insights into return patterns, and implement strategies to minimize the cost of returns. Our streamlined return process and data-driven approach to order fulfillment can help you increase your profitability and achieve sustainable growth in the competitive E-commerce landscape. With the help of our expert team, you can focus on growing your sales and expanding your customer base while leaving the management of returns to us. 

To know more about how ANS Commerce can help you, Book a free consultation with our E-commerce experts today!

How To Write Best-in-Class E-commerce Return Policy For Your Store

With the increasing popularity of online shopping, competition amongst E-commerce businesses has become more intense, as customers have endless options to choose from. While offering unique products is important for gaining customers, a clear and customer-friendly E-commerce return policy plays an equally crucial role. 

According to reports, customers are three times more likely to NEVER purchase from a company, if they are unsatisfied with the return policy. Therefore, drafting a well-crafted return policy becomes even more important to improve customer satisfaction, boost sales, and establish trust.

However, creating a best-in-class E-commerce return policy can be a challenging task that requires careful consideration of various factors such as product types, logistics, and budget.

In this blog, we’ll explore the key elements of a successful E-commerce return policy and discuss about tips for creating a policy that meets both the customer’s and the business’s needs. 

But before delving into those details, let’s first understand the meaning and importance of an E-commerce return policy.

What Is An E-commerce Return Policy?

An E-commerce return policy is a document that outlines the process and requirements for accepting returns from customers. This policy serves two important purposes:

Firstly, from a business perspective, it helps to protect against inappropriate returns and financial loss caused by credit card chargebacks.

Secondly, from a customer perspective, it provides information on the merchandise that can be returned, the reason for return, the time frame for returns, and the process for initiating a return. By understanding these details, customers can make informed purchase decisions and have confidence in the reliability of the business.

Here is an example of a return policy from Flipkart.

Return policy example from Flipkart

This comprehensive return policy provides customers with information about the return process, including the timeframe for returns and processing times. Additionally, it goes a step further by outlining common scenarios that may occur, helping customers understand whether a product is eligible for return or not.

Why Is An E-commerce Return Policy Important?

Are you wondering why you need an E-commerce return policy? Here are some points that will convince you.

Instills a feeling of security

In the world of online shopping, customers seek security in their purchases. They expect E-commerce businesses to offer a certain return timeframe, which not only indicates confidence in the product but also provides a safety net in case of any issues. This helps customers feel secure in their purchasing decisions and enhances their overall shopping experience.

Creates clarity

A well-crafted E-commerce return policy can save you the hassle of communicating return expectations to each customer individually. Customers know exactly what to expect and can initiate the process easily when the policy has clearly outlined the items eligible for returns and the corresponding timeframe. This not only improves customer satisfaction but also saves time, as you don’t have to answer repetitive return queries from customers.

Grows retention rates

Research shows that 92% of customers buy again from the same E-commerce company if the return process is hassle-free. You can create a positive shopping experience for customers, and encourage them to return to their store in the future by making the return process easy. This not only promotes customer loyalty but also helps increase your revenue by driving repeat sales.

Improves trust

Unlike in-store customers who can physically touch and examine products, online customers rely solely on product descriptions and images. It may not provide a comprehensive understanding of the product’s features and quality. As a result, customers may be dissatisfied with their purchase once it arrives at their doorstep. However, a well-crafted return policy that offers customers the option to return or exchange the product can help you with repeat sales and long-term customer relationships.

A well-crafted E-commerce return policy can help your business meet customer expectations and facilitate the purchasing decision process. 

You can remove the hassle associated with product returns by providing clear guidelines for returns and exchanges—establishing your business as a customer-centric organization. 

An E-commerce return policy can ultimately help businesses stand out in the competitive market and attract and retain customers in the long term.

Now, let’s get down to writing a great E-commerce return policy. 

What To Include In Your Return And Refund Policy

To ensure customers understand the boundaries surrounding returns, an elaborate E-commerce return policy must cover specific key points. These include the types of returns that will be accepted by the business and the refund process that will be followed. By clearly communicating these details, businesses can minimize confusion and dissatisfaction among customers, and establish a clear protocol for handling returns.

Here are a few points that should be included in your E-commerce return and refund policy:

Identify the items eligible for return

It is essential to identify which products are eligible for returns and which are not, especially if you sell perishable goods that may not be suitable for resale once they are returned. 

It is important to clearly state the types of items that are eligible for return or exchange in your E-commerce return policy to avoid confusion and manage customer expectations. By doing so, you can ensure that customers know exactly what they can and cannot return, which can reduce frustration and improve customer satisfaction.

Determine a clear timeframe for accepting returns

It’s crucial to define a specific time frame for returns in your E-commerce return policy, as customers need to know how long they have to initiate a return. The duration can vary widely, ranging from a week to a year or even longer, depending on the business’s policies. However, the standard timeframe for many businesses is 30 days, which is also the expectation of most customers.

If you fail to disclose a timeframe, you can have customers requesting returns even after years of the purchase. Yes, we are not joking. To avoid this scenario, it’s important to have clear and stricter rules in place to protect your business against open-ended return periods.

Describe the acceptable condition of the returned products to be accepted

It is crucial for an E-commerce return policy to clearly outline the condition in which a product must be returned for it to be processed. This includes detailing requirements such as original packaging, attached tags, and unworn clothing. It is equally important to state that returns that do not meet these requirements will not be accepted.

Failing to specify acceptable return conditions in your policy may result in customers returning products in poor condition, making it impossible for you to resell them and causing financial loss to your business. Therefore, a clear and concise outline of acceptable return conditions in your E-commerce return policy is essential.

Choose in-store credit or a refund

When customers initiate a return, they want to know how they will receive compensation for their purchase. Typically, there are two options for an E-commerce refund policy: in-store credit or a full refund. While some customers may prefer in-store credit, others will demand a full refund. Ultimately, the decision on what type of compensation to offer falls on the business. But it needs to be mentioned clearly in your E-commerce return policy. 

We recommend offering a full refund if the returned item meets all the requirements. Some E-commerce companies give customers the choice between two options. However, if you choose to only offer an in-store credit, it can be used to enhance your return process if done strategically. But be aware that this approach may lead to dissatisfaction among some customers.

Disclose any fees associated with returns

Your E-commerce return policy should specify who is responsible for the shipping, restocking, and other fees associated with returning a product. It is important to be transparent about this information to avoid any confusion or frustration on the part of the customer.

If you expect the customer to bear these costs, make sure to clearly state this in your return policy. Customers can become disgruntled if they are not aware of these fees ahead of time, so it is important to be upfront about them.

E-commerce Return Policy Template

You’re now equipped with all the necessary information and guidelines needed to create an effective E-commerce return policy. However, it can still be challenging to write a policy from scratch. Here’s a free E-commerce return policy template that you can use. This policy template is designed to cover all the essential elements needed to be included in an E-commerce return policy. 

Just simply replace the text with your policy or use it as a guideline to create a policy from scratch tailored to your business needs.

Sample Ecommerce Return Policy Template 

We hope that this E-commerce return policy example not only helps you create an effective policy in a short span of time but also sets you apart from your competitors. Remember, a clear and customer-friendly policy goes a long way in building trust with your customers, eventually increasing sales and revenue for your business.

E-commerce Returns: Best Practices To Follow

You followed all the tips and tricks mentioned above and created a customer-friendly E-commerce return policy, but your return workload is still high. Now what do you do?

Here are some best practices you can follow in your E-commerce returns to ensure a hassle-free process. 

  1. Your E-commerce returns policy should be easy to find

The importance of making your E-commerce return policy visible to customers cannot be overstated. It is crucial for the success of your return process. 

To achieve this, ensure that your return policy is prominently featured on the homepage of your website. The footer section is a popular spot for this. You can also consider including it in other areas such as the checkout page, FAQ pages, and product pages.

Another effective way to make your E-commerce return policy visible is by printing a copy and including it with every shipped product. Additionally, you can attach it or send a link in order confirmation emails sent to your customers after a purchase is made.

  1. Create concise steps for the buyer to follow

To prevent confusion among your customers, the policy should provide clear and concise instructions on the return process. You can create a dedicated section on your website or app for the return process, or you can direct customers to contact your helpline number for assistance.

Regardless of the method chosen, the guide should include all steps involved in returning the product, such as how to pack, label, and ship the items back to your store.

  1. Make return labels easy to print

Making return labels easy to print is an important aspect of a customer-friendly E-commerce return policy. Customers should be able to easily access and print their return labels without any technical difficulties. 

Providing a clear and simple set of instructions on how to print the labels can save customers’ time and frustration, and can also streamline the return process for businesses. Additionally, including the return label in the original packaging or sending it via email can make it even easier for customers to print and use.

  1. Understand the laws governing returns

The laws that govern returns can vary from one country to the other. 

