Tag: ecommerce

In this cutthroat world, an effective way to cultivate loyalty is through personalization – the silver bullet to win over the hearts (and wallets) of your customers. By tailoring the shopping experience of each individual customer, you make them feel valued, heard, and connected – ultimately leading to increased sales and repeat business. 

But how does personalization work in the E-commerce space? And as an E-commerce store owner, how do you successfully implement it? Let’s find out. 

What is E-commerce Personalization?

E-commerce personalization is the process of crafting a unique online shopping experience for every visitor who reaches your website. It could include providing personalized product recommendations, displaying target ads, creating customized landing pages, and offering customized content. 

Personalization is successfully achieved by using customer data, such as past purchase history, browsing behaviour, social media activity, etc. The goal of E-commerce personalization is to improve customer engagement, drive loyalty, and ultimately boost sales. 

Benefits of Personalization in E-Commerce

Personalization has become a key strategy for many E-commerce businesses in recent years. Here are some of the key benefits of embracing it – 

Better Conversions

Personalization is all about presenting information you want to share in a way customers can relate to. This way you get their attention for a longer period as people normally focus on things they are invested in. They will end up spending more time collecting information about your products and might even get convinced that it is the right choice for them. When you craft highly targeted and relevant campaigns that appeal to your target audience, you enjoy higher click-through rates and improved conversions. 

Increased Customer Loyalty

By creating a personalized shopping experience, you are showing that you value the customers’ presence. This is the foundation of any strong customer relationship. Customers are more likely to return to your website when they feel that you are actively listening to them and putting in the effort to make their lives easier. This will boost their loyalty toward your brand. They will not only engage in repeat purchases but also become your brand’s advocate and recommend you to others. 

Enhanced Customer Experience 

E-commerce personalization can significantly enhance customer experience by offering a more efficient shopping process. It will make the customers feel like they are always in control of their purchase journey. Personalized content will reduce unwanted confusion, making it easier and quicker for visitors to find what they need on your website, resulting in a better experience. A personalized experience is also quite interactive and engaging to customers as they will be focused on the buying process, leading to a more memorable experience.

Increased Average Order Size 

When you analyze customer data and understand individual preferences, you can suggest complementary products or upsell items. This way, you are not only personalizing the experience of the users but also increasing the average order size of every customer. For instance, a person who has been trying to buy a smartphone can be easily enticed with a back cover or a screen guard, resulting in higher order value. 

How To Start With E-commerce Personalization?

If you are ready to get started with E-commerce personalization, there are three key steps you must take to create a personalized shopping experience that will delight your customers. Here they are :

Segment Your Customers and Collect Data 

The first step is to divide your customers into different segments. Use data such as demographics, purchase history, browsing behaviour, and social media activity to segment customers with similar interests and needs. For new customers, you may want to focus on collecting data such as:

• Demographics (You can make them provide basic demographic information during the sign-up or checkout process)
• Pages viewed
• Time on website
• Items in wishlist
• Items added to the cart
• Exit page

For return customers, you may want to focus on:

• Past purchases 
• Average order value
• Time interval between purchase
• Interactions they had over email and social media

Identify Personalization Opportunities

Now that you have different segments of customers, the next step is to identify the different areas of your website that can be personalized. To do this, you need to answer the three basic questions – 

• Where: Where can you personalize the shopping experience? Consider all customer touchpoints, such as the website, email, social media, and mobile app.
• What: What can you personalize? Consider product recommendations, pricing, promotions, messaging, and content.
• How: How can you personalize? Consider using algorithms, machine learning, and artificial intelligence tools.

When you get the answers, you will be able to identify areas where you can implement personalization to improve the customer experience.

Let Your Customers “Opt-In” to Personalization 

Believe it or not, not all customers want a personalized experience. Some prefer a more general shopping experience, especially the ones who enjoy anonymity while browsing through your website. Data privacy is mainly behind this need. 

Therefore, it’s essential to allow customers to opt-in to personalized experiences. By offering a simple opt-in process when they visit your website, you not only respect the privacy and preferences of your customers but also provide a personalized shopping experience only for those who want it.

4 E-commerce Personalization Tips and Tactics

Achieving effective personalization requires a well-planned strategy and the right tactics. Here are the five E-Commerce personalization tips that you can adopt today –

Personalization Tip#1: Understand Your Customer Needs and Provide a Solution 

Combine the power of technology and human insights to smartly collect clues about customers’ pain points, needs, and preferences. For instance, you can track how customers entered and navigated through your site. If a customer entered your site through a specific product ad, it’s likely that they are interested in that product and may benefit from personalized recommendations or offers related to that product. Club this valuable data with your existing research about customers’ preferences to create an effective personalization strategy.

Example:

• If you’re an online fashion retailer and a customer frequently browses your selection of jeans, you could use that information to recommend jeans or showcase new arrivals in the jeans category.
• If you’re an online grocery store and a customer regularly orders organic produce, you could create a personalized section of your website that highlights the latest organic products and deals.
• If you’re an online beauty retailer and a customer frequently searches for moisturizers for sensitive skin, you could use that information to recommend other products that are specifically formulated for sensitive skin.

Personalization Tip#2: Incorporate Intelligent Search With Semantic Understanding

Every search is different. Some users make spelling mistakes, some use broad terms, some describe the same thing in different ways, etc. All these can make the search function messy, not generate the desired results, and impact the overall customer experience. 

However, intelligence search with semantic understanding is different. It uses natural language processing and machine learning algorithms to analyze the context of the search query and identify the customer’s intent. This will ensure that search results are always accurate and relevant to the customer’s needs.

