TRANSCRIPT
This transcript was completed by an automated system, please forgive any grammatical errors.
SUMMARY KEYWORDS
retention podcast, customer retention, retail industry, strategy consulting, SaaS side, brand experiences, technology evolution, product strategy, customer support, return policies, shopper trends, return management, sustainability, inventory management, personalized returns
SPEAKERS
Mariah Parsons, Casey Chroust
Mariah Parsons 00:00
Music. Welcome to retention Chronicles, the retention podcast for E commerce marketers. I'm your host and fellow e commerce marketer, Mariah Parsons, tune in as I chat with E comm founders and operators all about customer retention. Think marketing ops, customer success and customer experience, we cover it all and more. So get ready to get real with retention. Here is our newest episode. Hello everyone, and welcome back to retention Chronicles. I'm psyched to have you here. Casey, thank you for making the time. It is going to be a great, great episode. Let's start by saying hello to our audience and then giving a quick background of yourself. Yeah,
Casey Chroust 00:46
thanks, Mariah, great to be here and all the listeners out there as well. My name is Casey crost. I am Chief Operating Officer at optora, which we'll get into a little deeper. But I have 25 plus years in the retail industry, spent 10 of those doing strategy consulting for retailers, and really ran the gamut from all aspects of retail, and even spent several years working overseas for some different retailers. And then spent many years for rela, the Retail Industry Leaders Association, which is the top trade association for all the leading brands and retailers of America. They all get together and talk about, you know, innovation, problems and issues and the latest and greatest current events and all their executives. And that's who I really, really worked with. And then went into the venture side of retail for a little while, which then ultimately brought me to optoro, which is, at the time, was a small venture backed company focused on returns. And since then, we've grown and become a leading technology player for returns, which we'll be talking about today. And it's been a been a great journey along the way. And so all of your listeners that live and breathe. You know retail and you know brand experiences. I'm with you, and you know, excited to also be on the journey you're on as well. Love
Mariah Parsons 02:10
it. Love it. So let's pause for a second, because obviously, like you just laid out, you have a lot of experience in retail and just different areas of retail, so I'd love to hear your opinion on going from more of the strategy side, like working directly with brands, and then jumping into the, I don't want to call it like back end, but more the SaaS side of things, right? So seeing, like, the differences with working for a brand than a tech company, what was something that you know you were maybe excited about to see how the SaaS world works, because this is where my background is, but I'm obviously always curious about the brand side, and that's part of the reason I have this podcast talking to brands and tech, because there's a lot of partnership, obviously, But there's a lot of differences between the two industries that both sit in retail. So I'd love to hear your experience from jumping from the brand side to the tech side.
Casey Chroust 03:10
Yeah, you know, on the brand side, I really loved just being on that the pulse of things, and really, you know, connected to the shopper in a very, you know, intimate way and what she is doing and, you know, and I think I especially enjoyed so many of my executive interactions, you know, talking with whether it's, you know, whatever C level executive in the space I was talking with, really spending time about their problems and, you know, their thoughts, and bringing to them the latest innovations and what was going on. I always found that incredibly enjoyable. You know, one of the things that I did miss a little bit, though, was, you know, hey, I was really, you know, the classic, you know, hey, master of master of nothing, you know, you know, but good at everything, master of nothing, so to speak. And you know, as I worked around so often, you have to really pass the baton to those brand partners and those retailers to execute the strategy you're really sharing to do, and then how you go on to your next retailer, your next set of executives, to really give them your learnings and the things it is. And so you don't really get to complete the job sometimes. And that's actually something that I've, you know, those two things I've really enjoyed going over to the tech side of the house, where really being focused on one problem and really just being incredibly immersed in that area, and then, you know, two really seeing it all the way through, you know. So we work with people from, you know, we really revolutionize kind of how they're managing returns and to make returns a growth channel. And so really, that end to end journey with with retailers. We're still very connected to retailers, obviously, you know, implementing our technology, that's been, been a lot of fun and and then they probably close out by saying other things been really enjoyable is just how Tech Tech is changing, and it's just evolving so quickly out there. You know, we could have our own separate conversation about, you know, Gen AI that would, you know, things that are happening. Happening, you know, to us and with us and around us, and but that has been really, really enjoyable to the tech space. You know, it's been over 10 years for me that I've been in tech maybe 12, when I was on the venture side of it, it's really evolved, and it's been very dynamic, and it's moved really quickly. And, you know, I feel like every day is like, hey, where, where is this all evolving to, and where are things going? And so really, you know, from a product strategy standpoint, of what we're trying to do as a tech shop, is like, how do we anticipate and really to continue to add values for our retailers and brands, and really have capabilities of where the industry is going to, where we're kind of there first to support them. And so spend a lot of time really thinking about that. And I find that, you know, very enjoyable and worthwhile.