In India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods.

But in the United States, there is no legal requirement for a return policy. However, some states in the country require you to disclose it in the checkout process. 

On the other hand, there are other countries that legally require E-commerce companies to refund, repair or exchange faulty products. Customers in the European Union have the right to return the product within 14 days and receive a full refund. 

Therefore, you need to identify the regulations that work in your country of operation and comply with them. 

  1. Use chatbots to handle your returns

Integrating chatbots into your E-commerce return process can greatly enhance its efficiency. Simply add them to your website and they will make your process seamless.

With chatbots readily available on your website, customers can easily provide return details and receive guidance throughout the process. This not only ensures customer satisfaction but also saves you time and effort in handling each return individually.

  1. Keep your return policy simple

Ensure your E-commerce return policy is crafted using clear and concise language, which states rules that are easy to understand for each and every customer. Do not leave your return conditions open to interpretation.

Put every detail down correctly and make sure your customers can understand the rules and process of your returns. You can also seek feedback from other people before publishing your return policy online for your customers. 

Where Can You Display Your Return Policy?

After crafting a well-defined E-commerce return and exchange policy, the next crucial step is to ensure that your customers can easily access and view the policy before making a purchase.

Displaying your policy prominently can set expectations and minimize the number of dissatisfied customers. While it’s impossible to please everyone, making your policy visible can go a long way in reducing the number of returns and exchanges.

To make your policy easily accessible, include links to it in the following places:

  • Your website footer
  • Your FAQ page under the returns section
  • Your product pages
  • Cart and checkout pages
  • Order confirmation email
  • Your wish list pages

Ensure that customers are aware of your return and exchange policy before they purchase by placing links to your policy in these key locations. 

Are Return And Refund Policies Legally Required?

The legality of an E-commerce return and refund policy can vary based on the country in which your business operates.

According to the Consumer Protection Act of 2019 in India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods. Customers are entitled to return semi-durable and durable products within 15 days of purchase, provided they are in their original packaging and have not undergone any changes in shape or size.

In the United States, there is no legal requirement for an E-commerce return policy, but it is important to clearly state on your website whether or not you have one. Some states may also require you to disclose this information during the checkout process.

In the European Union, sellers are required to offer repair, replacement, or refund options for faulty products. In the United Kingdom, traders must offer a full refund for faulty, damaged, or misrepresented products. And in Australia, customers have the right to repair, refund, or replace products under the Australian Consumer Law.

Therefore, it is important to research the legal requirements for an E-commerce return policy in your country of operation and comply with all applicable regulations.

Final Words

Whether you’re starting a new online store or looking to improve an existing E-commerce return policy, the above guide will help you create a policy that sets your business apart from the competition.

ANS Commerce is here to help with the digital process. As a full-stack E-commerce enabler, we offer top-notch solutions and services to online businesses. Our team of experienced professionals can assist you from start to finish, helping you achieve your goals and boost your sales and revenue. Whether you’re launching a new online store or seeking to enhance your existing E-commerce business, ANS Commerce has the expertise and resources to help you succeed in the digital marketplace.

To know more about how ANS Commerce can help you, Book a free consultation with our E-commerce experts today!

O2O Commerce: Evolution Of Retail Business

Imagine a scenario: your customer is scrolling through your E-commerce website, adding items to their cart, and getting excited about their upcoming purchase. But then, they start to second-guess their choices. What if the product doesn’t fit? What if the color is different than what they had envisioned? Suddenly, the convenience of online shopping starts to lose its allure. 

This is where online-to-offline (O2O) commerce steps in – a strategy that seamlessly blends the convenience of online shopping with the ‘touch-n-feel’ experience of in-store shopping. By embracing O2O commerce strategies, businesses can eliminate the uncertainties of E-commerce, drive retail sales and build customer loyalty in a quick span. In this blog, we’ll dive into the world of online-to-offline commerce and understand how it will revolutionize the way customers are going to shop in the coming days.

What Is Online-To-Offline (O2O) Commerce?

Online-to-offline commerce refers to a modern business strategy where you attract potential customers from online channels to your physical store in order to complete a purchase. In O2O Commerce, online shoppers get the best of both worlds (online and offline) via capabilities such as try & buy, in-store pickup, and home delivery.

The major goals of O2O commerce include: 

  • To ensure that your online and offline channels complement and not compete with one another 
  • To build better brand awareness across channels
  • To gather valuable customer data that can be used to improve marketing efforts and enhance customer experience

How Does O2O Commerce Work?

O2O commerce starts with online engagement, where customers search for products online, check their availability, and compare prices across different platforms. Then customers either place the order online and choose to pick up the product at a store or book an appointment online to personally visit the store and try the product before purchasing it. Either way, your online customers get the opportunity to physically experience the products before using them. 

Customers also get personalized service from the staff and a chance to clear all their doubts and apprehensions about the product. Additionally, some e-commerce brands also deliver products to the doorsteps of the customers, thereby boosting convenience even further.

How does O2O commerce works

O2O commerce business model benefits

Let’s explore some of the key benefits of the O2O E-commerce business model and understand why it has become so popular in recent years.

Reach more customers

By having an online presence, you attract one set of customers who prefer the convenience of E-commerce. At the same time, by creating an opportunity to complete the purchase from a brick-and-mortar store, you also pull those audiences who love to engage in a physical purchasing process that online shopping can’t provide. This automatically multiplies your reach and drives both online and offline sales. 

Pro Tip: In case you already have a strong web presence, motivate your consumers to shop in your brick-and-mortar stores by offering special in-store discounts and conducting events. 

Reduce shipping & logistic cost

In O2O, you offer your customers an option to research online and buy in-store, which eliminates the need for shipping. This reduces not only the cost of logistics, returns but also the risk of lost or damaged packages. Apart from this, you can use your physical stores as mini fulfillment centers, allowing you to use your existing infrastructure to fulfill your regular online orders. This can reduce the cost of warehousing.

Give shoppers what they want – the store experience

Despite the convenience of online shopping, many customers still value the store experience. In a store, you can provide a brand specific personalized shopping experience that enables customers to touch, feel, and try products before making a purchase. This is particularly important for products that require a more tactile experience, such as clothing, shoes, or home furnishings.

The O2O model also allows customers to get their products right away, which creates instant gratification in their minds. With online shopping, there is always a delay between the time a customer places an order and when they receive their product.

O2O commerce strategies retailers can implement

As the competition in E-commerce is heating up, retailers must adopt innovative strategies to stay ahead of the curve. Here are some effective O2O commerce strategies that you can implement to stay ahead of the competition

BOPIS (Buy Online, Pick-up In-Store)

By implementing BOPIS, you enable your customers to buy products online and pick them up at a nearby physical store. This is beneficial for both parties. Customers enjoy the flexibility to choose when and where to receive their products. They can select a store location and a convenient pick-up time that fits their schedule. For retailers, this strategy creates an opportunity to upsell customers on additional products when they visit the store to pick up their purchases.

However, you must provide clear information on your website about which products are available for in-store pick-up, as well as the time frame for pick-up. To make the process even smoother, you can offer a designated pick-up area in-store or even provide a curbside pick-up option.

Offer Appointment Booking

Allow customers to book a time to come into the store to browse products or receive expert advice from a sales associate. It provides customers with a convenient way to schedule their visit to the store, eliminating the need to wait in long lines or deal with crowded stores. This can be particularly appealing to those customers who have busy schedules and want to avoid wasting time waiting for assistance or finding the product they need. 

You can successfully implement this strategy by providing an online booking system on your e-commerce website. It is also important that you send confirmation emails or text messages with details about customer appointments.

Try & Buy/Home Delivery

In this, you allow customers to place the order online, try the products once they are home delivered, keep the products that they like, and return the rest to get a refund. Brands like Firstcry and Myntra use this strategy to drive growth.

Alternatively, you can let customers first research online, visit the physical store to try the product, and finally have their purchases delivered to their homes. This strategy can be particularly useful for those customers looking to purchase products that cannot be transported easily. Brands like Pepperfry, the furniture retailer, use this strategy.

In case you are providing the home delivery service, be upfront about the delivery fees and timelines and ensure that you have the terms clearly mentioned in your shipping policy.  You should also consider partnering with third-party delivery services or investing in your own delivery fleet to ensure that deliveries are made on time and in a professional manner.

In-store returns & exchange

This allows customers to return or exchange products they purchased online at a retail store location. This can be attractive to those customers who prefer the convenience of shopping online but want the reassurance of being able to return or exchange products in person. This eliminates the hassle and uncertainty of shipping items back to the retailer.

For retailers, this is a great way to increase foot traffic to their physical stores and create opportunities to engage with customers in person. By having customers come into the store to return or exchange products, retailers have an opportunity to offer personalized recommendations, suggest alternative products, and create a positive and engaging shopping experience.

