Winner of “Tech All Stars”, Vicky Brock, Speaks at Digital Action Day about her Award-Winning Startup

Vicky Brock, the CEO of the retail technology company Clear Returns, was invited to speak about her startup and its progress at Digital Action Day 2014 in Brussels, Belgium.

Digital Action Day, which took place on the 29th of September 2014, is an event organised by the European Commissioner for the Digital Agenda that gathers lawyers, investors and entrepreneurs to discuss how digital technologies are transforming the way traditional EU industries function.

Vicky Brock was asked to speak at the event as the most recent winner of “Tech All Stars”, a competition between 12 of the finest European startups that also brings the competition’s nominees together and connects them with influential investors, mentors and other entrepreneurs.

It is a very good quality program to be on”, said Brock about “Tech All Stars” during her Digital Action Day talk. “It was a really good use of time. We spent two hours with lawyers, investors and entrepreneurs, dissecting a term sheet. And that was amazing”.

Neelie Kroes, the Vice President of the EU Commission and the Commissioner for the Digital Agenda, was also in attendance at Digital Action Day. She was also one of the individuals to award Clear Returns the “Tech All Star” title. Kroes introduced the “All Star” competition with the following words, which resonated with those at Digital Action Day:

“Europe has the talent…It’s you who can come up with the good ideas and shake it all up. Start forging tomorrow’s economy. Create the jobs. Change the world. Because that’s what startups and entrepreneurs do”.

Don’t talk about returns, talk about keeping

Returns are killing retail profits, but who cares?

Tackling returns is complex and here is no single magic bullet.  Often there is no one person or team responsible for minimising returns. And even when there is a named owner of  “the returns problem” that person requires the buy in from teams across the full spectrum of the retail operation in order to be effective. Yet that co-operation rarely happens.
From the recent returns roundtables and discussions Clear Returns has hosted at Home Delivery World, IMRG and the Retail Forum, we’ve seen the same internal barriers occurring in retailer after retailer:

  1. Incentivising revenue targets over profits
  2. Failing to understand the margin impact of returns, including reselling returned stock at a loss
  3. Assuming a return to be a positive outcome for a customer
  4. All KPIs and performance metrics stop at the sale
  5. Accepting that high levels of returns are inevitable
  6. Lack of focus on shortening the period to get returned stock back on sale, including fulfilment of clean stock ahead of returned stock
  7. Lack of enforcement of existing returns acceptance policies
  8. Poor data visibility and lack of actionability from existing returns data

There is no fix to this without a top down approach.  Nor can a single individual or team “solve” returns alone.

So why not turn the thinking upside down?

Is there a board of directors of any retailer anywhere that doesn’t want to boost profits, reduce costs and increase customer experience?  Is there any management team anywhere dedicated reducing the profitability of stores and customers?

So what’s the problem?

Returns have become bogged down in the vocabulary and remit of operations and logistics.  They’ve become someone else’s problem. It’s so easy to blame the delivery company, or those pesky customers buying two sizes of everything. It’s harder to acknowledge that ecommerce has changed how customers buy and that everything from buying strategies to marketing and stock coverage are being impacted.

So how about talking about keeps instead?

How can retailers co-ordinate buying, sales and marketing, fulfilment and service processes to ensure more customers keep what they buy and more sales actually result in a profit?

With a vision like that from leadership, those internal barriers seem a lot more surmountable.

Posted by Vicky Brock

Why returns are costing you more than you think…

It is easy to dismiss returns as someone else problem – someone in operations or the warehouse maybe.

But helping your customers keep more of what they buy is every retailers business.

Returns kill profits – and not just due to operating costs, but also because the impact of a return on customer experience and lifetime value can hit future revenue. If a problem product hits a new or high value customer, the impact is felt right across the business.

As the infographic above highlights, the costs associated with handling a problem product are only half the story.

The costs of acquiring a customer in the first place are rarely factored in to returns – yet some campaigns (like the one featuring this jacket) can directly cause returns.

But the real pain for retailers is the impact even a seamless return can have on customer experience.  Up to 80% of first time buyers never shop with a retailer again if they have to send back their first order.  That impact can be 2 – 10 times the operational costs of returns in the first year alone.