Mariah Parsons 05:45
Yeah, the strategy side of, you know, your your strategy consulting for the brand side, where you can have this zoomed out, higher, higher picture, bird's eye view of, okay, where do we want to go next, or where, you know, based off of what we're currently seeing in the market, and all, all different signs of, you know, where, where you want to go from the brand side, but then also the tech side. And I agree it's definitely on having Tech experience, seeing how quickly you can pivot and drive really what your customers are asking for like that is the most exciting part about technology. And I haven't been on the brand side of things, but seeing secondhand how a lot of brands have maybe a little bit more, you know, just more red tape, or just depending on the size of their company, obviously, but we're focusing on brands that you have worked with, they just have, like, you said rungs that they have to pass things up the ladder to and have to get more approval. So coming into something like opturo, where you're able to say, like, Okay, I'm gonna, you know, this is a project that I'm starting, and I know I'm gonna be able to finish it, or at least see majority of the project is a fun place to be, and it's very exciting. You
Casey Chroust 07:02
know, Mario. It's also interesting too, and it's fun where, hey, you're helping make software recommendations for them to save millions of dollars, or whatever the case may be, or to leapfrog some of the competition. And hey, here's the companies you should look at sometimes, or even helping guide them through those decisions. And now it is interesting being on the flip side of it where, you know, Hey, you are the one to get selected. You're the one now that has to come in and really help them implement to what you're trying to do, to really realize that value. I think that's that's kind of been a fun transition. And it's also, you know, hey, you're helping someone, you know, make a recommendation different than like, hey, buy me for this, because I can really help you in these areas, which has also been kind of an interesting and fun pivot, yeah,
Mariah Parsons 07:45
yeah, for sure. And it is very rewarding to be able to have that working relationship where you have a customer, a brand, onboard tech, and then you can, you know, try, try your hardest, to make sure that they have a great experience, and maybe be able to help their team in ways that you know, like customer service is a huge, huge, huge concern for us, as I imagine for you as well. There's just so many tickets that customer support teams get around shipping and around returns, and it's it is just a whole whirlwind. So it's like, if you as a tech company, can alleviate some of those concerns, or alleviate a team who is just like swamped from different inbound inquiries. It really is a rewarding thing to just hear, you know, sometimes, every now and then, just get like a comment from a customer of like, this is really helping our team. That's the cool part about tech, because there's just the innovation on Okay, should things be this way? And if they shouldn't be, how should maybe they look? But we're getting ahead of ourselves. So tell our listeners about optarro. Give a boiler plate. Just tell us a little bit more about what you brought you to opt Toro, why you're excited about it. And then, obviously, what you all
Casey Chroust 09:02
do, yeah, may, I'll start with kind of what we do, just to give some context, is no optoro is, you know, the leading return software company. So if you think about the life cycle of returns, from initiation in a portal or a store, you know, all the way through to that the return methods that are being chosen to the processing of return say, when that return actually gets back to a warehouse or a distribution center and then on into the ultimate, you know, we call it the dispositioning of that return. What happens that return? What's the best home for that return? And there's so many different myriad choices that where things can go. And so our technology, our software, we are really providing not only enablement across that, but decision making of what should happen to returns in every point and every node on that returns life cycle. And it's really using technology, really to turn returns from kind of a defensive posture, right? Into an offensive weapon. And how can you know retailers and brands really use returns to differentiate from competition with the shoppers and turn returns into a win. And so that's, that's what we do, and we can kind of get more into some of the, really the things we see in the industry that might be interesting to to your listeners. I would say that, hey, why? Why I got in the space, you know, you go back 15 years and said, Hey, Casey, that company with returns, I'd be like, What are you talking about? But what? What really kind of drew me to it was about 10 years ago, a little under that where, you know, I talked to, you know, talking about my background. I'd spent so much time talking to, you know, leading executives in retailers and brands across the entire industry, and you name the major retailer, I had talked and spent time with their executive, you know, listening to them, but also, you know, coaching them and guiding them and and then all those different conversations that I had over all those years, not once had I ever had a single conversation about returns. And when you look at the size of the problem out there for returns, I mean, I'd have to go get the latest stat. But, you know, it's like, I think this, this year it'll be, you know, returns is almost a $750 billion problem. In the US alone. And when you just look at the enormity of that, really the potential to help solve that problem was, it was very compelling to me. And it was like, Hey, I would love to get, like technology to really change the game on how returns are done. What? What an amazing opportunity. You know, what was, what was interesting, Mariah, you know, on that journey, though, when I first started, you know, I would say I probably spent the first five years of my time at atoro, educating retailers and brands about returns. You know, most of them viewed it as a cost of doing business, or, you know, an evil that they just had to go, you know, handle and so really educating them on why returns matters, how it can be used to drive, you know, customer satisfaction, customer loyalty, you know, higher AOV, you know, shopping frequency, I could get down the list of things. And you know, really, that your listeners, you know, really, really enjoy when it comes especially to retention, you know, customer attention. Those were all my conversations when I first started. What's been fun is over the last five years, my conversations entirely, you know, shifted now. Now retailers and brands are coming to us saying, hey, I want to improve returns. I want to change my strategy on how I approach it. I need a technology provider, just like I have technology in other parts of my business to run, you know, manage retail, I now need technology to help me with returns. And it's really been fun to see that transition and that, you know, maturity of that approach and that view take place, you know, over the last, you know, several years.