Pop-up stores

Pop-up stores are temporary retail locations that are typically set up for a short period of time, often a few days or weeks. They are a great way to bridge the gap between your online and offline presence. Since they can be set up instantly with minimal effort, multiple pop-up stores can be installed, preferably closer to customer locations. You can showcase products and give an opportunity for the customers to try out the product in person without having to travel a lot. You can use the pop-up stores to collect valuable customer data and insights, which can be used to tailor future product development and marketing strategies. 

Invest in local SEO

Investing in local SEO can help retailers reach customers in their local area. By optimizing your website and online presence for local search, you can improve your visibility on search engines like Google and attract more foot traffic to your physical stores. You can also leverage local search platforms such as Google My Business to increase visibility and attract new customers. By creating a detailed and accurate profile on this platform and regularly updating it with relevant information such as store hours, contact information, and reviews, you can improve your local presence and attract relevant customers to your physical customers.

Examples of O2O Commerce Implementation 

Here are some examples of brands that have embraced O2O Commerce in recent years – 

Lenskart

Screenshot of Lenskart website

Lenskart, the popular eyewear brand, has a strong presence in both online and offline spaces. It is one of the early adopters of the O2O Commerce model. Besides letting customers place an order online, it also lets them try the eyewear at the nearest store by booking an appointment. The brand even offers various freebies and free services for all the customers who visit their physical store. Once the product is ready, customers will receive it at their doorstep. 

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Offer Appointment Booking
  3. Home Delivery
  4. In-store returns and exchanges
  5. Invest in local SEO

Manyavar

Screenshot of Manyavar website

This Indian wedding wear and ethnic wear brand has also adopted the O2O model. On every product’s detail page, customers have the option to book an appointment to visit a physical store in person and try the selected product. This is a great strategy for a brand that sells clothes for special occasions, as every purchase has to be perfect in terms of fitting and appearance.

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Offer Appointment Booking
  3. Invest in local SEO

Croma

Screenshot of Croma website

Croma is a retail chain that sells consumer electronics and home appliances. It operates both offline stores and an e-commerce website that offers a wide range of products. Croma offers an option for its customers to pick up their orders from a nearby store at a convenient date and time. This option is given at the time of checkout. Alternatively, customers have the option to book an appointment to visit the store to experience the product first-hand after researching it online. 

Online-to-offline strategies they used: 

  1. BOPIS
  2. Invest in local SEO

Bluestone

Screenshot of Bluestone website

This jewelry brand has also taken the O2O route to attract website visitors to its store. Bluestone offers multiple options to complete a purchase. You can either buy it online, visit the nearest store where the product is available, or book a home trial. On the product details page, the brand clearly highlights the different stores where the chosen product is available so that customers can visit, try the product, and complete the purchase. 

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Home Delivery

Conclusion

O2O commerce offers a great opportunity for e-commerce brands to reach more customers, improve customer experience, and boost both offline and online sales. Although there are some challenges that come with implementing an O2O model, partnering with the right E-commerce service provider can make it a lot easier to overcome these obstacles. And that’s where ANS Commerce comes in. 

We are an e-commerce expert who takes care of the entire life-cycle of your e-commerce store. We have several specialists in-house who can help you plan, strategize, and implement the online-to-offline commerce model in your business. To talk to our O2O specialists, book a demo now. 

Shipping Labels 101: A Beginners Guide On How to Create a Shipping Label

In the world of E-commerce, shipping labels might not be the most glamorous topic to discuss, but they are an essential component of any online business. Despite this, many E-commerce owners tend to overlook the importance of shipping labels, which can cause significant issues for both themselves and their customers.

Creating and managing shipping labels play a critical role in ensuring that packages are delivered accurately and on time. Without proper shipping labels, packages can easily get lost, delayed, or delivered to the wrong address, leading to unhappy customers and additional costs for business owners.

In this beginner’s guide to creating shipping labels, we’ll explore the importance of shipping labels, their components, and the best practices to follow. Read along! 

What is a Shipping Label?

A shipping label is a piece of documentation that carries key information about a package, such as a recipient’s information, sender’s information, tracking number, etc. It serves as a way for the carriers to identify and route the package to its intended destination. A shipping label is also sometimes referred to as a package label. 

How does the shipping label work?

Every organisation uses a specific template for its shipping labels. After printing the shipping label, it is affixed to the outside of the package. These labels are scanned at the source, destination, and intermediate facilities, thus offering real-time tracking information of the package’s location and delivery status. Also, each label is unique, and one cannot reuse them. 

Components of shipping label explained

A shipping label includes a variety of critical components that provide valuable information about the package. Let’s take a closer look at all these key components and why they are important.

Sender information 

The name and full address of the person or business who sends the package. This information helps the carriers to reach out to someone in case of any issues with the shipment or delivery.

Recipient information 

The name and full address of the person who will receive the package. This information ensures that the carriers deliver the package to the right person.

Package weight 

The weight of the product in kilograms or grams. It helps the carriers determine how to handle the package at each stage of the shipping process. For instance, if a package is very heavy, it may require special handling or equipment to load and unload it from the truck or airplane.

Special handling information 

This includes instructions such as “fragile” or “handle with care.” This is to ensure that the package is treated appropriately during transit and there is no damage to the product.

Routing and tracking number 

These unique identifiers help in tracking the package throughout the shipping process, right from the point of origin to the final destination.

Customs information 

This is applicable only if the package is being shipped internationally. It may include the contents of the package, the value of the contents, and any other necessary customs documentation. This information ensures that the package clears customs quickly and easily.

Here is an example of a shipping label – 

Example of a shipping label

Different types of shipping label

Different types of packages need different types of labels. Here are some of the commonly used types of shipping labels -. 

Arrow labels

As the name suggests, these labels contain an arrow indicating the correct orientation of products during transit. Orders containing electronic items and hazardous materials use these kinds of labels.

Example of an arrow label

Fragile labels

These labels indicate that the entire content of the package is delicate and should be handled very carefully. The word “Fragile” is often written in bold and in large font with bright background for easy readability. 

Example of fragile label

Dot labels

They are used for packages that contain flammable, corrosive, explosive, or poisonous products. These labels are extremely important to avoid any risk to life and property while handling the package. They are also printed in bright colors and have bold text. 

Example of a dot label

International shipping label

Such labels are specifically designed for packages that will cross international borders. They contain important information required by customs officials and shipping carriers in different countries. It always includes the sender’s and recipient’s addresses, the weight of the package, the contents of the package, any customs declarations, and special instructions or warnings for handling the package.

Example of international shipping label

How to Create a Shipping Label

There are two common ways to create a shipping label,

Creating Shipping Labels Through a Carrier

Most shipping carriers like DHL, UPS, FedEx, and USPS have software to create shipping labels. These in-house tools come with ready-made templates that fit their specific label requirements. All you need to do is enter the necessary shipping information, download the label, and print it at your home or office. You can then attach it to the package and drop it off at the carrier location or schedule a pickup. However, this is not the best method in terms of efficiency and cost, especially if you handle hundreds of orders daily. 

Creating Shipping Labels Through Software Solutions

You can use specialized software designed explicitly for creating labels. These programs can be installed and integrated with your E-commerce platform, helping you automate shipping. For instance, it can directly connect with your E-commerce store, retrieve every order information from the database, and automatically create the label. This is the more efficient and cost-effective method if you are shipping large volumes of packages.

Shipping Label Best Practices To Follow 

Here are 3 special tips you can follow while managing shipping labels for your E-commerce business – 

1. Special Instructions

No amount of bubble wrap can protect your package if it is not handled properly during transit. And that’s why it is very important to mention special instructions such as “Fragile,” “Flammable,” “This side up,” etc., on your shipping labels. Adding these special requirements will ensure that your package arrives at your customer’s doorstep in perfect condition.

2. Label Placement

You should always place the label on the top of the package, preferably near the center. This makes it easy for carriers to scan the package. It also ensures that the label is easily visible throughout the shipping process – very important if there is a “This Side Up” or “Fragile” instruction. Also, make sure that the label is not folded over any edges and is affixed securely. This will make sure that it is not covering any important information, such as the recipient’s address.

3. Packing Slips

Make sure your order includes a packing slip, also known as “waybill”. A packing slip typically contains information such as the customer’s address, order date, order number, product details, quantity, customer service number, etc. This is usually placed inside the package or outside in a plastic wallet. A packing slip also sometimes serves as the receipt for the customer. This will help ensure that the recipient receives everything they were expecting and that they have a record of the items that were shipped.

Use Third Party logistic services to streamline the shipping process 

As you have seen in this post, creating and managing shipping labels is a time-consuming task. It requires attention to detail, as well as an understanding of shipping carriers and their unique label requirements. Not to mention the added pressure of ensuring that packages are delivered on time and in good condition. 

