Interview Quinten Muller from Returnista

Who are you and what do you do?

My name is Quinten Muller, and I am the founder of Returnista. I am responsible for carrier management, sales, and support.We work closely with logistics partners, and we are constantly integrating new logistics providers into our platform. It’s an ongoing process.

Who are your customers and what do you do?

We build software mainly for e-commerce stores in the fashion industry, providing them with tools to optimize their return process in a more valuable way. We help them reduce costs and provide insights through data analytics. This way, they can decrease returns or create more value from returns by promoting exchanges during the return process, for instance. Instead of viewing the return process as a mere necessary evil, where customers create a label, and it's considered a closed case, we see it as an opportunity.

We aim to change the perception of this process—because it’s a valuable touchpoint with the consumer—from being a cost center to a point where you can add value for both your business and your customer.

What tools do you provide for adding that value?

We have a comprehensive dashboard, but let me start at the beginning. We offer a return portal where customers go when they want to return a product from a specific shop. This portal is fully branded to match the store from which you’re making the return. During the return process, customers select the items they want to return. Based on the reasons they provide, we might suggest, “Would you like to exchange this item for a different size?” We check inventory in real-time to ensure a successful exchange can be facilitated. This way, we encourage customers to make repeat purchases from the store during the return process.

This is combined with a dashboard where you can view various metrics, providing significant value for online retailers. Most shops only look at the return rate. However, that’s not the only metric for evaluating your return process; it just gives you a high-level view of your returns, costs, and value that you can add.

Your return rate is the number of returns divided by the number of sales, yielding a specific percentage. In fashion, this is often between 30-50%, with 30% being more common than 50%. We also offer other ratios, such as an exchange rate, which shows how often a customer is retained during the return process.

After all, you acquired this customer through marketing or another channel, which usually costs money. It’s a real waste if you don’t do everything you can during the return process to extract more value from that customer and extend the relationship. They’re already there. We do this with specific metrics visible in the dashboard, like exchange rate or retention rate. Retention rate measures how often a customer comes back after going through this process.

We see that a strong return process contributes to a higher retention rate. Retention also includes customers choosing to exchange an item for something else during the return process. This doesn’t necessarily have to be the same product in a different size—it could be a completely different product. If this product is more expensive than the initial purchase, customers can pay the difference right within the return process.

So, the retention we focus on is retention within the return process. Retention within the online store is, of course, also measurable, and you could track that in the dashboard as well. That’s the beauty of our dashboard; you can customize it to display the data you want to see. You can link all metrics and create exports for your own BI tools. For example, you can visualize the return rate of a specific product, in a specific country, over a specific period.
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From how many returns is your solution beneficial?

It varies by store, but most customers we provide this service to have a minimum of 500 returns per month. This amount is usually sufficient to extract a lot of valuable data from the return process. At this volume, it also becomes more interesting to focus on reducing the number of returns.

If you can reduce returns by 5% on 1,000 returns, the cost savings can significantly impact your bottom line. Plus, you have 1,000 opportunities per month to make a new sale during that return process. Previously, you just printed labels, accepted returns, and saw it as a necessary evil rather than a chance to make money for your shop.

Assuming a return rate of 25%—which varies greatly between online stores and depends primarily on size and customer loyalty—it’s interesting for shops with 2,000 orders per month (500/0.25=2,000). This means that if your return rate is extremely high, our solution becomes relevant for stores with as few as 1,000 orders per month.

However, you can also use our solution if you are a smaller but rapidly growing online store, so you can scale up without return costs spiraling out of control. You will always have a certain percentage of returns; you’ll never get rid of them completely. This is also due to European regulations regarding online purchases.

You need to make the best of it and view it as a process where you can add value, not just as a cost center. Ultimately, the purchase intent was there at some point, but something went wrong with the product, so it’s essential to know what happened and quickly address it so you can still make the sale. That’s what we focus on all day at Returnista: helping our customers use data to improve their ratios.
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Let’s say I have an online store connected to PostNL. How do I integrate this?

We have integrations with Shopify and Magento and are working on a few other platforms, which will be available in Q1 2021. We already have an integration with these two major platforms.

Since we work with many different online stores, we can leverage our volume to get great contracts with UPS, DHL, and DPD. This means that, especially for smaller online stores with up to 2,000 return orders per month, we can offer extremely competitive rates. It’s twofold: you can save on your return process and also on your logistics, specifically on the return logistics.
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How does a branded environment look like for the consumer?

You can fully customize it to align with how your business communicates with your customers. Colors, logos, etc., can all be added. The front end is up to the company to design. Of course, we prefer to sell our standard interface, but there are some shops that want to take it a step further, and we are happy to support that.
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Do you have a specific type of customer you focus on?

At the moment, we mainly have fashion companies in our portfolio, but we are open to helping other types of businesses with their return processes as well. For example, we’re currently working with Helmonline, which is part of a company that operates seven different stores related to scooter and motorcycle accessories. We’ve connected our portal for exchanges and data insights to their system as well. So, we don’t only focus on fashion.
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Why did you initially focus on fashion? What was your strategy?