Mariah Parsons 13:06
Yeah, I'm so glad you bring that up, because I think it is a great, great, great call out that returns and just how returns have been viewed is changing, and I think that's where a lot of the innovation in tech is coming into play, right? Where, the first couple of years, you have to make sure that people know what you're talking about when you're like, Okay, this is a tech solution that is going to make it easier to manage your returns. And we see this on the Malomo side of with order tracking, especially branded tracking, right? And so you're taking something that is historically just been a carrier page, like a white, blank page with a tracking number, and making it so that it plays better into customer retention. You can have cross sells and upsells, and you know, your own specific brand tone and all those things, and it makes customers work more willing to shop with you the same way that returns and a certain return policy will make customers feel a lot more comfortable spending money, especially if they're the first time, if it's the first time they're shopping with a brand. I know myself as a consumer personally, I will check that return policy as soon as I see something that I want to buy and see what it is, because that definitely differentiates between, okay, am I going to comfortably buy this, even if I'm not sure it's 1,000% what I want or need, but I'm covered by that returns policy? Or is it like I'm going to keep investigating other people in the field? Because there is no, you know, easy or free returns policy for that, for that brand, and it really the difference. Yeah, I
Casey Chroust 14:42
love it, Mariah, and I think you're exactly right. I think, you know, if you think about, think how much time retailers and brands think about no shopping conversion on their site, and you know they're different, you know, product pages and, and you know how they're going to drive traffic to the site. And really convert that shopper. And then, you know, had this amazing unified, you know, experience across their whole brand. And then they just neglect to think about how the returns and the effect of returns happens on that same experience. And to, you know, to bring up to life, you know, your point, we've got a every year we release a study. It's called returns unwrapped. You know, a little play on of the words there, because we're going into holiday here, and right after holidays on the forward side is then peak returns on the reverse side. And so we do a study. It's called returns unwrapped. Encourage everyone to go out and take a look. It's coming out next week. And so we put a lot of energy and research into different shopper trends and retailer trends, and so we can, I'll bring a few of those little nuggets today, but one that was exactly what you just talked about, which is, hey, checking out that return policy our latest status, 84% of shoppers admit they've decided to buy from one retailer over another, purely because it had a better return policy. I mean, that's a huge, huge number, if you think about that in the context of how much time you're spending on the front end of things, and then the same concept of the back end of returns, of the power it can do again, to bring it to life a more negative, you know, stark reality for some people, no, 80% said they've stopped shopping at a retailer because they changed their return policy, you know. And that that stat actually, we track it every year, you know, it's up a third over 2023, so more shoppers now are are really from their expectations, their shopping behavior. Are looking more at return policies, and that returns experience to really affect what they're doing on the front end and where they're actually shopping and buying.
Mariah Parsons 16:48
Yeah, yeah, that's those are great stats. Thank you for sharing. And we'll link because by the time this episode is live, we'll link that in the show notes the report, so listeners can get it quickly. But I would love, I think this will transition nicely into you alluded at, you know, some of the things that you see in the industry. People always love to just hear industry talk. It's one of the most asked questions I get, just being in this seat of, what are you hearing people talking about? And obviously, we're recording this, if listeners can't tell right before Black Friday, Summer, Monday. And so I think it would be so interesting to hear your perspective, knowing that that peak return season is on the horizon, you know what you're seeing from the industry. Because, like you said, those those stats are powerful, and it's something that is not, I think, as at the forefront of brands, brand operators minds when they're like, Okay, we just need to get that conversion. And then you, you know, you're so elated that you had x amount of sales during Black Friday, and then it's like, okay, but how do you make sure those holiday shoppers are retained, even if that means, you know, next holiday season, they're shopping with you again, because they were, you know, glad that everything went well. So I'd love to hear, yeah, from your perspective, what you what you all are seeing in the industry?
Casey Chroust 18:05
Yeah, I'll cover several aspects of it a high level, and kind of dig down to some of them, you know, I think the first theme that I'd really, you know, impress upon everyone out there, you know, up to where we have a saying, you know, returns don't have to suck. There's a little bit that's at first. It's a mindset, you know, if you really feel it like it's a cost of doing business, I would say the first trend that we work with our retailers on really confronts a little bit of that myth. And I think there's a falsehood that high returners are like bad shoppers, and I think what they're neglecting to realize is that your highest returners are often your best shoppers. You know, of course, and it makes so much sense you're buying more from a retailer, they're going to return more. And so you really have to look at at their total value. You You know that hey, whether it's CLTV or even just hey, what they're they're shopping and purchasing behavior. It's not just hey, what's their return rate and what's my overall return rate? And really it gets into, you know, getting away from, like, a one size fits all is really kind of a key trend for returns of where we're going. But if you think about it. If you can create going even back to linkage to the front side, if you can create a great returns experience, if you can make it easy to return, it fast to return, you can prevent a lot of key problems that are, that are emerging problems right now, one to one. And this is all positive side. You want shoppers and your customer base to take more risks, right? And so if they know that it could be fast to return, easy to return, it's not some big, huge hassle, which so often it is, right, they'll take more risks with you. They'll try like, you know what? You know that I don't know if I should buy it or not. Maybe it's not quite my style. You know what? They know it's going to be a huge, long. Long, painful returns process that weighs into their thinking. But if they're like, you know, what, if I don't like it, I'll just send it back. Super easy, super problem, they're more willing to try it and try something new. And