International customer returns is a key issue for ecommerce retailers expanding their sales into international markets.
However, the handling of unwanted products from overseas customers doesn’t have to be a deal-breaker when it comes to expanding sales. Retailers can use E-commerce marketing platforms to manage returns and solve fulfillment issues.
Firm that manages cross-border returns ReturnBear The solution is ideal. It optimizes the lifecycle of international e-commerce returns by retailers. Customers get a localized shopping experience, while merchants reduce their logistic costs.
It is worth it to expand your customer base in foreign markets. Why not tap into that revenue potential?
The global e-commerce market has grown at a compounded annual rate of 25,1% since 2022. The European market, which is worth $631 billion, has a population of over 540 millions mostly wealthy consumers.
ReturnBear CEO Sylvia Ng says that Canada’s ecommerce market was $82 billion dollars last year. Australia and U.K. were at $30 billion each, and $196 billion respectively.
She said that while merchants could try to solve reverse logistic problems by themselves, they would not succeed if there was no visibility.
“You cannot optimize what you don’t see.” Ng, The E-Commerce Times. “So it all comes down solving the lack visibility in returns.”
“Expanding in new markets does not just mean revenue,” she added. Brand evolution, diversification and gaining an edge in the market are also important.
How to maximize profits by optimizing cross-border returns
How much revenue per year can a business lose if it does not optimize its cross-border return? Ng’s answer is short and sweet: “A lot!”
She added that shipping is expensive, and especially so when it crosses borders. Express shipping labels from Canada, U.K. and Australia to the U.S. are more than 20 dollars.
At this cost, many brands end up losing their margin on the original sale. She noted that if they decide to cover the return shipping costs, they may end up with a net loss.
The retailer may also not be in a position to resell the product. Inventory value can also be lost if the item sold was seasonal or popular.
Ng stated that in order to solve this problem, reverse logistics needs to be optimized and monitored. First, merchants must create a detailed return journey map. They should then consolidate the data into one central system.
She explained that they would want to know the entire return journey including the time the customer requested the return, the time the item was dropped off or picked up by the customer, the time the item was in transit and the arrival of the item at the store or warehouse.
Once the map has been created, merchants can use the insights to optimize their sites.
It Works
ReturnBear, a complete solution for optimizing the process of a merchant’s business, can simplify this process. Ng says that if they don’t, merchants will have to patch together different solutions and spend a lot of time collecting data.
ReturnBear automates the process of returns and exchanges via a portal, which eliminates the need for manual approval and review. ReturnBear handles the rest. The vendor simply needs to define its return policies.
To reduce refunds, the system encourages customers to choose store credit or bonuses and exchange their purchases.
Ng explained that the solution is both software- and logistics-based, which allows retailers to avoid the hassles of creating their own system.
Better Customer Experience, More Sales
ReturnBear is the merchant’s one-stop shop for all return needs, including customer service and optimization insights.
Other solutions are focused solely on financial impacts of returns. For example, reducing costs or maintaining revenue. ReturnBear optimizes to improve the customer experience. ReturnBear offers immediate refunds with no packaging, labels or packages at staff-staffed drop-off sites.
This framework not only results in an improved CX, but it can also increase the sales. The consolidation of the hubs and sites reduces costs and emissions by over 40%.
Ng affirmed that it is a simple, effective, and sustainable way to manage product returns from cross-border clients.
Fighting Fraud and Abuse in Cross-Border E-Commerce
Ng cautioned that managing expensive product returns hassles isn’t the only possible barrier to selling across borders. Unprepared retailers can be killed by abuse and fraud from buyers.
According to National Retail Federation, these two realities caused losses of over $100 billion dollars in the U.S. in just the last year. Ng said that dealing with fraud can be particularly difficult when the goods must cross international borders.
She said that the problem is becoming more pressing as online merchants start to sell internationally.
In October last year, the FTC stated that in 30 years, less than 1 percent of all fraud reports were cross-border. In 2022 more than 11% will be cross-border.
Accuracy is important
Success in cross-border sales is not a secret. For merchants to be successful, they must do many things well.
What works in the base country of the merchant may cause conflict across borders. Sellers need to be aware of cultural differences and expectations. As an example, in the U.K. lockers for returns are common but not as prevalent in North America.
Taxes and duties as well as compliance requirements require accuracy. Different markets have their own regulations.
“Brands have to know these in order to be profitable.” “I encounter many retailers that do not make much sales in Canada, until they learn how to not burden consumers with duty because no one wants to fill out drawback paperwork when they have to make a refund,” Ng said.
Manage costs, customs, and competition in global markets
Offering free shipping to boost sales can reduce profits. Shipping costs may be higher in other countries than the U.S. depending on the population density.
In Canada, for example, the average package of a couple of clothes costs anywhere between 9 and $14 Canadian dollars. Ng noted that in the U.K. it’s much less, perhaps 1 or 2 pounds.
Brands will be competing in different ways in certain countries. She added that it is crucial to fully understand these issues.
FIGS, as an example, sells scrubs and uniforms for nurses and doctors. In some places, health care providers provide scrubs. But in other markets, doctors and nurses buy them.
The language and localization of the product can be traps. There are parts of Canada where French is the main language. Ng suggested that serving clients in their native language would improve sales.
Profits from Best Practices Increase
Ng advises merchants to start their research by understanding the intricacies and nuances of foreign markets. This includes studying cultural nuances and customer behavior.
Canadians, for instance, might prefer eco-friendly products. U.K. consumers may prefer faster shipping.
She noted that the research could help retailers to tailor their offerings and inform their strategies in order to meet specific market needs.
Ng suggested that merchants iterate based on feedback, and re-test if necessary. Many merchants have found it beneficial to first sell on established platforms to gauge local tastes before investing in direct to consumer channels.
As an example, a Chinese retail company might try out Amazon in the U.S. or a U.S. retail company might start with Walmart in Canada. This allows for learning and gradual adaptation.