Example:

A user searches for ‘iPhone cases’. A regular search would return the cases of all models of iPhone. This means, the user will take a lot of time to find the desired product, which will impact the experience. 

However, an intelligent search will know that the user has been browsing for iPhone 14 previously. In all likelihood, they are looking for a case for that particular model. So the search engine will give preference to iPhone 14 cases and display them at the top, reducing the time it takes for the customer to reach the desired product. 

Personalization Tip#3: Segmentation, Profiling and Targeting Of Customers 

A salesman in a brick-and-mortar store has an important responsibility – to profile and target customers by asking relevant questions about their needs and preferences. They then use this information to guide customers to products that suit their individual tastes. Now, this might seem impossible in an E-commerce space, but it is not the case.

You can virtually accompany your customers and profile them while they browse your site and pick up clues on what kind of products they want, their budget, their pain points, etc. To achieve this, you need to embrace machine learning and AI tools that will invisibly collect and process information to match it against your inventory in real time and display the relevant products. Popular tools include Dynamic Yield, Barilliance, and RichRelevance.

The best part about these platforms is that they can pick up information that even a human salesman might have missed while profiling. It does this by identifying patterns in the visitor’s past behaviour or matching customer journeys with buyer segments having similar needs.

Example:

If you are a home decor retailer who wants to promote your outdoor furniture collection, you can create a landing page dedicated to this category and showcase all relevant products that are popular among the target audience.

Machine learning and artificial intelligence algorithms will analyze visitor behaviour, extrapolate buying intent from customer data, and make real-time adjustments to the products on the landing page. For example, if visitors are frequently clicking on outdoor swings, you can boost those items on this page to increase the chances of conversion.

Personalization Tip#4: Retarget Users In-Session Using Personalized Pop-Ups

In-session pop-ups with relevant and personalized information are one of the best ways to enhance the experience of users. You must ensure that the pop-ups are intuitive and not intrusive. 

Time your personalized pop-ups to match each visitor’s in-session behaviour and trigger them via automation. It could be triggered when the user reaches a particular number of sessions or cart values. It could also be based on a particular browsing behaviour.

One way to use these pop-ups is to offer exclusive discounts for a product category they are currently browsing. You can also offer tiered discounts once a user adds a product to a cart to increase the average order value. 

Example:

You are the owner of an E-commerce website selling spices. A customer browses different types of cloves but exits the website without taking any action.

The next time they visit the store, you can use pop-ups to offer discounts for that product category while they are browsing. This will encourage them to proceed to checkout this time. 

5 E-commerce Personalization Examples To Get You Inspired 

Sometimes seeing real-world examples can help inspire new ideas and approaches. Let us explore five E-commerce personalization examples that have been implemented successfully.

TataCLiQ

TataCLiQ, the online marketplace for lifestyle goods is another example of a brand that has nailed the E-commerce personalization strategy. It collects details like the time users spend browsing products, the number of products they look at, whether they’re comparing multiple products with different price points, etc. It also looks at the user’s funnel stage. For instance, from which page did they drop off? How many different product pages did they look at before dropping off?

This data is used to check whether a particular user has the intent to buy. If yes, it triggers the promotion of best-selling products in that category, which helps the user to make faster decisions.

Decathlon

Decathlon, the sports brand, has built an in-house AI personalization engine that recommends products for each individual customer by looking at sports preferences, past browsing history, and purchase history. It also recommends events, training sessions, and classes based on customer preferences. 

Pantaloons

Pantaloons, the fashion retailer, uses real-time shopper behaviour and past customer data to personalize the customer experience. It offers hyper-targeted product recommendations based on regional top sellers and local festivals. It also offers features like complete-the-look recommendations and products that complement previous purchases. The most recent addition is the ‘Style Finder’ feature that lets customers specify their desired categories and occasion to get relevant products recommended.

SkinKraft

SkinKraft is a skincare brand that takes personalization to the next level. It harnesses the power of its customer data to generate customized skin care regimes that cater to the needs of individual shoppers. It asks the visitor to complete a comprehensive skin assessment that asks questions about age, gender, and skin concerns. This data is then used to create personalized product recommendations that are tailored to the individual’s skin type and needs. It also uses the data to develop new products that meet the evolving needs of its shoppers.

Spencer’s Retail

The supermarket chain Spencer’s has also embraced personalization in its E-commerce store. It uses advanced segmentation to divide customers into different buckets: loyal, promising, about to go dormant, etc. This helps them push relevant messages to each segment to reduce the churn rate and improve retention. Spencer’s search functionality has a ‘recent search’ feature that showcases all the searches made by the user previously.

Final Words 

It is quite evident that E-commerce personalization is the key to creating a strong bond with your customers and making them feel valued. By using a blend of technology and knowledge, you can collect valuable data about customer needs and personalize their experiences accordingly. Now that you know how personalization is the core of digital presence, it is time to take action. 

This is where ANS Commerce, A Flipkart group company can help. We are India’s leading E-commerce growth partner and our team of experts has implemented personalization strategies for a variety of businesses looking to enhance their customer experiences. 
Want to know more about how we can help? Book a free consulting session with our expert today.

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?

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?

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

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.

2. 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.

3. 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. 

4. 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. 

5. 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.

2. 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. 

3. 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. 

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. 

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.

2. 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. 

3. 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. 

4. 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. 

5. 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. 

2. 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.

3. 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. 

4. 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.

5. 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. 

6. 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. 

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 – 

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.

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. 

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. 

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.

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.