retailers who really get this are leaning into that, you know, some of those truths, and stripping out some of the myths at the highest level. So I'd say that's, like, one of the biggest trends and just kind of insights overall where things are going is this pivot in terms of a mindset around returns. That's that's the first one. The second one does start to get into shopper behavior and expectations. For sure, you know, we are seeing wardrobing and bracketing on the rise, maybe for some of your listeners who don't know those terms, you know, wardrobe is where they they buy something, they wear it, and then they return it in hard goods. It could be, you know, somebody buys something for a weekend project and uses, you know, a drill or whatever, and then returns it. But it really they buy it for the intention to use it and return it and not keep it. And that's this wardrobe in concept. And the other concept that is on the rise of an industry term is called bracketing. And bracketing is where you buy multiple sizes or items of the same same SKU, same item, knowing that you're only going to keep one of them. Like, you know what? Am I a size 10 or am I a nine or an 11? You know what? I'll buy all three, and then I'm covered, and I'll return the two I don't want. Or, like, you know, I don't know if I like these three, these three colors, I'm gonna buy all three and see which one I want, and then I'll return it. That that's the concept of bracketing, and that trend is also on the rise. A lot of customers and shoppers are doing that today. And so really, you know, those are problems, and we are, through our technology, really working to really address some of those things. You know, where it really gets into of a trend is, is, you know, staking some of the 360 degree views of customers on the front end of shopping you're trying to do through, you know, CRMs, or whatever the case is, with, you know, really trying to have this view of your shopper, and really it's, it's connecting all your returns, data and visibility to that, and that starts to matter, and what we see and where the really where, where it's going, is really a concept of personalization, where, instead of one size fits all, hey, if a retailer, a consumer, a shopper, you know, maybe they have a pattern of bracketing, a pattern of, you know, this wardrobe, where they're returning things that have been worn and used, they have a higher cost to to retailers. And so sometimes you can start to implement like, hey, what I'll do is, you know, I will charge them for a return, and somebody who is a loyal customer, who has great loyalty, maybe everything is free, and I'll give them, you know, home pickups as an example, for free, and someone come pick up your home package. And so there's this concept of fraud and abuse and a healthy shopper. That really is a second theme, I would say a third theme, really, in this expectation bucket, gets into what I was just starting to return to, and that is a return methods today and how people are viewing everybody wants to be able to go online and seamlessly make a return. They want to be able to make an exchange. I say, What's cutting edge that we're focused on, and we do is also to make buy something else immediately. You know, it's all too often that the old school method, Mariah, is you have to wait till that product got back to that warehouse and received and checked. And now we'll, you know, give you your refund, or we'll, hey, send out your exchange item. And we think that is penalizing shoppers for, you know, especially those that warranted. And so we're using data to really reward your good customers and shoppers. To give them an instant exchange, I will send out your new item. Now, before you even return it home, I will actually refund you your money to go buy something else entirely. Now, instead of waiting till that product comes back, because you have the data on that consumer to really be able to get into there. So just think of the power of that again. And it's, it's this theme of like, hey, how do you take the returns in the back end and really drive forward sales and forward activities, and then on that shopper experience side? Okay, now that I'm gonna have to return that. How do I make it easy? We call it frictionless and easy. Hey, sometimes you want to insert some friction for for unhealthy shoppers and abusive shoppers, but then it is good to have it be you want to be frictionless for your best customers. And so there's a concept of really boxless and labelless returns, where you're taking a QR code. Hey, we are now delivering the Amazon experience for everyone. If you haven't done it, definitely do. But hey, you get a QR code, you take it into a third party drop off location, and you just hand them the item and you get your refund. How clean is that you don't have to package it up, tape it, box it, where? Hey, where's a box? Where's my tape? Where's my supplies? Oh, my printer. And out of ink, I don't have paper, I can't do a label. Oh, man, so many it is. One of the biggest frustrations of shoppers, is for. Returns actually is printing a label and finding a packing machine and so really getting to this box list, label less experience is where it's all at and where it's going and what you need to be offering your shoppers. And we're also doing it for those people have stores the same concept. Why should you go back? How frustrating is it when you're waiting in line to buy something and someone is taking forever in front of you to make a return, or even worse, you are that returner that's waiting in line here. You're already a disappointed, you know, shopper and customer. You're unhappy with whatever happened, and now I have to wait in this line to make this return. I get up to the cash wrap, and I have to spend all this time for them to find my order and refund my order and this and that, and it's just like it's costing me time, and it is frustrating, and it's a terrible experience. And we've actually extended some of that same concept to, you know, we've released new products that extend to the stores, where you can go into a QR code and boom, hand off your item. You go, and off you go, on your way. It was already a bad experience. Let's not make it a worse experience by making them the making the returns process and more painful. And so really, those are some of the key things really, we're thinking about on the front end. And I'll pause there, because then there's a whole bunch of trends, interestingly enough, on the back end too, like, Okay, once that returns back, what do you do with that return? But I'll kind of stop there just, just just to let you ask some questions or about any of those trends, really, on the front end, side with consumer, you know, with with shoppers and consumers, and some of those behaviors and the technology, and really where, where the industry is going, and those things I told you are, are, hey, if you're not doing it now, it is the way of the future here in a short amount of
Mariah Parsons 26:38
