Changing the retail mindset around reducing returns

Over the last three years, Clear Returns has been leading the way in retail returns analytics and using these findings to help retailers solve their ever increasing returns problems. Vicky Brock of Clear Returns explains how the company are trying to change the internal mindset of retailers when it comes to tackling returns.

How Clear Returns are starting to change the thinking about returns within retail teams

One of the really big challenges retailers face when tackling returns is getting internal buy-in from colleagues. The owner of the returns problem and the owner of the means to solve it are rarely in the same department, yet alone the same person.

As we have grown Clear Returns, continually innovating our technology, the most important step of all has been to help retailers make a shift their thinking around the scale of the commercial impact of tackling returns.

Working alongside our clients, one of the biggest shifts we have made is to stop talking about cutting returns and to start talking about helping the retailer, helping the shopper keep more of what they buy. Because, when you talk about cutting returns, or reducing return rates, it’s a really operational problem and it’s quite negative to the rest of the business. It has connotations of being stingy. The assumption is that a customer will only be happy with the most generous returns policy possible. And so you have a challenge as a retailer, how do I manage returns costs and processes, keep delivering excellent service to my shoppers, but still maintain profitability.

This is a flawed assumption. The idea that all of your shoppers are happy to have a return, and just giving them their money back is all it takes, is simply not backed up by the data. Just because you give them a generous returns policy and you make it free does not mean your shopper is happy. In a good 80% of your shoppers almost certainly wanted what they bought. It’s a minority, and I admit I’m one of them, who shop with the intention of returning. That group make their purchase decision at home and they’re not sensitive to returns. But the rest of the shopper base are different, including the group that actually hate to return. They will not shop with you again, regardless of a generous returns policy. They are angry at the fact that you, as a retailer, didn’t deliver on the promise.

There is a really important message for commercial, finance and operations teams to convey to their collegues – expecially to buyers, to trading teams, to marketers, which is “We’re here to help you ensure your customer keeps more of what they buy and keeps buying, because a return has an impact on future lifetime value, future spend, future basket size and trust.”

The operational cost of returns is important, the two-way cost of getting something there and back, the lost packaging, the handling, the cleaning, the lost margin because it’s now been discounted. All of that absolutely matters and is why we work to reduce and pre-empt returns. But overall to the retailer, the biggest commercial impact of a return is the customers you lose because they never buy again. So, our challenge all the way through and the thing that we probably advocate most strongly is this: it’s not a sale until the customer keeps it, and here’s how by tackling returns you can you help your customer keep more and keep buying.

Clear Returns are the solution. So, why not get in touch?

Contact Us HERE

OR

Email: info@clearreturns.com
Phone: 01415544175

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Why measuring retail sales & marketing performance has to factor in returns

Marks & Spencer have attracted unwanted publicity in the last few days, as they have quietly adjusted their figures to reflect that their online sales over the past four years were £500 million less than previously stated.

Why? It all comes down to returns and how the business attributed them internally. Clear Returns regularly see retailers assign the full upside to the online channel – revenue growth, record sales figures, stellar marketing conversion performance – yet barely factor in the extraordinary downside, in the form of high returns. Frequently we see retailers like M&S fail to account for the full online returns picture, so returns to store and all the operation-wide associated costs of returned do not get fully reconciled back to the online business.  This matters.

Returns from online are far higher than in store. They can exceed 35% for UK women’s fashion (and exceed 60% for fashion in Germany).  Some of these goods are returned by mail or Collect+ – thereby incurring two way postage costs. But where the retailer has the store base, as half of online returns – or more – will get returned in store.  These store returned goods rarely go straight back onto the shop floor – the store may not stock that range, the goods may need cleaning or repackaging, so they often require sending back to central warehouses to be processed which can take weeks.  In the case of certain product categories – like electronic goods – they simply cannot be resold as new.  Write-off rates are eye watering and this impacts the bottom line.

Clear Reurns marketing reconciliationYet depending on the level of information available internally around returns, the online channel may neither incur the costs for a high returning campaign or product line, nor see the data that would allow them to make changes to the way they buy or market goods in future.

And its worth remembering, that M&S’s £500million over the last four years doesn’t include the cost of marketing to acquire the sale that led to the return, it doesn’t include handling costs, it doesn’t include lost lifetime value from the customer finally fed up with having to return yet another order.

Clear Returns customers – and Marks and Spencer’s are not amongst them – do not have this problem.  They can reconcile returns back to the orginal marketing activity.  They can remove problem products from promotion fast. They can attribute refunds and returns costs to the correct channel. And they can make business decisions that grow retained revenue – thereby profits – across their whole business, rather than over-rewarding one channels performance at the cost of the whole business.  Find out more

 

Clear Returns MetaPack Returns Webinar

Retail Returns Insights Webinar Available Now

Are returns a headache for your retail business?

Clear Returns invites you to listen to the solutions explored in our recent webinar with MetaPack, Returns: The New Battleground for Retail.

The webinar was a collaboration between leading industry professionals, Clear Returns’ CEO Vicky Brock and MetaPack‘s Commercial Manager David Staunton,  who discussed solutions around returns strategies and analysis, which has become an increasingly complex issue amid changing customer behaviour and a dynamic retail landscape.

E-commerce sales are experiencing significant growth, so much growth that, for many retailers, distance selling has become difficult to sustain with return rates as they are. Only 16% of retailers have said they’re able to profitably fulfil omnichannel customer demand, while some retailers are seeing their return rates grow faster than sales.