This is where ANS Commerce steps in – we are India’s leading E-commerce service provider specializing in taking care of every aspect of online selling – from managing your brand store to ensuring ROI driven performance marketing and warehousing & logistic services – we provide it all! 

By partnering with ANS Commerce, you can focus on growing your brand and delivering excellent customer experiences while leaving everything else to us. 

To know more about how ANS Commerce can help you, book a free consultation today!

Shipping Label FAQs answered

What is a prepaid shipping label?

A prepaid shipping label is a label that has already been paid for by the sender, which means that the recipient does not have to pay for shipping. E-commerce businesses offering free shipping use prepaid shipping labels. 

Can I print a shipping label at home?

Yes, you can print a shipping label at home. You just need access to a printer, label sheets, and dedicated software for creating labels. 

Can I handwrite a shipping label?

Yes, you can handwrite a shipping label, but it is generally not recommended. Handwritten shipping labels can be difficult to read, which can result in delivery delays or even lost packages. You would still need to have barcode labels for tracking. 

How much does it cost to get a shipping label?

The cost to print a shipping label can vary depending on the mode you use to create labels. Using softwares to print labels is usually cheaper than getting shipping labels from courier service providers. 

Do shipping labels expire?

Expiry policies for shipping labels can vary depending on the shipping carrier. Most shipping carriers have an expiry date of anywhere between 2 weeks to 1 year for the labels generated through their software.

Are there size requirements for shipping labels?

Yes, there are size requirements for shipping labels, and they can vary depending on the shipping carrier. Generally, shipping labels must be large enough to accommodate all of the necessary information, including the shipping address, return address, tracking barcode, and any other required information.

Where should I put a shipping label on a package or box?

Place the label in a location that is visible and easy to scan. It is generally recommended to place the label on the largest flat surface of the package, such as the top or one of the sides. The label should be placed so that it is not obstructed by any seams, flaps, or edges and is positioned straight and flat. 

If the package is a box, the shipping label should be placed on the same side as the opening or flaps of the box. This ensures that the label is visible when the package is opened and scanned during the shipping process.

E-commerce KPIs & Metrics You Should Track For Business Success

As an E-commerce store founder, you must be aware of the importance of setting sales and marketing goals to grow your business. However, to truly understand what’s working and identify areas for improvement, it’s essential to align your E-commerce KPIs and metrics with the customer journey. 

By doing so, you’ll gain a better understanding of how your customers are interacting with your brand, and identify opportunities to improve their experience and drive revenue growth. In this blog, we’ll explore the E-commerce KPIs and metrics you should track for business success, aligning them with the customer journey. But let’s cover some basics first. 

What are E-commerce KPIs?

E-commerce KPIs (Key Performance Indicators) are measurable values that indicate your progress towards specific business goals. It gives a comprehensive view of how your e-commerce business is performing. 

For example, conversion rate or cart abandonment are classic examples of E-commerce KPIs. They are different from metrics, which highlight your progress towards specific business objectives. Number of visits, page views per session, bounce rate, etc., are all examples of metrics.

There are hundreds of different KPIs you could use to track your e-commerce business, but not all of them are equally important for your success. Hence, when choosing KPIs and metrics you should focus on the ones: 

  • That directly impacts your bottom line and supports your business strategy.
  • That is easy to measure and provides valuable insights.
  • Are aligned with the stage of your business
  • Follows business specific needs and not just industry trends. 
  • Lastly, are meaningful and actionable to keep your processes agile.

20 E-commerce KPIs you should monitor for business success

We have mapped the most important KPIs with the customer purchase journey to make things easier for you. Here are the metrics you should measure at each stage: 

20 ecommerce KPIs for business success

Let’s dig deeper into each stage and it’s corresponding metrics in the next section: 

Product Discovery Metrics

Generating brand awareness is crucial to attract visitors to your website. Even though it may appear to be a simple concept, without building awareness, your brand may remain undiscovered, and you may lose out on potential revenue. Here are the metrics you should track to measure your brand awareness efforts: 

Impressions

Impressions help you measure the number of times your ad or content is displayed to someone on any platform such as third-party sites, search results, or social media platforms, regardless of whether the viewer clicks on it or not. 

Even though impressions are not a direct measure of engagement or conversions, the metric provides valuable insight into how many people are potentially exposed to your brand, making it a useful metric for evaluating the effectiveness of your marketing efforts.

Reach

Reach is the number of unique individuals who viewed your product or visited your online store during a specific period of time. Reach is a crucial metric for e-commerce businesses because it provides insights into how many potential customers have been exposed to your brand, products, or services.

Don’t get confused between reach and impressions. Reach focuses on the unique individuals who have viewed your content, and impressions refer to the total number of times your content is displayed to customers, including multiple views by the same user. For example, if a person views a product page on your website ten times, this will be counted as ten impressions but only one reach. 

To improve your marketing campaigns’ reach, ensure your brand voice is defined and messaging resonates with your audience.

Engagement 

Engagement shows how many viewers interacted with your content. It may include both acquisition-related metrics, such as CTC (click-through rate), and non-acquisition-related metrics, such as likes, comments, and shares. 

To gauge engagement on your e-commerce site, keep a close eye on the average session duration and bounce rate. Average session duration is the average amount of time a user spends on a particular channel. A high average session duration indicates higher engagement with a channel. Bounce rate is the percentage of users who visited your website but left after viewing a single page. A high bounce indicates lower engagement.

Consideration or Acquisition Metrics

There are multiple ways by which you can reach your potential customers. It could be emails, paid media, and social media, to name a few. You must use all these channels to get your potential customers to consider your products. The following metrics determine whether you were successful in enticing customers to visit your website or not. 

Organic acquisition traffic

Organic acquisition traffic measures the number of visitors reaching your site organically. These visitors come from channels like search engines, social media, and even blogging sites. The catch here is that these visitors reach your website through their own research and not explicit paid promotions or advertising. This metric helps you gain insights about your SEO strategy, social media presence, and the overall results of your content marketing efforts—allowing you to improve and optimize these strategies accordingly.

Email Click-through rate (CTR) 

In simple terms, this is the percentage of email subscribers who received your email, opened it, and clicked through to your site. It is a valuable indicator of the effectiveness of email marketing campaigns. To improve email CTR, create visually appealing and well-designed emails, including mobile-friendly design, clear and compelling calls-to-action, and engaging subject lines that encourage recipients to open the email and explore the content.

Cost per acquisition (CPA)

Cost per acquisition measures the total cost of acquiring a customer. It is an important metric to measure because it points to the profitability of your marketing efforts. 

Cost per acquisition should always be measured in the context of AOV (average order value). For example, having a CAC of Rs 150 and an AOV of Rs 6,000 is a good sign for business, whereas a CAC of Rs 40 and an AOV of Rs 60 means the business is not sustainable.

Social media engagement metrics

E-commerce sales on social media is expected to reach $474 billion by 2024, hence it’s important to have a strong social media presence for D2C brands. To measure the effectiveness of your social media presence, keep track of likes, shares, clicks and comments on posts. 

E-commerce metrics during conversion

Now that you have visitors to your site, measuring how well you convert them into paying customers is important. Our goal here is to identify transactional funnel drop-offs and prevent them. These metrics can help you do just that. 

Website bounce rate 

It is the percentage of visitors who leave a website after viewing only one page. Measuring bounce rate is important because it shows how relevant and engaging your content is. For instance, a high bounce rate indicates that your visitors are not finding what they are looking for. It could be either due to irrelevant content or that your website is difficult to navigate. 

Shopping cart abandonment rate

Shopping cart abandonment rate is the percentage of visitors who add items to their cart but do not complete the purchase. 

Abandonment rate could indicate that the visitors are experiencing issues with the shopping cart itself, such as a confusing layout or a lack of clear CTA. It could also mean issues with the checkout process, preventing customers from completing the order. We suggest setting up a cart abandonment email sequence to convert these lost sales. 

Average order value

Average Order Value or AOV measures the average value of each order placed by a customer. It is calculated by dividing the total revenue by the number of orders. Measuring AOV is important as it helps in understanding the buying patterns and preferences of your customers. This, in turn, will help in identifying and fine-tuning upselling or cross-selling strategies to increase revenue.

Sales conversion rate 

The sales conversion rate is the total number of sales divided by the total number of sessions. It helps in determining how much traffic is needed to achieve your target sales. However, this is a granular metric and you need to analyze it at micro levels. You can dissect it by channel, category of products, campaign, etc. 

Product delivery metrics 

Most D2C brands forget to measure metrics related to product delivery, which can negatively impact their customer experience and might lead to loss of repeat customers. To ensure that your logistics are fool-proof, we suggest keeping track of your Delivery TAT and Return & Refund TATs.