time. Yeah, no, I love it. You laid it out in such a concise way that I know our listeners are going to love hearing about the like consumer side of returns. And I think what you said first, I'm going to try and go through my thoughts based off of how you laid them out all out first, with the example of just seeing, you know, like returns don't have to suck, which I think that's a great, great tagline for you all seeing like, based off of the AOV, what someone is doing, and making sure that they're, you know, if they have XYZ pattern of shopping, then you can customize, customize your returns policy to make sure that it's, you know, working Well for your brand, and you're not just throwing out, you know, one, one size fits all, but then you can also make sure that your consumers aren't pissed off when they're shopping with you, right? And so I know we're going to get into the back end of that, and seeing, you know, the trends. How do you actually even attempt to make something that is not a one size fits all returns management platform. And for the second point, I loved what you said about that you with the and I had actually never heard the terms of wardrobing Or, what is it? Bracketing, okay, and so, and like, having those terms is just one helpful because I'm like, I've talked about this before where it's like, Okay, someone, I've definitely been the shopper, where I've looked at size guides and, like, measured myself, especially if it's something that's a higher AOV product, right? And so I've given this example before on the podcast, but bridesmaids dresses and so it's like, something that you need to fit well, it's an higher AOV product, and this certain brand that I was shopping with had a size guide, and I ordered the dress based off the size, and it wasn't the right size and so and they don't have an easy returns platform or policy. Now, being in the space, I know the power that customer support and messaging them and trying to work with them can have and just being friendly about it. Like, I will put that caveat in customer support, they see so many complaints a day, so it's like, if you can be that one person, where it's like, hey, understand it's not your fault, but I do need help fixing this. And they were so friendly about, you know, understanding that the size guide wasn't like, I followed it perfectly, and it just wasn't, it wasn't going to be right for me, and so they had said, you know, don't worry about it. Keep that one. We'll send the next. We'll send the other one. And then you can compare and contrast, see if you need to get alterations or whatever, because you're not the size guide isn't working for you. So I bring up that point of something as easy as the like, the, I guess, the negative side of like, someone who intentionally is like, I'm going to wear this or just use it once, or that's wardrobing, I believe, of like, okay, I just, I'm gonna buy this, like, almost like a rental is like, how they're viewing it, um, and then someone who's on the flip side being like, Okay, I don't know which one will fit me best. So I'm going to order two. I think there's like, Oh, there's the bad intentions and then the better intentions, right where it's like, okay, I want to use this product. I just don't know which one is going to be for me. And that's one of the struggles e com storefronts have to struggle with. But if you can get and see like, Okay, talk to this. Customers, is there just no sizing guide so they have no idea, so they have to order multiple items, or is the sizing guide not accurate? Or is it not easy, like all those little things that might also, you know, not be actually related to returns per se, but it's involved in the process and then influences your returns policy or your returns management, because you're going to see, if you know, you don't have a sizing guide or the sizing guide isn't accurate, um, you're going to see an uptick in your returns, and then it's down the line and all that fun stuff. Um, so I'll pause there, because I that was one of the things where I was like, You are hitting it on the head, um, and I was like, I just went through this of like, the sizing guide was right? There is so easy for me to use, but it was just wrong, like, I just it didn't work for me, at least so.
Casey Chroust 30:48
And if you think about that, so again, you and then it happens, right? Especially, you know, think you know, especially for, you know, e com listeners out there, where you spend all this money to try to get someone to your site. You spend all those marketing dollars and this experience to convert them. And then sometimes it happens, sightings guide, something's wrong, so you want to make them that experience so frictionless for them to have it do that. But then you've got someone else. Hey, you know they're going to buy 10 dresses, and you know, for this, for the weekend, they're going to keep one of them. And, you know, it starts to get a little bit abusive, and you're trying to really understand some of those things. And that's where retailers are getting smarter. But you really have to balance this thing between, you know, the last thing you want to do is it's like, kind of like game theory of the justice system, you know, where, hey, you'd rather have somebody that's that's guilty going free than someone who's innocent. You know being charged. You know being being guilty. And so you really have to take the right mindset too. But there's so much power right on lock. You mentioned AOV as a perfect example. Um, you know that is one of the powers we're talking about when you're doing this instant exchange or an instant repurchase on the site. So here I am. I'm on especially for your online e com. You know, execs out there that are listening in you spent this time here. They're on the site making a return. Why would you try to convert them back into a Ford shopper? And what you can do, and that's part of the value of giving them an instant refund again, if their data shows it, you know, it's just like, you know, a gift card, they're going to spend more. Okay, I've just got, you know, 95 you know, $100 to spend. And you know that $100 I'm kind of almost treating like free money, because I've already, like, budgeted for it, I've already paid for it, it's
Mariah Parsons 32:34
already gone. For the credit card, it's
Casey Chroust 32:37
already spent, and so now I can go spend it on something else, and you're saving the sale, essentially, is what you're trying to do. And then even more, you actually increase your AOV because they're gonna take that $100 and you'll be able to spend it exactly $100 so often, it's like, you know what? I'm gonna buy something that's $150 and you just had that AOV increase and save the sale, and you made them a happy customer, because they're not having to wait for, you know, two weeks to get a refund on what they want to do. I mean, these things compound, and you start to create a virtuous circle with returns, instead of what it is today so often, which is like a vicious circle. It's like compounding things, one after the other that frustrates you with with returns. And that's really where you're you're trying to get but, but you have to be smart about it. We have this concept of data and visibility, where it does tie to the back end, you know, to bring it to life a little bit, you know. And I won't get too much into stats. We can. We can talk shop a little bit more, but I found this stat really, really interesting, which is, 76% of shoppers admit they've embellished or exaggerated. The reason for making a return if it meant avoiding a fee or insuring a