Initially, we focused on fashion to build some presence as a company. Working with fashion was a logical step because that’s where most returns occur, and therefore, the problem is the largest. Our solution is immediately the most valuable in that sector. In electronics, for example—especially companies selling new electronics—the return rate is between 3-9%.

If you have 10,000 orders and you’re doing well, you only have about 300 returns per month. Since margins are also high in this sector, returns have a lower priority. Even if you reduce returns from 300 to 200, which is a huge percentage, it doesn’t make a massive impact.
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What are some trends in e-commerce that you are seeing?

One trend that has really taken off is that many shops are switching to charging for returns. Initially, a lot of shops, particularly those just below the largest players, looked at what Zalando, ASOS, and NA-KD were doing.

Now, we see that smaller shops, partly thanks to the tools we provide that allow them to charge customers for returns, are allocating the cost of a return or part of it to the consumer. That’s a significant trend we are noticing. A year and a half ago, shops felt compelled to offer free returns, but now that shift has really taken off.

Larger brands like Zalando are already charging a small fee for returns in some countries. This helps the market grow towards a sustainable business model. If companies don’t take action on their returns, it can have a significant impact.

It’s a killer for your margin, manpower, customer support hours—almost everything has a negative impact. If you can tackle and reduce this with smart tools, it has a positive impact on more than just your returns.

That’s what we continuously focus on: helping our customers make their processes more efficient. For instance, if the return process is clearer, you simply get fewer customer queries, which is still a big win for many shops. And then you think, it’s 2020, how can you still not have a decent return process?
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What is an example of a poor return process?

There are many examples, but one would be shops that put a return label inside the box. That’s super convenient for the consumer, but it creates ‘blind returns.’ Consumers slap the label on the box, drop off the package at the carrier, and the next day it arrives at the warehouse without any information.

The package has to be unpacked, the product has to be checked for quality, and then it has to be put back into stock. These shops accept this as part of doing business online, but I believe there’s a simple step to take beforehand to gather some data and understand the customer’s reasons. This way, you can influence the customer’s behavior much earlier.

For example, you can find out why a dress that sells so well is being returned 70% of the time. Is the sizing off? Does 40% of the feedback indicate that the product arrives damaged? Is there a production defect? This way, you can take action much sooner.

A product that has a 70% return rate is better to take offline for a while to resolve the issue, rather than waiting until the returns are processed, which can sometimes take 4-5 days, and then discovering what the problem is.

So, you bring that knowledge forward, and you can make better decisions in your shop about products that are performing well, rather than seeing in your Magento environment that a product sold 600 times and thinking, “I made a lot of money,” only to find out three weeks later that 400 units had to be returned to stock.
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How is data integration with CMS systems like Magento and Shopify, and what about Google Analytics?

With CMS systems, all data is fully integrated. For Analytics, it’s partly up to the shop. We’re not at the point yet where we manage that for the shop. What is interesting, however, is that some companies see that certain customers have a very high return rate—40%, for example.

But when you dive deeper into that customer, you see that they are often very good customers. They return some of their orders, but they are loyal to your shop, and the customer lifetime value is positive. So it’s not necessarily true that ‘serial returners,’ as they are called, are bad customers.

With the software and based on the data, you can also determine which customers, even if they return a lot, are worth focusing on. You can extract the customer lifetime value of all your customers from the system. We combine order data and return data into one large dataset.

To what extent is it also an analytics platform?

It’s becoming more and more so. We see that shops, especially e-commerce managers and customer service employees who are most active in the dashboard, don’t have a complete understanding of what’s really happening with the shop.

They look at budgets, how sales are going, how many items are returned, and compare those figures to draw conclusions. With these analytics, you can dive much deeper into where money is leaking out of your business and where money is being made when you thought it wasn’t. Gaining that clarity is the goal of the platform.
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What are the 3 tips for online stores that are too small for Returnista? And who should use Returnista?

I want to clarify something here. The 500 returns per month applies to the fully integrated version where you can extract a lot of data. Below that, we have a stand-alone portal where you can use our favorable rates and gather basic data without integration.

Examples include order return reasons, offering exchanges but in a textual format. It’s a great tool that we offer at a very accessible price point.

So, my three tips are:

1. Don’t get overwhelmed by big platforms offering free returns, because the market shows that you can have a successful shop with paid returns.
2. Be transparent about your return process and don’t hesitate to highlight it as one of your USPs. Up to 80% of consumers check the return process before making a purchase—this is especially crucial for shops where customers are ordering for the first time, as it builds trust.
3. Don’t be afraid to communicate about your return process. Many shops say, “If we do that, we’ll get more returns.” That might be true, but you’ll also get more sales. As long as you can keep that percentage in check, it’s positive overall.

Final tip: Choose a return solution that allows you to easily conduct business across borders. Many online stores aren’t focusing on this yet, but as soon as you offer good return options for international orders, your chances of selling abroad increase significantly.

Want to know more? Create an account at Returnista.nl.

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