  • Delivery TAT is the time taken to process and deliver an order to the customer.
  • Return & refund TAT is the time to process and complete a return and refund request of a customer.

Retention Metrics

Retaining an existing customer is five times cheaper than acquiring a new customer. Also, repeat customers tend to spend more and refer others. Here are the metrics you should track to know how well your brand is retaining customers: 

  • Customer retention rate: It measures the percentage of customers who continue to do business with your company after their initial purchase.
  • Repeat purchase rate: This measures the percentage of customers who make a second purchase from your brand. A high repeat purchase rate indicates that customers are satisfied with your product or service and are likely to continue doing business with you.
  • Customer lifetime value (CLV): This metric measures the total money a customer is expected to spend on your products throughout their relationship with your brand. Customers with a high CLV are valuable to your business and should be prioritized in your retention efforts.
  • Churn rate: It is the percentage of customers who stop purchasing from your e-commerce store over a specific period of time. A high churn rate indicates that your brand may be struggling with customer retention.
  • Refund and return rate: High refund and return rates can plague your business. It can be either due to issues with your product or because of impulse buying from customers. To minimize the impact, set up clear return and refund policies. Additionally, provide detailed product descriptions, accurate sizing charts, and high-quality product images.

Customer Advocacy metrics 

Now that you have acquired, converted, and retained customers, it’s time to convert them as your brand ambassadors. The customer advocacy metrics quantify the degree to which your customers support and promote your brand and products to their friends and family. Here are a few metrics you should consider tracking:

Net Promoter Score (NPS)

NPS measures customer satisfaction and loyalty and is a widely used metric for assessing customer advocacy. It asks customers to rate on a scale of 0 to 10 how likely they are to recommend your brand to others. Customers who score 9 or 10 are considered promoters, while those who score six or below are considered detractors. You can calculate NPS Score by subtracting the percentage of detractors from the percentage of promoters.

Customer referral rate

It is the percentage of customers who refer new customers to your business. When you measure customer referral rate, you will understand the effectiveness of your referral marketing efforts. In addition, it will help you identify areas where you can improve your referral programs, such as by offering better referral incentives or providing an easy way for customers to refer others.

Subscription rate

Email marketing is one of the most promising marketing channels today. As a result, it becomes important to measure the subscription rate or the percentage of your visitors who opted-in for your email lists. When the subscription rate is high, it shows that customers find your products promising and want to keep purchasing from you.

Lastly, you should also monitor customer reviews and ratings to ensure that you are providing exceptional customer service. 

Other E-commerce business metrics to track 

Apart from the above metrics, E-commerce businesses should also track last-mile delivery and product-related metrics to ensure they can optimize logistic services and make the right decisions about their product. 

Last mile delivery metrics

Last-mile delivery metrics are a set of KPIs used to assess the efficiency and effectiveness of the final stages of your delivery process. It mainly involves the delivery of the product to your customer. This stage is often referred to as the “last mile” because it is the final step in the delivery chain and significantly impacts the customer experience. Here are some of the metrics that fall under the last-mile delivery segment: 

  • Delivery accuracy: The percentage of deliveries that are made on time and to the correct address.
  • Delivery success rate: The percentage of deliveries that are successfully completed without any issues or complications.
  • Customer satisfaction: The degree to which customers are satisfied with the delivery process and outcome.
  • Delivery cost: The total cost of the delivery process, including transportation, handling, and other expenses.

Product metrics 

With the increasing competition in the direct-to-consumer (D2C) space, it’s essential to continually monitor your products’ performance and make data-driven decisions to stay ahead of the curve. 

Some of the essential product metrics that you should monitor are:

  1. Product views: Keep track of the number of times a particular product page is viewed. This metric can help you identify which products generate the most interest amongst your potential customers.
  2. Add-to-cart rate: Monitor the percentage of visitors who add a product to their cart after viewing it. This metric can help you understand how well your product pages and pricing resonate with your target audience.
  3. Product reviews: This metric can help you understand how satisfied your customers are with your products and identify areas for improvement.
  4. Time to sell: Monitor the average time it takes to sell a product after it’s added to the inventory. This metric can help you optimize your inventory management and pricing strategies.
  5. Inventory turnover: Keep track of the rate at which you’re selling through your inventory in a specific category. This metric can help you identify which products are selling well and the ones that may require adjustments to their pricing or marketing.

In addition to these quantitative metrics, you should collect qualitative feedback from your customers through surveys, focus groups, or other feedback channels. The feedback can help you understand your customers’ preferences, pain points, and product expectations, which can guide your product development and marketing efforts.

Finally, it’s also essential to closely monitor your competitors and their product offerings. Analyzing their best-selling products and identifying any emerging trends in your industry can help you stay ahead of the curve. 

How to measure e-commerce KPIs success 

Start by creating an index that summarizes your performance across specific marketing channels. For instance, let’s say you have selected five metrics which performed at: 

  • Two metrics performed at 80% 
  • One metrics performed at 60%
  • Two metrics performed at 100%

The index will be calculated as 

 (2*0.8 + 1*0.6 + 2*1)/5 = 0.84 or 84%

Now you need to focus on how to improve this index. Rather than fixing the lowest performing metrics, identify which of those metrics is most important for your business growth at the time and focus on that.  

ANS Commerce is here to help 

We know that improving these metrics can be a lot of work and might seem overwhelming, especially if you’re already juggling multiple aspects of your E-commerce business. That’s where ANS Commerce comes in.

As a Flipkart group company, we are India’s #1 Full Stack E-commerce Growth Partner, trusted by over 200+ brands. We offer end-to-end E-commerce services, from creating your online store to running profitable performance marketing campaigns, managing marketplaces, order fulfillment, and warehousing – all tailored to supercharge your brand’s growth.

Want to know how we can scale your E-commerce business? Book a free consulting session with our experts today!

Conversational Commerce 101: Understanding the Basics and Its Effects on the Customer Journey

A whopping 86% of buyers are willing to pay more for a good customer experience. Also, after a poor customer experience, 76% of consumers will stop doing business with a brand.

What do these stats depict?

The role and importance of Customer Experience in modern E-Commerce.

And one of the most important pillars of modern E-Commerce Customer Experience is Conversational Commerce.

What is Conversational Commerce?

Conversational commerce refers to the use of messaging and chatting applications for improved customer service. It involves the digitalization of customer service and allows for simultaneous communication with thousands of potential customers via social media, messenger apps, and websites. The conversations can be carried out by live customer service agents or chatbots, or a combination of both. It’s important for E-Commerce businesses as it provides a convenient and efficient way for customers to get the information and support they need. 

Using conversational commerce, E-Commerce businesses can improve customer satisfaction, increase sales, and build stronger customer relationships. Additionally, since many customers prefer to communicate through chat or messaging, it helps businesses meet their customers where they are and offer support in the channel they prefer.

Examples of Conversational Commerce

Tata Cliq

Use Whatsapp to share abandonment cart recovery message

Platform: Whatsapp

TataCliq utilizes Whatsapp Commerce to facilitate their customers’ shopping journey. Many customers add items to their cart and create wish lists but fail to complete the purchase. 

To reduce cart abandonment, TataCliq sends abandoned cart recovery messages via Whatsapp as a gentle reminder. These messages sometimes even turn into a conversation, allowing TataCliq to better understand their customers’ requirements and provide personalized recommendations. 

It’s safe to say that Whatsapp plays a significant role in recovering those lost sales and enhancing customers’ overall satisfaction since it’s the most used and accessible conversational platform in the world.

Why it works: 

  • Attention grabbing copy to divert the user’s interest back to their abandoned cart
  • Use of offers and discount to convince the user to make their purchase
  • Direct link to checkout and place their order–making the process convenient for customers

WestSide

Whatsapp Commerce to share coupon code

Platform: Whatsapp Commerce

Westside makes the best use of Conversational Commerce by incorporating Whatsapp Commerce to build customer loyalty. 

They offer exclusive deals to its members on Whatsapp, enticing more people to add to its sales revenue. Here is an example of sending personalized offers on their birthdays. This approach creates a sense of inclusivity with the brand and leads to increased customer satisfaction. 

Why it works: 

  • Use of brand and campaign specific visuals helps in building awareness
  • Detailed messaging with validity dates prevents any undue confusion 
  • Use of easily visible CTA makes helps in making the choice

Starbucks

Starbucks app screenshot

 Credit: Starbucks

Platform: Mobile App

Starbucks has utilized its app to tackle a common problem for busy customers: long lines for coffee. With their app, customers can place an order with a “virtual barista” through messaging and customize their morning beverage just as they would with a real barista.

The streamlined message-based ordering system allows customers to use voice commands, text, and payment through their devices. Upon completion, they receive a notification when the order is ready, allowing them to bypass those long lines.