refund, right? So shoppers are smart. They know what's happening, you know, they know what's going on. And so then this where it starts to get into, you know, our returns and management system. And then that's kind of a new term we call an RMS, you know, we've really worked to kind of help coin that term. And you know, for those who are more enterprise retailers, you might have a WMS, a warehouse management system, an OMS, an order management system. You know, it could go down. Hey. TMS, a transportation management system. Well, we're having this concept of a returns management system, which really gives you end to end visibility of everything across that returns journey. And that is the same thing. Just because a shopper said a reason they're returning it, when that item gets back, then you have visibility into what's the real reason they returned it. You know, was it not new? Was it wrong? And then you start taking all this data, Mariah, in your case, around return reason codes, where you can start to really see, like, Hey, I've got a higher routine. Say, too big, too small. And you can really use that data to start to trigger your merchandising teams to go start and your Hey, your marketing and product marketing teams to get out there and start to take a look at items, really, to see, like, hey, something's wrong here, you know, I've got an anomaly where this return rate, or this return reason code of too big, too small, can start to go there. And you already see people starting to use, you know, consumers, to do this, where, hey. So you can mark whether it's there or not. And hey, some some companies have better success than others at that. And I think that customer data is very valuable and big advocate of it. But also, I think a retailer or brand has their own responsibility to be really doing the data science around those return reason codes even better around what the actual data says when the return arrives back in the condition it's in. And those different things to capture that, really, to start doing, you know what it is, I had a major shoe brand. Hey, we, most of us, own, own one item from them, where there was a Gaylord of shoes, and literally, the left kind of bottom of your foot on that the heat down the heel part, but on your what's I'm blanking, that's your arch. Where's the people who know the other the parts around their feet. But
Mariah Parsons 35:59
I get so tender, like it happens at least once an episode where I'm like, what is that word I want? Yeah,
Casey Chroust 36:05
my trick is I remember the first letter so often I can't remember the word of it. But literally, the bottom of that shoe, Mariah, it was an entire Gaylord. And those are not a Gaylord. It's a huge like, cardboard box on a pallet, every single shoe of that item, the left front of the soul on that pad had come unglued. I mean, one after another. I mean, that's a manufacturing defect in a manufacturing How is that data going back upstream to where, like, you don't have a customer. It's like, you know what? My shoe just started falling apart on me, and it's not good. And so there's so much, you know, power in this data, we're already talking to, where you can drive, you know, hey, how you're doing on the forward side, but also kind of gets to the back end as
Mariah Parsons 36:47
well. Yeah, and it's so fascinating, and I know, like, I'll add more color as well for brands that are listening, for my example, at the sizing guide, like, my measurements just weren't even in that sizing guide. So it's like, those things where, like, ranges, it's great, but when you skip a couple of numbers, it's like, what's a customer to do? Then, if that's going to be your sizing guide, you have to then say, like, this typically runs large or small. You need, like, make this best guesstimate because it ran larger. So it's like, I How am I supposed to know that right? And so I give that color because you're totally right. And the data that you can use and where it all feeds into each other, and brands who are really smart about it or really pay attention to okay, we're seeing this brand how and having their different teams talk it will go the extra mile, and it's fascinating to hear you kind of differentiate between healthy versus unhealthy shoppers. And I would love to think through and pick your brain about how brands can even start to do that, like, say, someone is brand new to having, you know, any, any member of their team really pay attention into optimizing returns. Where the hell do they even start? Because there's so many different point, you know, points that you can be like, Okay, we have this, these items that are sitting and need to be put back into our inventory, because they're returns. Or we can start with, you know, these, these couple of customer reviews are coming in for this one product, and they're all returns. Like, what does that mean? So how do you kind of parse apart, what is, yeah, healthy versus unhealthy? And where you can start to, like, delineate one
Casey Chroust 38:23
trend, a couple trends. I'd love to cover, cover for your audience. First, I think I and then I'll come back, and I'll definitely look back and answer your question, because you started hit it a little bit, which we didn't get to. And I think especially, I don't care if you're a big retailer, a small retailer, big brand, small brand. Hey, inventory, you know, matters. Cash Flow matters. And I think one thing that is often missed, and if you really start to think, Hey, who's doing the best and what's the trend, those retailers and brands understand that returns are inventory, and so the faster they can get the good returns back to stock, the faster I think, think, hey, what's a retailer's worst nightmare out of stocks? Like, oh my goodness, I'm losing sales because I have an item out of stock. So if you, if you're sitting here out there, and you're like, it takes me weeks to process my returns, you've got a processing problem of returns. And that is very common. So this is no, don't beat yourself up. It happens. But our customers are literally under 24 hours. Those returns are going back to forward stock. The ones that are new new condition, like literally back in stock, can be relisted to be resold. We had a customer, they were able to buy 10% less inventory because they were using returns efficiently and fast when they came back. I think consumers and shoppers, they hate to hear that sometimes they're buying a return. You have to be careful, but that's the nature of the game. These days, you are trying to get your returns new condition as a retailer backed. If you don't, you're going to lose so much money on returns, it is going to crush your P and L, so you really have to be getting. Uh, returns that haven't been worn, and they're in that really good new condition, back to it. And we have partners, well, with doing the using our technology to do that. But that is, like, one of the things you should be thinking about on the inventory side. When you're trying to get back to back to stock, and get in those stock times you don't have to have as much inventory. And so that's a key thing. The other thing I said, it's a huge trend, and this is kind of where the the industry started, but I think it's really evolved to Mariah. I would share is there is a multi billion dollar