I’m a shopper. I search, I browse, I buy … and I sometimes return. I know that by mentioning “return” I’m instantly part of the problem for certain retailers I shop with. I’m “one of those customers” – you know, someone who doesn’t follow the perfect revenue-generation model of ecommerce. I’m a margin eater.
In reality, I probably only return one out of every 10-20 things I buy, which, depending on the product category, is around average or even below. So who is the problem? Is it me or is it the retailer that actively makes customer service decisions so it’s not too easy for me to return something? Are they against opening up new communication channels for fear it will encourage more customers to get in touch?
Given changing consumer behavior, I’m surprised when I hear strategic decisions being made that clearly go against the tide of what busy shoppers want. Things like “Don’t chat with customers on Facebook Messenger” or “Don’t make returns too easy.” The inherent desperation behind this mindset is pretty obvious – some retailers and brands are incredibly fearful of being unequipped to actually give customers what they want.
Instead of addressing the fundamental reasons for that, they are effectively sticking their finger in the leaking dam, buying time with their old products, fulfillment and returns processes and ways of thinking. Don’t let all the visionary conference presentations fool you. For every forward-thinking innovator like Techstyle, many more are working hard to resist shopper communication, throwing up barriers in the returns process because they can’t adapt.
If you’re worried about a spike in returns if you make it easier for customers or an explosion in ticket volume if it’s more convenient to get in touch with you, you’re probably not sleeping good at night. It’s only a matter of time before the customers who don’t get what they want just go elsewhere. Very few retailers or brands have truly irreplaceable products, or brand value that can’t be challenged. For everyone else, a single bad experience means you lose a customer for good.
If I was an ecommerce leader at a brand dragging its feet and shunning the new realities of the customer experience, I might be trying to optimize my KPIs for this quarter and next, while also shopping around for my next role. Maybe it’s callous and self-serving but I’m sure plenty of folks operate this way when presented with such large and complex challenges.
Key insight number one: Keeping customers at arm’s length and optimize for this month or this quarter will likely increase the odds of revenue declines in the short term and worst case, Chapter 11. It’s just too easy for customers to run to a competitor. Your products, your name and your history will only carry you so far – just ask Payless.
Key insight number two: running an anti-service strategy is probably the biggest indicator of fundamental issues in your organization, and it’s only a matter of time before your house of cards starts to collapse. If you’re making decisions that lead to short-term KPIs at the expense of the customer experience, then your house is already on fire; start throwing furniture out the windows. You can’t continue to create barriers for customer returns or communications. Their tolerance for this nonsense is at an all-time low.
In 2017, more ecommerce leaders are losing sleep over Amazon than ever before. The common refrain is its juggernaut growth, unstoppable shipping innovations and customer experience driving incredible loyalty. But take a moment to look at your own wagon and you’ll see the wheels are wobbly, the frame weak and the canvas is torn, but you’re trying to drive 60 mph on the highway.
Amazon isn’t winning just because it’s Amazon and brands and retailers aren’t losing just because they’re not Amazon. They often lose because they’re sticking to old ways of selling – converting as many as possible, blocking the path to returns and communication and then focusing on selling more. Kudos to any organization that has built its business this way over the years – what an amazing arbitrage of marketing power, with customers who lack choices or have high switching costs! Thankfully for them, this time has now past if you sell anything like what’s available on Amazon. Even insurance and banking companies are realizing the times they are a-changing.
If your customer service team is pushing back on Messenger because of increased ticket volume, you have a strategic problem. If your ecommerce team is pushing back on automated, self-service returns because of increased return rates, you have a strategic problem. If your operations team doesn’t want to know about real-time tracking or customer questions during shipping, you have a strategic problem.
It’s time to start solving this.
Perhaps these departments have to focus on their KPIs in order to stay alive this quarter. But you have to ask yourself how long the finger in the dam will hold, and if those KPIs are a true measure of current and future business performance in the face of rapidly changing shopper expectations and behaviors. Spoiler alert: They aren’t. The time to adapt is now, unless you want to soon be applying for a job at that smiley-faced juggernaut.
Fang Cheng is CEO of Linc Global