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It's not only what they buy, it's also what they keep: Linking marketing instruments to product returns

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  • El Kihal, Siham
  • Shehu, Edlira

Abstract

Online retailers implement various marketing instruments to boost their sales. These marketing instruments can not only impact sales, but also product returns. However, when assessing the performance of marketing instruments, retailers often ignore potential return effects. Theoretically, marketing instruments could increase or decrease returns, depending on how they affect expected and experienced costs and benefits related to a product. In this paper, we empirically examine whether, and how a comprehensive set of marketing instruments (newsletters, catalogs, coupons, free shipping, paid search, affiliate advertising and image advertising) affects product returns. We use data from two major online retailers and show that return effects vary largely across marketing instruments. Surprisingly, none of the instruments reduces product returns. Newsletters, paid search, catalogs and free shipping increase returns substantially by up to 18%. For free shipping and catalogs, the return effects emerge prevalently for fashion categories, whereas online advertising and newsletters increase returns of both fashion and non-fashion products. These findings enhance our understanding of how firm-initiated marketing instruments affect returns and provide guidance for online retailers in multimedia environments.

Suggested Citation

  • El Kihal, Siham & Shehu, Edlira, 2022. "It's not only what they buy, it's also what they keep: Linking marketing instruments to product returns," Journal of Retailing, Elsevier, vol. 98(3), pages 558-571.
    • Handle: RePEc:eee:jouret:v:98:y:2022:i:3:p:558-571
    DOI: 10.1016/j.jretai.2022.01.002
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    1. Daria Dzyabura & Siham El Kihal & John R. Hauser & Marat Ibragimov, 2023. "Leveraging the Power of Images in Managing Product Return Rates," Marketing Science, INFORMS, vol. 42(6), pages 1125-1142, November.
    2. Vakeel, Khadija Ali & Fudurić, Morana & Viswanathan, Vijay & Sakashita, Mototaka, 2023. "Sustaining shopping momentum in retail malls using real-time messaging," Journal of Retailing, Elsevier, vol. 99(1), pages 102-114.
    3. Zhang, Danni & Frei, Regina & Senyo, P.K. & Bayer, Steffen & Gerding, Enrico & Wills, Gary & Beck, Adrian, 2023. "Understanding fraudulent returns and mitigation strategies in multichannel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    4. von Zahn, Moritz & Bauer, Kevin & Mihale-Wilson, Cristina & Jagow, Johanna & Speicher, Max & Hinz, Oliver, 2022. "The smart green nudge: Reducing product returns through enriched digital footprints & causal machine learning," SAFE Working Paper Series 363, Leibniz Institute for Financial Research SAFE, revised 2022.

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