ecosystem out there specializing in returns and secondary markets to sell returns. And if you are today, are just like, I'm I'm donating my returns. I'm throwing away my returns. You are wasting money and losing money unnecessarily, you know. And we have partners tied to our platform like, literally, that specialize in selling certain things. It could be, you know, baby goods, you know, which those things were always thrown away. We have a great partner now that is actually a secondary market for all types of baby items and expanding. We have other ones that specialize in, you know, hey, whether it's different types of clothing or shoe or accessories or toys or, you know, and I could run down the list, and, you know, there are niche companies that specialize in buying returns and then selling. There's a lot of times, non consignment, they'll sell it for you. There's also customers and companies out there and partners we have that are really on refurbishing and repairing returns and putting them back to New which is a key part of that. And so that's part of this, this world, too. So I think that's a key, a key trend that I really want people to think about, like, hey, so much of the front end, but on the back end too, especially for those are, you know, merchants that own that you know, that full p and l view of of returns. Or, Hey, you're a merchant. You hate being out of stock in certain items. You should really be thinking about returns more strategically, and what it can do for you. And all of our customers are really going this direction, and have gone in this direction. And I think it continues to evolve those different options that are out there. So I'd be remiss if I didn't get some of those, you know, insights and trends on the table to think about, because when you are back to your question, Mariah, starting to think about, hey, where should I begin? That's something you should be thinking as a potential starting point as well, you know, depending on what your pain point is and what your problem is around returns and what you're trying to address, because there is, you know, so much money that is lost in this entire returns life cycle for retailers, and that can be, not only recouped, as you heard like, you can make more money on it. And so I think that is part of like, hey, you know, you should ask yourself some of these key questions that will kind of help you, guide you. And that's what we do when we come in, is like, hey, let's talk about returns and where some of these pain points in, and we can guide you. And so anyway, I'm glad to cover a few of those things, but I wanted to pause and just hit a few of those trends too. Because if you're trying to think about where to begin, that is one of the considerations you should be thinking about as well, that maybe you want to begin. Like, if you're not getting returns back to stock quickly, or there's weeks to do that, you're just and think about the power of this. I'll say, you want to go back, return to stock that I neglected to mention. Think end of Season items, oh my goodness. Like if I can get this, it's, it's, it's August, if I can get this back to stock really quickly, I can resell it. But if I it takes weeks and it's coming back in September, you missed the selling cycle for that. And now the value of that return has just plummeted from where it used to be. And so speed, speed matters with returns, both for the shopper and the consumer, helping get it back, but also it really matters from your inventory in those cycle times and what you're trying to do from, from your return to stock standpoint, yeah,
Mariah Parsons 43:34
it's a great feat too, because money, money speaks right, especially if you're an up and coming brand, or your SMB, or you're somewhere in the middle where you're not at this, like, logo, brand, enterprise, retailer. So it's like money is going to move mountains, because it has to, right? And so, you know, even when you're thinking about returns that are sitting in inventory, that's like you're paying holding fees on that, like, let alone, I'm missing out on the sale. There's all the back end fees that are associated with, you know, inventory is inventory, and it's going to sit there, or you it drives retention with it. Yes, yeah, exactly. And I think too, a nice call out that I've thought about both from as a consumer and then also being in the space. And then we'll dive into the healthy and unhealthy consumers. Is thinking about the sustainability piece, like, if that is something that is crucial to your mission, and your shoppers care about that, like, I know I try and order as least as I possibly can from any from anywhere, because I don't want to inconvenience and have, like, all this extra carbon emission and packaging and all this, all these other things that I know is part of my footprint. And so it's like, if you can optimize your returns to also have minimal waste of like just product being thrown out, or, you know, it's better if it's donated, but just product being thrown out, or, like, sitting in trash and landfills and whatnot, that can also be something that is very impactful to a sale, to the customer relationship and to the brand. The you know, you you put in the the effort on the forefront of thinking through, okay, what happens to those returns once we get them? Because it will happen, right? Like,
Casey Chroust 45:09
I love that. Thank you so much for mentioning that sustainability is a huge driver. We work with all you know, these retail brands, you know, their their CSR teams around this problem and what it is, and actually, believe it or not, and you'll love this as a tech company you know, where you you know, granted, hey, we may not be solving cancer, but we really do. Part of our mission is sustainability. It's keeping returns out of landfills, and that's what I'm talking about, the secondary markets where, you know, if you go back 1015, years, you'd be shocked. The number of retailers, even big, huge brands, used to throw away returns, which is just a travesty. And you hear Hey every day in the news, your horror stories, still some that are doing that. But also, you know, there's other parts of it. Think about transportation moves, you know, if you can get that return to its ultimate home, the fastest, and avoid, you know, chains of custody of people handing one to the other. Think about, you know, that CO two footprint, you know, and reduce transportation costs. And I would say a ton of optoro employees. Part of the reason that they're at our company is because of really what we're doing on the sustainability and environmental side, which is a key win, too. And I couldn't agree more, and that's what you know, so often people aren't thinking about, you know, hey returns, and the impact on the environment and what it does to that. And so I really appreciate and applaud you for for actually mentioning that Mariah, because that is a key part of the Hey, the ethos and the transformation of returns that we want to help drive to is, you know, keeping, you know, we've kept, you know, millions, millions, I forget the exact number, how many millions of pounds of returns we've kept out of landfills through this process, which is, you know, goes to donations streams and those type of elements. So, but thanks for mentioning that.