Why it works:

  • Makes mornings easier for customers
  • Allows multiple ways to order, including texting and voice commands
  • Payments are integrated for added convenience
  • Connects you to nearby stores before making an order

H&M

H&M chatbot

 

Credit: H&M

Platform: Chatbot

H&M has elevated its conversational commerce approach and serves as a prime example of personalized customer service. They’ve developed a virtual assistant that provides fashion guidance, enhancing the customer’s experience and presenting potential upselling opportunities.

Why it works:

  • The chatbot enables extensive user interaction, enabling the E-commerce brand to gather more data for targeted marketing. 
  • Its personalized touch creates a human-like virtual shopping experience for its customers. 
  • Additionally, the relaxed tone of the chatbot conversations makes it convenient for users to shop at their own pace, even during a busy day.

Clinique

Clinique website chatbot

Credit: Clinique

Platform: Website chatbot

Clinique has adopted conversational commerce to provide supplementary product assistance, exemplifying how E-commerce brands can utilize conversational commerce tools for personalized product suggestions. Given the premium prices, this service has become a customer expectation. 

Customers have the choice of using Facebook Messenger, text messaging, or video chat. The inclusion of video chat holds significant power, making the experience more personal and ideal for imparting skincare and makeup advice, given the nature of the products sold.

Why it works:

  • Multiple chat platform options make it easier for customers to choose the best fit for them.
  • Human assistance makes it more personalized and easy to chat.

Why is Conversational Commerce Important?

Conversational commerce improves the shopping experience by making it an easier, more personalized, and a fun experience for the buyers. According to a recent study by PwC, buyers look for speed, convenience, consistency, and friendliness while shopping online. 

How Does Conversational Commerce Really Work?

Unlike intrusive pop-ups and banners, conversational commerce involves using messaging or chat interfaces to facilitate transactions and interactions with customers. 

It provides online stores an opportunity to engage with their customers at every stage of the customer journey.

One of the most sought-after tools for conversational commerce is the WhatsApp messenger app, so much so that since its launch in 2021, more than 5 million businesses have been using WhatsApp to engage with their target customers.

Using the WhatsApp messenger app, you can use conversational commerce to build customer relationships at each stage of a buyer’s journey, here is how: 

Awareness

The customer journey starts with recognizing the need for a product or service, leading to a search for fulfillment. During this process, customers may come across your brand and seek to engage with you. 

Here, you can use Whatsapp Commerce to raise awareness about your products and generate leads through targeted ads and text on the messenger app. The personal, one-on-one communication demonstrates that you care about your customers, contributing to better customer retention and conversion rates by increasing consumer confidence in your brand.

Consideration

conversational commerce during consideration stage

At this stage, customers have already conducted initial research and gained some knowledge about your business. However, their quest for information continues as they compare your offerings with competitors and read customer reviews. This is where Whatsappcommerce can provide customers with additional insights to deepen their understanding of your offerings. 

With the help of Whatsapp Commerce,  you can:

  1. Suggest personalized product recommendations based on customer preferences and past behavior.
  2. Share information about the product, like fit and available sizes, warranty, exchange policy, etc.
  3. Help customers by sharing nearby store locations for in-store purchases or guide them online for the type of product they want.

Purchase

conversational commerce during purchase stage

After obtaining information about the products and services under consideration, customers evaluate these options based on factors such as price, quality, benefits, performance, and brand trust. 

Direct communication with customers at this stage strengthens their trust in the brand and increases the chances of acquiring a loyal customer. It also presents opportunities for making the sale by providing different pricing options, highlighting features, and reassuring customers of the quality through a personal and credible conversation.

You can use Whatsapp commerce to:

  1. Keep your customers informed about stock availability and payment options
  2. Share catalog links for similar products that they may be interested in
  3. Utilize messenger app to share order and payment confirmation, as well as tracking information post-purchase

Post Purchase

conversational commerce during post purchase stage

If the customer has reached this stage, you have met their requirements thus far. However, this does not mean you stop striving for excellence. Providing exceptional care for customers during this stage is highly advantageous as it’s much easier to retain an existing customer than to acquire a new one. 

With Whatsapp commerce, you can provide post-purchase support, such as tracking order status, accepting return orders, answering customer queries, etc. You can also use Whatsapp  to gather feedback and reviews from customers. 

Advocacy

Use conversational commerce to build customer loyalty

This is the final stage of the customer journey and the most challenging to achieve. At this point, the customer should have become a brand advocate who actively promotes your products in their network. 

By continuing the conversation with customers, you can also request testimonials or product reviews, making them feel like a valued part of your team. This reinforces the relationship and enhances your business’ credibility amongst potential customers.

Types of Conversational Commerce

Here are the four major types of conversational commerce:

Conversational AI Chatbots

Chatbots are software programs that assist users by answering their questions through text messages. They have the ability to communicate with multiple users at the same time and provide information quickly, 24×7. 

Chatbots can be integrated into E-commerce sites and messaging platforms, offering a seamless experience throughout the customer journey. These capabilities have made chatbots a widespread form of conversational commerce, enabling brands to engage with customers with minimal effort.

Live Chat

Live chat applications provide customers with the ability to communicate with a real customer service representative. The days of cumbersome customer service forms and phone numbers are a thing of the past. Live chat apps can automate common responses to frequently asked questions, freeing up human customer service agents to assist customers with more complex issues. 

According to Facebook, 64% of customers prefer using a chat app over calling customer service, and live chat enables customer service to handle multiple customer interactions simultaneously, improving efficiency and enhancing the customer experience.

Messaging Apps

You can easily reach your customers by allowing them to talk to your brand through messaging apps like WhatsApp, Facebook and Instagram messenger to name a few. There are many more, but you don’t have to use all of them. Instead, think about the ones your customers use the most and focus on those. Messaging apps create an interpersonal connection between your business and your customers, making them a good way to provide customer support and offer product suggestions.

Voice Assistants

Shopping with voice technology like Siri, Alexa, or Google Assistant is another part of conversational commerce. Many online shoppers, especially millennials, use these voice assistants to make purchases.

According to a survey, almost half of the online millennial shoppers (47%) have used a voice assistant for shopping. Marketers should anticipate common questions or orders from customers and make it easier for them to purchase by enabling voice commands. 

This way, they can simplify the buying process and make it more convenient for the customer to just ask their voice assistant to make the purchase, instead of manually navigating through the product pages.

Benefits of Conversational Commerce

Now that you understand the role of conversational commerce in modern E-commerce, here are a few benefits you get from leveraging it:

Reduce Abandoned Shopping Carts

The ecommerce industry experiences significant loss of revenue due to abandoned shopping carts, with an estimate of $18 billion annually. The implementation of conversational commerce strategies can help address this problem by sending reminders or nudges to customers who have abandoned their carts, inquiring into the reason for abandonment and gaining valuable information, and providing automated links to specific products sought by the customers. 

You can also check out our guide to learn about setting up a fool-proof abandoned cart recovery strategy here. 

Help Address Customer Queries on Time

People are busy, and waiting for responses can make them abandon your brand immediately. This is where implementing conversational commerce strategies helps. With the help of an instant customer query addressing system, you can be available for your customers 24×7 and instantly help them in resolving their issues. 

Help Close Potential Leads or Provide Upselling or Cross-Selling Opportunities

With the use of chatbots in conversational commerce, you can:

  • Schedule sales calls more efficiently and reduce missed appointments through automated booking via chat. 
  • Suggest additional products of interest to customers through messages for upselling. 

Easy to Gather Customer Feedback

Your interaction with a customer doesn’t have to stop after they make a purchase. Your chatbot can follow up with them to gather reviews or feedback, freeing up time for live customer service agents. 

Additionally, you can send automated follow-up messages to increase the likelihood of receiving a review. Research shows that 63% of customers are more likely to provide personal information if they had a positive experience.

Improve Customer Loyalty

Maximize your first impression opportunity by offering a warm welcome to new customers in-store. 

  • Establish strong customer relationships and gain trust by guiding them through their journey. 
  • Utilize a chatbot to share promotional coupons and increase customer engagement. 
  • Incorporate a voice assistant to make information search and product ordering easier for customers. Personalize it with a friendly name and brand-reflecting personality.

Challenges to Conversational Commerce

While conversational commerce comes with a lot of benefits, there are also some challenges, including-

Can Feel Dehumanising

Automation tools can sometimes result in a dehumanising user experience, especially if the AI is outdated or lacks empathy. To prevent this, businesses must ensure that their tool effectively recognizes keywords and can detect frustration or the desire to speak to a human. Avoid frustrating customer interactions by ensuring your chatbot effectively understands your customer base.

Siloed Data

When you have different departments or ways to communicate with customers, it’s important to keep the data organized. If the data is not kept together, it can cause problems. For example, a customer may start talking to you on one platform, but then switch to another platform, like text or email. 

