Retailers invest significantly in marketing and advertising. In fact, over $66 billion is projected to be spent in 2023 on digital advertising alone. But, regrettably, often the marketing strategy focuses only on top-line sales. Marketing and advertising can be elevated to include so much more than that!
E-commerce retailers should consider expanding their marketing strategy to encompass sales and returns, regional growth, customer retention, and more. Why not use your own data analytics to gain every advantage possible?
With the insights provided by your returns data, you can do just that.
We've explained in previous blog posts that your own returns data offers incredible information related to virtually every aspect of your business. Analyzing the data provides actionable insights on your products, suppliers, customers, and more.
The insights gained from your returns data can even help shift and optimize your marketing mix.
Perhaps your e-commerce store utilizes a brand influencer program, for example, and you plan to invest heavily into that program in the coming year. But then, thanks to our ability to predict returns by channel, you're informed that your influencers have the highest return rates of all your channels. Now, you can decide whether to invest as much as you planned, or analyze and act on why this channel is driving such high returns.
This is just one way to use returns data to inform marketing spend. Analytical insights gleaned from your own data can and does provide incredible business information. Your returns data informs your marketing strategy by pinpointing where, when, and how to advertise your products, and will lead to customer growth and retention, too.
When analyzing the returns data of our retail partners, we uncover which products are sold, canceled, and returned – and why. For example, we know that fit and sizing issues remain the leading cause of customer returns, with close to half of all retail returns being driven by these issues. And often, these problems can be attributed to a certain brand or style of product.
So, one aspect of our dashboard is the ability to look closely at how certain brands and styles perform. We're able to explore a retailer's returns data based on specifics, such as individual brands or product styles they carry, and discover which items are performing well and which are being returned at a high rate.
Additionally, the returns data pinpoints which brands and styles lead to customer growth and retention, and which of them lead to loss of customers and profit. This insight can help you decide which brands and styles to focus on in marketing campaigns and promotions, which brands to feature on your website, and which to de-prioritize.
Why invest in advertising brands and styles that inevitably lead to profit loss?
We recently uncovered nearly 50 brands that were causing substantial loss in profit for one of our retail partners. We were able to pinpoint which brands were in fact profitable and which were not, and we advised this retailer on how to move forward. This retailer can now reconfigure their marketing spend to leverage the discoveries that arise from their data.
For retailers that carry multiple brands, this insight is invaluable.
Perhaps you're a retailer that carries a particular item or style of clothing that appears to do well in sales. It's consistently flying off of the shelves, so you heavily advertise it on your website. But when analyzing the returns data, we find that this particular piece has an extremely high return rate – so high that this item is actually leading to a significant loss. Should you continue to prominently feature this item on your website? You may consider highlighting an item that you know will be profitable, instead.
Additionally, your returns data indicates which brands and styles are more popular in certain geographical regions than others. You are then able to adjust your marketing strategy and use this information to your advantage.
You might find a reason in the returns data to change your marketing campaigns to feature certain brands and styles where they perform well, or change your current strategy based on data that proves where certain brands and styles are being returned at a high rate.
Why allocate marketing dollars to brand campaigns that aren't relevant to a certain region?
At Returnalyze, we find that not all regions are equal, and the returns data often indicates growth in new categories based on geographical location.
This is another element that we like to pinpoint in our intelligent dashboard. Users of our dashboard are able to group customers by region, customer loyalty by region, returns by region, and more – all related to geographical location.
You now have a unique ability to leverage this information. Perhaps you’re looking to improve customer growth in a particular geographical area. Your returns data will indicate where exactly you'll want to focus your marketing campaigns, and how to allocate your spending.
Your returns data also provides incredible insights to when and how you should market certain products and launches.
At Returnalyze, we help retailers predict the performance of their products, so that they can act quickly and make adjustments to the product quality, website details, and marketing strategy. When it comes to launching new products, wouldn't it be nice to know how they are performing earlier, rather than later?
With our returns analytics, we have a unique ability to alert our retail partners if a new product is going to be a poor performer. In fact, we can let a retail partner know after just 15 returns that a specific item is going to present issues for their business and should be investigated.
Your returns data also provides marketing insight based on seasonality, which extends to specific products. Some items are more likely to sell during a certain time of year, while others will sell year-round. Taking these details into account can drastically help you plan for when products spike and dip in sales and returns through the year, and adjust your marketing campaigns accordingly.
We've mentioned how brands, styling, and geography affect customer growth and retention. We know that certain brands and styles will perform better in particular regions, and will see more customer growth and retention based on the relation of that brand or style to a given area. The performance of a high-end snow boot sold in a high elevation region, for example.
This is all to say that every road leads to customer experience, and relates to customer growth, retention, and loyalty.
Aspects of brands and styles lead to customer dynamics and more, and geography relates to customer growth and more. These elements affect your customer experience and the relationship that your e-commerce shoppers have with your business.
And like the other aspects we've covered here, your returns data will tell you a lot about your customers, including first-time buyers and repeat customers. For instance, we've found that customers who return their first purchase are less likely to buy from that retailer again, and that nearly a third of repeat customers would leave a brand because of a bad returns experience.
So, when considering marketing spend and strategy, keep in mind that website details such as accurate sizing notes, high-quality photographs, extensive product details, and a clearly displayed return policy, are all important elements of an elevated customer experience.
Your returns data will also inform marketing strategy on regaining lost customers. Remember that first-time customer who returns their first purchase? You may not have been aware of them before examining your returns data. Now, you can reach out to this customer – through an email campaign, for example – and offer perks or promotional incentives for them to come back to your brand. You've not only resolved a bad customer experience, but you've also improved customer retention.
At Returnalyze, we specialize in data analytics provided by retail returns.
But we like to remind retailers that the business insights provided by your returns data extend far beyond predicting and preventing your unwanted returns. Our dashboard and partnership informs retailers about practically every angle of their business, including their marketing spend.
We're not just offering the data insights with our intelligent dashboard, though. We exercise a hands-on approach to our partnerships with retailers. Our team of experts knows exactly how to help your business move forward with the information uncovered by your returns data, and we provide actionable insight with every data point.
When we discovered that one of our partners was losing tens of thousands of dollars due to unprofitable brands, we counseled this retailer on rerouting a portion of their marketing spend to the brands that ensure profit. Having the discernment between what is profitable and what isn't, means this retailer can choose how to advertise.
We pride ourselves in this holistic approach to providing software with a service, and we thrive on discovering invaluable and actionable business insights for our partners.
How can the insights to your business's brands, products, regions, and customers benefit your own marketing strategy? We invite you to find out.