Mariah Parsons 46:40
Yeah, yeah, of course. So we have a couple more minutes. I do want to hit on even if it's just quickly healthy versus unhealthy customers. How would, how would a brand even start to try and pick apart their data and assessing their customers there? Yeah, yeah. You
Casey Chroust 46:54
know, one of your questions like, hey, where? Where to start? I would start with some of the experiential things. I think there's some easy, quick wins. People can get, like, an ability to do an instant exchange, be able to do this, you know, boxless, labelless. Hey, drop off experience. I would say home pickups is on the right. We're really working with a ton of our customers on home pickups, just like you're having things delivered your home ecom every day, all day long, returns. You can now someone will come to your home and pick up your returns in a very economical fashion. And so those are experiential things. I'd encourage everybody to go get right away, because technology can make that happen. And I don't care if you're on Shopify or if you're on a full end, you've got your own e commerce platform that can be enabled into something to go, do there. From there, it really does start to get into your question about healthy and unhealthy, and you hit where to start, and that is like the data. You really have to capture that data. And so you're taking order history with that, with that shopper, and then you're you're combining it with return history, and you're overlaying return history so you can see return behavior. And then you're overlaying that in the ideal state where you can have this returns management system. You're overlaying actually the outcome, what was the condition of that return? Was the return they said they're going to be what it was? It a box of rocks, you know, was it? Was it an entirely different I mean, you should hear the funny stories from retailers, you know, it's like they'll take, you know, cheap clothing, they buy someone else, and they'll put the, you know, their tags back on the, you know, they're nice, really expensive tags back on clothes, hoping somebody's going to scan it, and just go along with that process. And so really, you know, you have to have the closed loop system to get the maximum value out of that, but you really then overlay the outcomes of returns data, including like, hey, what? What happened to it? Could you go back to stock? Was it not? And then you really start to get this, really, this total view of shopper behavior around returns. And you can start to look at and you what you the one of the first things you want to do is where we started this whole podcast tomorrow. You don't want to assume that just a high return rate is as a bad thing and an evil you need to really look at that shopper and understand what, how much are they spending with you, and what is, you know, look, if they're returning more than everyone else, but they're spending and buying much more than everyone else, that is a huge win. So you have to really look at this data holistically. It's not just avoidance. You really want to look at this holistically again. That's one of the key themes. I'd have everybody leave from today on what they're trying to do that. And that's and that's really where you can start to go. And if something's new or not new, when something comes back, you'll know, do they wear it or do they not wear it? I mean, that is instant sign of wardrobe. You could take that order data. We're talking about bracketing, just to bring it to life. You know that, you know 910, 11 size shoe scenario, you can see they ordered all three, and then you can see they returned two of them and only kept one. So you know, you have a bracketing problem. And then once you start to have visibility to that, then you can start to decide what. You want to do. And retailers have different perspectives on that. You know, it's not like everybody should be like, No, I'm going to deny return service. No. Some people like, we have, you know, we have a process in where you can warn a shopper like, Hey, I just want to let you know, you know, which is what we do. You don't want to deny someone right away, unless there's really unhealthy, fraudulent type of behavior. But you do want to deny a return you know, you want to try to deny them to buy it in the first place, and you also want to deny them to return it if it is straight up fraud and abuse, and that happens, and the data can let you see that it's a very small percent that you'd ever actually deny someone. But a warn you, that's why I was saying it okay for somebody who's an unhealthy returner, to add a little friction where you can start to say, like, you know what, hey, I'm watching you. Or either, Hey, you want to freak them out with how you're doing it, but they know you're, you're, or you're ordering from them. They it's a common expectation that you're collecting that order history on them, you know, hey, they see that, you know, especially cookies that, hey, you're around, and they're, you're, they're an engaged customer. And so, you know, literally, that's where you can start to do some, you know, unique warm things pop up on your website. You can send an email. There's different things where you can really start to uncover some of those things. And then again, it's their option. How much, you know, don't it's not one size fits all. You can start to personalize some of this stuff and where people are already going. Mariah is personalizing loyalty, right? Hey, loyal shoppers, I'm going to give them, you know, maybe free returns, or, you know, you have a customer. Hey, free home pickup. Come on back. I'll send someone your house to pick it up for free. And you're rewarding that loyalty. And by the way, Accenture just had an interesting study that you love this, which is half of consumers expect specialized treatment from a brand for them being a good customer. It's like, Hey, I inspire a lot with you. I spend a lot. I expect you to treat me really well, and that extends into the returns, you know, journey. And so you really do need to be thinking about that. But once you have that data, then you can start to think about and craft policies and actions and different things. And hey, different brands, they're going to want to have it be their voice and their approach to things. And that's important to realize, too, you know, approach that a major, you know, mass merchant retailer might take for a turn isn't something that a high end luxury retailer might take on, something you gotta really, you know, personalize it also to yourself and to what your brand represents, and your kind of brand ethos of where you're trying to
Mariah Parsons 52:14
go, yeah, yeah, those are all great points. And I know there's so much in there that I want to dive into, but I'm gonna wrap us up your wealth of knowledge. Casey, thank you for coming on today and sharing it all with us. I know our listeners are going to be scribbling down notes as fast as they can, so thank you for making the time. I really appreciate it.
Casey Chroust 52:30
Thanks. Mariah, great to be here today. And hey, good luck to everybody on their retail journey. Yes,
Mariah Parsons 52:35
it's a fun roller coaster. You Hello everyone. It's Mariah again. I am just popping in to say thank you for listening to today's episode, and I am so so so grateful that I have been able to be on this journey for the past couple of years with this podcast, it's been phenomenal to grow and see our community of 1000s of listeners. See what you guys are up to, what you're learning, what you want to hear about next. So if you haven't already, please like and subscribe to the show so we can continue doing this. Leave us a review. Let us know your thoughts. Follow us on our new social media channels and check out our newly launched website. If you or someone you know would be a great guest for the show. Please do not be shy. Fill up the form that we have on there, because those are some of my favorite interviews, and I will make sure that our new website is linked in the bio. It's retention Chronicles podcast.com and as always, let's give a warm shout out to our day one sponsor, Malomo. As you already know, Malomo is a Shopify order tracking platform that enables Shopify brands to take control of their transactional email and SMS through branded order tracking. What does that mean? That means you ditch those boring carrier tracking pages, the all white pages that have nothing on them but a tracking number, and update on the date of your estimated arrival and swap those with pages that actually match your brand and can help you convert on some of your goals. Customers like you and I obsessively check that tracking page when we're looking for our order at our doorstep an average of 4.6 times. If you can believe it, yes, customers are going to that page 4.6 times. So don't waste out on all that customer engagement and instead send them to a page that converts in the way that you want it to. I am talking dealing with shipping issues, having cross sells and upsells, having your social media on there, your loyalty programs, anything, anything that you can imagine. So if you want to learn more about how to do that, go to go malomo.com that's G O M, a, l, o, M, o.com, and if you didn't get that, don't worry. That website link for our sponsor, as well as our podcast website are linked in our episode description. So with that, I will sign off and see you all next time you.