If the information they shared on one platform is not transferred to the other platform, they might have to repeat themselves and become frustrated. To avoid this, make sure to choose a tool that can easily integrate with other tools.

How to Start Using Conversational Commerce for your Online Store

Your conversational commerce strategy will not be established overnight. To attain exceptional outcomes and differentiate yourself from the competition, it is essential to focus on even the most minor details.

Here are three steps to help you leverage conversational commerce for your E-Commerce business:

Analyze your Business Needs

Prior to implementing your conversational tool, assess the challenges faced by your team and customers. Establish achievable goals that you aim to attain. 

Your goal may be to boost sales, which can be accomplished by reducing shopping cart abandonment. 

Alternatively, you may aim to provide faster and more convenient customer support, which can enhance brand loyalty. You decide your objectives. 

After outlining your desired outcomes, categorise and prioritise them to determine the ones that are most vital to your business. It may be better to introduce changes incrementally and assess their effectiveness rather than attempting to overhaul all processes at once.

Do your Research and Identify The Right Tool

Before selecting a specific solution, establish your benchmark. Study how other companies within your industry are harnessing the power of conversational commerce. 

Next, make a list of the available solutions and request demonstrations or sign up for free trials to evaluate the pros and cons of each option. If you have a preferred solution or channel in mind, familiarize yourself with popular and exceptional examples that you can draw upon. 

Also, consider your customers’ perspectives. Review customer feedback to identify areas for improvement in your services. Consider conducting interviews with customers to gain a better understanding of their current needs.

Launch your Tool and Measure KPIs

After selecting your conversational tool, it’s important to establish Key Performance Indicators (KPIs). Examples of KPIs could include the number of customer conversations, customer satisfaction scores, or conversation rates. 

Having KPIs in place will help you track your progress, identify which solution is delivering the best results, and suggest areas for improvement. Once you have established your KPIs, you are ready to launch your conversational commerce strategy.

Once you’ve launched your strategy, it’s crucial to monitor the important growth metrics. Utilizing quality, real-time metrics can assist in evaluating your performance and continuously enhance your conversational activities throughout the customer’s journey.

Final Words

To reap the benefits of conversational commerce, brands must adopt real-time communication tools like bots, messenger apps, and voice assistants. Though creating a strategy and managing conversations can be time-consuming and challenging, treating conversational commerce as a personalized, empathetic experience can foster a sense of comfort and familiarity with customers. Monitoring performance with quality, real-time metrics can also help evaluate and improve interactions throughout the customer’s journey.

​​If you’re looking to optimize your sales funnel and expand your e-commerce business, ANS Commerce can help. 

As India’s leading full-stack e-commerce enabler, our team of e-commerce marketing experts can provide a free consultation to help you improve your business. 

Contact us today to get started!

E-commerce Migration And Re-platforming Guide 2023

With the rapid growth of online shopping, having a platform that can keep up with customer demands is more important than ever. But what do you do when your current platform just isn’t cutting it anymore? The answer is simple: E-commerce migration and re-platforming. 

Moving your online store to a new platform may seem scary, but the benefits are worth it. A new robust platform can offer improved uptime, a better user experience, increased scalability, and the ability to make improvements with ease.

But we know you’re thinking, “Isn’t E-commerce migration just going to be a hassle?” Yes, it can be, but with the right E-commerce migration strategy in place, you can make the transition smoothly and effectively. That’s why we’re here to help. 

In this guide, you’ll learn everything you need to know about E-commerce migration and re-platforming so you can set your business up for success. Let’s get started!

What Is E-commerce Migration?

In simple terms, E-commerce migration is the process of moving your existing E-commerce store (both front-end and back-end) from one CMS to another. The goal of such a transition is to improve your online store performance by leveraging the advanced features of the new platform. The process can involve migrating product catalog, customer data, orders, and other critical information and redesigning website’s look and feel to align with brand identity. 

E-commerce migration can also involve upgrading from older versions of a platform to a newer version or switching from an in-house solution to the cloud-based one. In general, there are three main types of E-commerce migration:

  1. Platform-platform migration involves migrating your E-commerce store from one platform to another. For instance, moving it from Magento to Kartify. 
  2. Phased migration involves transitioning your store in stages rather than all at once. This approach eliminates the risk of downtime and data loss, making the transition smoother and easy to manage.
  3. Monolithic to Microservices migration involves moving from a monolithic platform to a microservices architecture by layering platforms and third-party apps on top of one another. It is done to improve scalability and make it easier to manage your E-commerce store. 

E-commerce Replatforming Success With Kartify

E-commerce re-platforming is a delicate process that requires thorough planning and execution to ensure success. While the benefits of re-platforming are significant, it also introduces various risks and challenges that, if left unaddressed, could result in a loss of sales and negatively impact your business operation. 

That’s why working with an experienced E-commerce solutions provider is essential. For example, with our E-commerce platform Kartify, we have helped over 200+ D2C brands improve their digital footprints and grow sales. 

Here are a few benefits of hosting your E-commerce store to Kartify: 

  1. Seamless Integration: Kartify has integrated with more than 50+ third-party tools and systems, including Payment Gateways, Marketing Automation tools, SMS & Email providers and Order Management Systems, making it easier to manage all aspects of your E-commerce business.
  2. Managed Support: We offer comprehensive support throughout the migration process and beyond. It includes hand-holding during the onboarding process with a dedicated account team, in-house dev-ops, and design experts making it a hassle-free migration. 
  3. Highly Customizable: Kartify is a highly customizable, fully mobile responsive platform. From user flows and layouts to menu and filter options; you have complete control over the look and feel of your store. 
  4. Data Security:  We take comprehensive measures to keep your store and customer data secure by adhering to ISO/IEC 27001:2013 security standards and performing regular security audits with vulnerability assessments and penetration testing. In addition, all data on the platform is encrypted with access control.
  5. Made for India: Kartify has been carefully designed to the tastes of the Indian audience and offers many India-specific features like login with OTP, automatic pincode & city detection, GST Invoicing, and more.
  6. Omnifriendly: By enabling the fulfillment of online orders from offline shops, Kartify provides a unified and convenient experience for customers. With Kartify, you can also conduct offline surveys and offer cash returns, further enhancing the customer experience and building loyalty.

To know more about Kartify and ANS Commerce, request a demo now.

Four Signals That Announce It’s Time To Start Replatforming

In an ideal world, replatforming and website migration projects would happen with months and years of planning, clear-cut strategies, and defined goals. But in the real world, replatforming decisions are not proactively taken. Instead, most of the time, underlying issues force online stores to migrate. 

Below we have listed the common problems driving E-commerce businesses to migrate to a better platform. So check out for yourself, and decide if it’s time to re-platform your online store.

Technical signals for upgrading platforms 

The following technical signals indicate that it may be time to switch to a more advanced platform:

  • Lack scalability: If your existing platform is not able to handle the growing number of SKUs or does not provide omnichannel integrations, it’s time to upgrade your platform. 
  • Subpar site speed & performance: Perhaps your page load speed is low, taking more than 5 seconds to load, then customers are bouncing from your site, impacting the conversion rate. It would be best to start looking at scalable and more reliable platforms. 
  • Difficult to manage: If your IT team finds it difficult to make small changes on the website, such as it takes too long to customize or it is not possible to integrate the third-party tools you wish to partner with; it’s time to look for a new advanced platform. 

Financial Signals  

Here are the cost-related signals you should look out for while analyzing your existing E-commerce platform: 

  • Escalating maintenance cost: Over time, maintaining an outdated E-commerce platform can be increasingly expensive due to security vulnerabilities and compatibility issues that require constant upgrades and patches.
  • Dependency on costly third-party plugins: If your existing platform lacks the necessary functionalities, integrating third-party plugins can increase your operating expenses.
  • High Total Cost of Ownership: A high TCO, which includes the cost of site infrastructure, design, and maintenance, can indicate that it’s time to consider a more cost-effective platform solution. 

Marketing & Sales Signals

Here are the sales and marketing signals that indicate the need for replatforming an E-commerce site 

  • Poor customer experience and low conversion rates: A low conversion rate is a strong indicator that the current platform is unable to meet your sales and marketing goals. In other words, the outdated platform with limited features can result in a poor customer experience that will keep your customers away from making a purchase. 
  • Not optimized for mobile devices: 70% of E-commerce purchases happen on mobile, and Google also has transitioned to mobile-first indexing; this means the mobile-optimized online stores will rank higher on SERP ranking. So, make sure your platform is fully mobile-optimized!

Operational Signals

We have already discussed operational issues like slow site load, difficulty with customizations, and poor customer experience, indicating time to look for re-platforming. In short, if your team is spending more time fixing platform issues, instead of focusing on business-impacting decisions; it is time to consider a better, advanced platform.  