Clear Returns’ data analytics has shown that 1 in 3 fashion items bought online in the UK are returned, and in some geographies, such as Germany, that rate can go up to 60%. But it’s not only fashion retailers that are seeing too many products come back to the store. Clear Returns works directly with clients from electronics, to jewellery – delivering returns intelligence to all non-grocery categories.

Returns are a growing problem for retailers across sectors and channels, especially since the damage done by returns goes beyond the initial refund – up to 80% of first-time customers who return will never shop with that retailer again, resulting in a significant loss of customer lifetime value. During this major shift in retail, it’s essential that distance sellers focus on maximising their returns strategies and customer experience with innovative technology and proactive solutions.

To learn more about these returns trends and issues and how Clear Returns’ and Metapack can help you tackle them, listen to the free webinar.

Get in touch directly at info@clearreturns.com to discuss how we can help your retail business grow its profits by helping your customers keep more of what they buy.

 

The future of retail and the returns that come from it

boxIn the rush to give shoppers what they want, when they want, and on whatever device, retailers have flocked to omnichannel offers and tempting promotions. But those offers will only cost them lost profits and lost future customers without investment in non-sexy back-end systems and logistics processes.

This past Christmas and peak sales period, many retailers were unable to deliver on the fundamentals of meeting customer promises – stock available to buy and timely order delivery. Retailers have been over-promising, especially when selling through their omnichannel networks, which has created a nasty feedback loop that exacerbated existing changes in customer behavior and exposed underlying weakness in back-end and logistics systems.

It’s no secret that the recent Christmas shopping chaos backlogged many retailers who didn’t invest in their back-end systems and was one of the reasons parcel delivery company, City Link, went bust. The backlog happened for a few reasons – the massive discounts in the lead up to Christmas kicked in earlier, continued longer and shifted January trading into the peak Christmas trading period. Also, a surge in early online purchases took product out of stock, much of which was later destined to come back as returns (in some categories e-commerce returns rates will have come close to 50 per cent).

With the ‘new shopping’ – major advancements in e-commerce and m-commerce selling that make a customer’s buying experience as convenient as possible – the future of retail is certainly here. Retailers want to offer their customers everything from click and collect services and free same-day shipping to lenient return policies, but without a proper strategy on how to meet these offers they are prone to disappointing customers and losing money from returned products that would have otherwise been kept.

Vicky Brock, chief executive of Clear Returns, said that ‘back-end tech and systems integration are not sexy and they don’t win shiny awards or get much PR, but they do allow businesses to survive, compete and thrive. If there’s a failure anywhere in the process it’s a failure of the retailer’.

Usually after customers receive their delayed products weeks after the holidays ‘they return them’, Brock said. ‘This year, that New Year returns spike happened during Christmas trading, which had an impact right across the supply chain and onto the shop floor, and it contibured longer due to those process failures. The thing a lot of people forget about is the impact of returned products on profits, and waiting weeks for a pair of boots to arrive in the mail only gives the customer time to reconsider their purchase or to find another pair of boots that they like better’.

As much as delays in delivery kept customers waiting in the lead up to Christmas, it also lead to a pile up of unprocessed returns, with little time to repackage them and get them back out on the shelves for consumers to buy. Next year we can expect that more emphasis will be put on the prediction and processing of returns, so that they don’t sit on a warehouse shelf decaying and losing value. Clear Returns helps retailers identify what will return and when, which will be information needed to avoid these customer experience and profit killing issues next year.

Clear Returns offer the solution to your return problems. Why not get in touch?

Contact Us HERE

OR

Email: info@clearreturns.com
Phone: 01415544175

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Bird & Bird Panel: How Technology is Changing the Retail Landscape

On the 27th of November, international law firm Bird & Bird hosted Creative Disruption on the High Street, a panel of entrepreneurs debating the intersection of retail and technology and the future of shopping channels. The panel was held at the Design Museum in London along the complimentary backdrop of the museum’s Women Fashion Power exhibition.

The panel discussions touched on topics of how technology is shaping the way consumers shop, why attention toward omnichannel is important, and how retail technology businesses, like Clear Returns, are helping retailers improve their customers’ experiences while shopping online and through mobile. Vicky Brock, CEO of Clear Returns, spoke alongside companies represented by leading entrepreneurs Elizabetta Camilleri, Stuart Marks and William Shu from SalesGossip, JLAB and Deliveroo.

At the Bird & Bird event, technology entrepreneur, Stuart Marks said that one of the biggest problems today’s corporations are facing is that ‘the world is moving very fast’, too fast for the skill sets within big corporations to keep up with the changing retail landscape and its quick shift into omnichannel. This is why it is important for big corporations to work with tech startups who know how to face not only the benefits that advancements in technology have brought into retail, but also its challenges.

Among the many challenges of this massive shift in retail, Clear Returns tackles a problem that costs retailers millions, but often gets ignored: customer returns. A growing customer returns rate is one of the symptoms of quickly growing retail technologies, as more customers turn to online platforms to purchase products, platforms that may have not yet been adjusted to ensure that customers have the best possible online experience.

One in three fashion items sold online in the UK are returned, and in Germany it can be as much as 50 per cent.

What Clear Returns does is provide an early warning system that helps retailers spot the products that are most likely to be returned and spot the customers that are most likely to return products, which gives retailers the data they need to take fast action in preventing returns. We do this with sophisticated data software that can locate the source of a returns problem after only five returns. We provide a solution to a problem that was originally propelled by retail technology with retail technology itself.

Watch the video below to learn more about Clear Returns and our Bird & Bird’s Creative Disruption on the High Street as well as other companies that took part in the event. If you would like to learn more about the work we do, you can look at our recent holiday returns analysis or watch our brief video on how we tackle retail returns.

Posted by Lisa Monozlai