It is not really a sale until the customer decides to keep their purchase, so helping your customers keep more of what they buy – for example by spotting and acting on problem products and inaccurate descriptions – can only be a win win!

Posted by Vicky Brock

What eBay sellers can teach retailers about avoiding returns

With razor thin margins, a return leaves an eBay seller out of pocket. The same is true of larger retailers, or course, but for the individual seller it’s personal.  They care because it’s their money.

Not only is it the cost of lost product and postage that hits the seller, the eBay ratings system means that a seller’s future trustworthiness and margins may be impacted by a return.  Customer experience is quantified. Good sellers achieve better prices than unknown or poor scoring ones, so maintaining ratings are really important.

Returns send a chill through their hearts in a very direct way – and experienced eBay sellers have devised tactics to avoid them.  Some of these tactics are also highly applicable to larger sellers and correlate to how Clear Returns helps tackle returns in larger, complex organisations.

Pain in the wallet drives prevention

The thing that hits an eBay seller’s wallet hardest is the non delivery claim. A seller has to balance low postage costs to stay competitive, with the more expensive certainty of a signature. Plenty of items are sent without any proof to protect the seller and whatever has gone wrong, the buyer always get the benefit of the doubt. The seller has lost their product, shipping costs, has incurred eBay and Pay Pal costs and is thoroughly out of pocket.  But a seller can’t afford to risk their reputation, ratings and right to sell on eBay by obstructing the return, even when a seller suspects a buyer is exploiting that with false claims.

One way eBay handles this – something Clear Returns has also tackled in a different, more appropriate way for multichannel retailers – is to allow sellers to block potential purchases from future transactions.  This in theory helps prevent bad buyer behaviour escalating – at least with the same seller.  The seller community also effectively polices buyers, and buyers are rated in the same way as sellers.  A buyer with repeat suspect behaviour may find themselves blocked, meaning genuine buyers and sellers both benefit.

Not all customers return equally

When a good customer misses out on a buying product because it is out with a known fraudulent shopper (who is less price sensitive than the customer who was planning to keep it) but retailer and shopper lose.  The way Clear Returnshas brought this important customer level actionability to large retailers is through our predictive data platform, which scores and segments customers based on what they keep, then allows automated service responses during and post transaction. The return can be prevented before it occurs.

Good shoppers having a bad experience can be better serviced, fraudulent returners and particularly wardrobers can be effectively blocked.  The seller is protected, good shoppers stop subsidising the cost of fraud – and get an improved overall experience.

Closing the expectation gap

The eBay seller has to reduce the risk of surprises for the buyer in order to minimise the likelihood of a return. While this is more complex for enterprise retailers, at its heart the challenges are the same

Apart from delivery issues, an eBay seller is most vulnerable to those returns caused by expectation gaps and quality control issues.  They are are not obliged to offer refunds because something doesn’t fit  – only if they fail specifically to deliver on a promise.  Providing good measurements and fit information will cut down on questions and get a better sale price, because it reassures the buyer – but ultimately the buyer chooses what they are prepared to pay for something that may or may not fit.

What the seller has to do is reduce the risk of surprises for the buyer – with good descriptions, correct labelling information, images from multiple angles – and most important of all, highlighting and photographing any flaws or faults.  After delivery issues, undisclosed flaws and mis-description are the key causes of returns. And as many retailers will recognise, the nearer the top of the price range the item sells at, the less toleration the customer has for product issues.

Awareness of the scale of the problem drives action

Because the eBay seller feels the pain directly in their pocket, and because for the most part they have a very simple supply chain and touch most parts within that process, their hands on tactics for reducing returns have become pretty sharp.  The data is very real to them, even if once the return occurs, they have little choice but to understand why and ensure the same thing doesn’t happen again.

The enterprise process is far more operationally complex – yet at its heart the issues are the same. First the scale of the problem needs to be understood – from data comes insight, then action. It is by closing the expectation gap, spotting problem products, tackling the major cost points and differentiating problem customers from the majority of good shoppers that ultimately determines profit.

Posted by Vicky Brock