Reducing returns before funding growth

Ready-to-wear retailer

The product selection under review generated 50,000 orders a year, with an 18% return rate. Management was torn between more advertising and better product pages.

Approach

1. 01

   Frame

   The task was to choose between more customer acquisition and improving existing orders, with an initial investment of $27,000 CAD. The conversion rate could not drop by more than 0.2 points.

2. 02

   Investigate

   The reasons behind 1,500 returns and customer comments revealed uncertainty about sizing and cut. Certain items accounted for a high share of returns.

3. 03

   Explain

   Poorly targeted customers and insufficient product information were compared. Size-related reasons, on the affected items, mainly supported the second explanation.

4. 04

   Build

   We compared more advertising, promotions, and product pages enriched with fit guidance, with the existing product pages as the baseline.

5. 05

   Test

   800 orders were allocated between two versions of the product pages. The thresholds set in advance were a return rate below 15% and a conversion drop limited to 0.2 points. Returns fell to 13.5%, from 18.5%; conversion fell by 0.1 points.

6. 06

   Decide

   Management extended the new product pages and kept the advertising budget at its current level. The sample justified a broader test before any growth commitment.

7. 07

   Steer

   At three months, the return rate stood at 15.4%. The pages for the most problematic items have been corrected, and the annual projection is still considered uncertain.