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?