Product returns will soon cost firms a trillion dollars annually; e-commerce appears more at risk for these costs relative to offline channels. Retailers thus need strategic insights into which factors increase customers’ return propensity and when the short-term costs of returns might be offset by future customer purchases. This article reports two studies that use transaction data from two large apparel e-tailers. Study 1 demonstrates that due to the differences between mobile and traditional online channels, consumers form a larger consideration set when they shop through mobile channels, and this distinctive search practice spills over onto return rates. That is, return rates are lower in mobile channels, and the use of the mobile channel also alters the effect of discount promotions. The findings in Study 2 suggest that future purchases by consumers, after a return, are contingent on category characteristics. In categories in which customers can easily learn from their previous return experience, product returns positively increase future spending, but the opposite is true in categories in which it is difficult to learn.
This case describes the process of entering the Chinese market by Capillary Technologies, an Indian software company that provides cloud-based omnichannel customer engagement and related services for retailers and brands. Capillary represents a high level of ambition: in a country that was well known for software service companies (based primarily on labor cost advantages), it was founded as a business-to-business (B2B) software product company (thus one developing intellectual property). After entering several Western markets, which was consistent with the venture's lofty aspirations, the venture's leadership came to the view that the firm was better placed to pursue Asian markets. The new venture relocated its headquarters from India to Singapore, and made strong efforts to gain revenue in the Asia region — including the large but intensely competitive Chinese market. The case describes how, under the leadership of its China General Manager based in Shanghai, Capillary Technologies started off by working with Western multinationals that were its customers in other markets, then began attracting local customers as it established a Chinese technology team to cater to the unique technological ecosystems prevalent in China. Over a three-year period, Capillary achieved 200% growth per annum. The case concludes by noting the opening of a new office in Guangzhou as Capillary seeks to further deepen its presence in the Chinese market.
Customer Relationship Management System