3 E-commerce platforming options that you can choose from

When it comes to setting up an E-commerce store, you have a few options to choose from. Each platform has its own advantages and disadvantages, and it’s important to select the one that best suits your business needs. Here are the three options to choose from: 

On-Premise 

An on-premise E-commerce platform is installed and runs on your organization’s own server. This means you get increased control over your infrastructure, which includes security, data management, and customizations. However, the advantage ends there. On-premise platforming has lost its popularity because of the higher costs involved in setting up and managing it. Complex hardware and specialized technical expertise to manage significantly add to the cost. 

Cloud 

A cloud E-commerce platform is hosted and managed by a third-party provider. The platform provider is responsible for managing the end-to-end software, right from infrastructure to security. This is quite beneficial for store owners as they can focus on other areas of the business instead of being bogged down by the technicalities of the software. The best part about cloud E-commerce platforms is that it is very easy to manage and update the store, even for non-technical users. Our E-commerce platform, Kartify, is a classic example. It offers all the above benefits to its users. In return, you need to pay a small monthly subscription.

Self Hosted

With a self-hosted E-commerce platform, you purchase and manage a cloud server from the solution provider and host your website there. The solution provider is responsible for maintaining the server and its security. Unlike on-premise platforms, you don’t have to purchase hardware or set it up on your premises, which means you don’t have to make large investments in technical expertise and resources. Examples of self-hosted E-commerce platforms include Magento, Opencart, and Woocommerce.

Things to consider before switching to new E-commerce platform

Here are a few questions you should ask yourself while evaluating an E-commerce platform 

  1. How user-friendly is the new platform?
  2. Does the platform let you customize your store to match the brand voice?
  3. Does the platform integrate with other tools you use, such as payment gateways, shipping providers, order management systems and marketing automation tools?
  4. Can the platform scale along with your business and accommodate rising traffic?
  5. Does the platform have any hidden fees, transaction charges, and associated expenses?
  6. How much effort and cost is involved in migrating your existing customer, product, and order data to the new platform?
  7. How is the quality and availability of customer support for the new platform? Do they have a repository of resources available for training and troubleshooting?
  8. Is the platform optimized for mobile devices? Does it provide a seamless mobile shopping experience?
  9. Does the platform have strong SEO features? 
  10. Does the platform provide reporting and analytics to help you make informed business decisions?

Steps to create an E-commerce re-platforming strategy 

Once you have determined the need for replatforming and have chosen the type of platform, it is time to develop a plan for the migration process. Here are the steps you should follow: 

1. Identify your business needs

The first step is to identify the current and future requirements of your E-commerce store. This includes understanding your business goals and how the tech platform will help you achieve those goals. A few important goals for an E-commerce store include the following-

  • Improving sales and revenue
  • Elevating user experience
  • Building a competitive advantage
  • Streamlining data management
  • Enhancing the efficiency of staff

2. Write the RFP

The next step is to draft a comprehensive request for proposal (RFP). The RFP should clearly outline your business goals and the expected features. This will help you evaluate and compare different E-commerce platforms for your needs. Here are some essential components to include: 

  • A brief overview of the project and your business.
  • A clear definition of your business goals or the reasons for re-platforming
  • A detailed section covering technical requirements for the new platform. It must include system architecture and security requirements. 
  • Current roadblocks and barriers to success
  • A list of all the features and functionalities expected in the new platform
  • A transparent timeline and budget for the project, including milestones
  • A clear explanation of all the evaluation criteria used for evaluating the proposals.
  • A description of the format for vendor responses.

By including all the key components, you will make sure that you receive the right proposals from vendors to meet your specific needs. 

3. Estimate cost & timelines

When considering the cost of re-platforming an E-commerce site, it is vital to take into account not only the upfront purchase price of the new platform but also the additional investments required to get the site up and running. These investments can include: infrastructure, maintenance, an in-house development team, surcharges for traffic spikes, ongoing fixes and testing, hosting, security upgrades, performance testing, and custom checkout options, to name a few.

In addition to these initial costs, it is also important to consider the cost of migrating data, maintaining website design and structure, and ongoing site maintenance and security. The cost of re-platforming and ongoing maintenance will vary based on the type of E-commerce platform you choose. 

4. Understand 3rd party integrations and other must-have features

The next crucial aspect to consider in your E-commerce replatforming strategy is evaluating the must-have features and compatibility with existing third-party softwares. This is critical to ensure that the new platform supports your business operations successfully. Must-have features could include any necessary functionality like product management, order management, shipping and tax calculation, customer management, etc. The easiest way to do this is by noting down all the features you use in your current platform plus the features you missed the most in it. 

Similarly, you must also ensure that all the existing third-party tools work with the new platform. The last thing you want is to change these tools and increase the cost of replatforming. 

5. Develop a content and data migration plan

The last step is all about clearly charting out the process for transferring data from the old platform to the new one. Here are the different sub-tasks involved in this – 

  • Start by cataloging all the data that needs to be transferred, including product categories, image catalogs, product descriptions, order data, and customer data. 
  • Understand the data format of the new platform and make any necessary modifications to your existing data. This will ensure that the data can be easily transferred without any hassles. 
  • Find out what are the different transfer options available. You can either opt for fully manual data entry, use automated tools, or a combination of both. Choose one based on your budget and the time available. 
  • Before you transfer the entire data, perform a test migration of a small set of data to ensure that there are no errors.
  • Develop a detailed plan for preventing data loss during the migration. It should also involve backup procedures and other contingency measures. 
  • Create a rollback plan in case the migration doesn’t go as per your plan. 

6. Plan for SEO after E-commerce migration 

After an E-commerce platform rebranding, it’s important to pay attention to your website’s search engine optimization (SEO) to improve its visibility and ranking on SERP. Here are some steps you can take to maintain the SEO after the migration:

  1. Redirect old URLs: If you have changed the URLs of any pages on your website during the rebranding, make sure to use 301 redirects to point the old URLs to the new ones. It ensures that any incoming links to your site will still work and will not hurt your website’s ranking.
  2. Check for broken links: Broken links can negatively impact your website’s ranking and user experience. Use tools like Screaming Frog or Ahrefs to identify broken links on your site and fix them as soon as possible.
  3. Update your sitemap: A sitemap is a file that lists all the pages on your website and helps search engines index them. After rebranding, ensure your sitemap is updated and accurately reflects the new structure of your website.
  4. Re-optimize your content: Look at your website’s content and make sure it is optimized for the keywords you want to rank for. It involves updating your page titles, meta descriptions, and other on-page SEO elements to better match your target keywords.

7. Monitoring site performance after replatforming 

Even though your E-commerce site has been successfully migrated to a new platform, it’s important to stay vigilant for a couple of weeks to ensure everything is working smoothly after re-platforming. During this time, closely monitor your Google Search Console and look for indexing issues like 404 errors, excessive redirects, and 500 errors, which can negatively impact your search ranking. 

Despite thorough planning, there are chances that some minor issues may slip through, so it’s important to monitor crawl errors immediately after the migration and for about a week after that. For example, while you may see a spike in crawl activity immediately after the migration, if this activity continues at high levels, it may indicate the creation of infinite crawl spaces, which can occur when the on-site search function creates auto-generated URLs.

In addition to monitoring crawl activity, it’s also important to pay attention to load speed and response times. Online shoppers don’t want to wait for a slow-loading site, and if your pictures aren’t optimized for fast loading or your CDN isn’t handling the new site efficiently, you may lose potential customers.

E-commerce migration checklist 

You can use this, E-commerce replatforming checklist for a successful migration process:

SEO:

  • All existing SEO links are redirected correctly to the new platform
  • All important elements, such as meta titles and descriptions, header tags, and alt tags, are properly transferred 
  • The URL structure remains consistent and does not harm existing link equity
  • There is no major change in the new website’s search engine rankings and visibility

Data Migration:

  • All customer data, including names, addresses, and other details, are properly transferred
  • All product data, including descriptions, images, and pricing, are properly transferred
  • Al existing order history is properly transferred

User Experience:

  • The new website’s navigation, layout, and overall user experience are optimized
  • The new website’s pages load quickly 
  • The new website is optimized for mobile devices

Integrations:

  • The payment system is properly integrated with the new platform.
  • The shipping module is properly integrated
  • CRM is properly integrated (If available)
  • The accounting system is properly integrated (If available)

Final Thoughts

As technology and customer expectations continue to evolve, it is critical for online store owners to regularly evaluate and upgrade their E-commerce platform and remain competitive. 

To ensure your migration goes as planned, consider switching to a platform that matches your business needs and offers complete tech support throughout the process. 

As an E-commerce marketing agency and technology provider, we can walk you through the process. 

Interested?. Book a free consultation with E-commerce Experts today!