Sales are great aren’t they? For every marketeer, pretty much without exception, looking at response rates, average baskets, and sales from your campaign is like a shot in the arm. Triumph. We look at our response uplifts, congratulate ourselves on our customer selections, creative execution and content and move to using what worked, to make the next campaign even better..
But.. what if, 60% of all the dresses we sold through our campaign get returned? What if the customers I think are my best customers are actually serial returners who are costing my business a fortune? Well, let’s not think about that because the sales were great weren’t they. Reverse logistics nightmares, handling costs, out of stock issues, that is surely someone else’s problem, isn’t it?
The reality is, it’s time for a seismic paradigm shift in the way we think about the sales and our customer. With the increasing growth of online fashion sales, and as customers become more and more comfortable with the concept of their home being their changing room, retailers have to grasp a basic concept – a sale is not a sale until the customer decides to keep it.
The simple reality is, using our big data algorithms to match customers with a product they will actually keep is game changing in its simplicity. Optimizing what a customer ‘keeps’ rather than ‘sales’ is the only viable way forward. The benefits are endless for every business unit – sales growth, retained revenue, operation cost savings, improved personalisation and stock availability improvements, not to mention the fact that by marketing products to customers they will want to keep is putting them at the heart of what you do.
We are the only company globally that can lead this change. We understand who are keepers, who are high risk to your business from a return, who should be encouraged to return and explore and what product or category your customer should be marketed with to make sure what they buy they actually keep. Feeding customers who are costing your business money with endless marketing campaigns, promotions and incentives has to become a thing of the past and with new big data technology, it can be.
Adding revenue to the bottom line has actually never been easier, retailers simply need to take the blue pill and delve into the new world of customer returns behaviour.
Keeping stock sold – avoiding returns the key to retail profits
The sales figures over the peak trading periods of Christmas and Black Friday may make the headlines, but those returns coming back over the next 28 days will cost retailers millions…and often get ignored.
It’s time to get the facts.
Playing for keeps…
Clear Returns new Playing For Keeps report offers the facts around returns on Black Friday, peak season and beyond. £160 million of Black Friday stock is set to be returned, stock that will then be unavailable to sell during the most critical trading period of the year…Christmas.
Playing For Keeps is more important than ever as it is not really a sale until the customer decides to keep it. Returns kill retail profits and Clear Returns presents the facts that the wider retail business simply cannot afford to ignore:
Clear Returns CEO, Vicky Brock, explains why Black Friday could end up being a short term gain but long term loss for many retailers:-
“Forget the headline-grabbing figures of what analysts say people are going to spend on Black Friday. That’s just the beginning. The real concern is that the event could end up costing retailers money rather than boosting their profits.”
“This is because the spike in sales from November 27 will be followed, for many businesses, by an increase in returns – and profit is only generated when customers decide to keep their purchases. On average, 14 per cent of all consumer electronic sales are sent back, and in the build-up to Christmas in particular, this can cause all manner of logistical headaches and lost margins.”
Building on the success of 2014, The Customer Returns Summit is back for 2015 and is bringing together the most senior reverse logistics experts from leading retailers that include Debenhams, Shop Direct, Tesco, Panasonic, Argos, Sony and more. Clear Returns is pleased to be a sponsor at the event in 2015.
Clear Returns, CEO, Vicky Brock on why this is a significant event in the retail calendar:
“I think it’s incredibly important that there’s a retail industry event focused on what I believe is the biggest challenge for retail right now, particularly distance selling retail like e-commerce and TV shopping.
Returns globally is a £425 billion problem, £221 billion of which have been identified as preventable, which means if the retailers do something about it, if marketing is tackled, if customer processes/delivery is tackled, there is £221 billion worth of additional retained revenue on the table for retail profits.
Clear Returns are the industry leader in returns intelligence. It’s an absolute no-brainer for us to be there. Our absolute specialism and remit is that we help retailers identify, tackle and ultimately, prevent returns, and we do that by looking at the products, the customers, the marketing and the service processes that are driving up return rates, and more importantly, the interplay of those things.
Clear Returns are delighted to be attending the Customer Returns Summit once again and are looking forward to discussing many key aspects of developing customer experience and retail profitability in a multichannel retail context. We look forward to meeting others in the retail and supply chain who have reducing returns to a manageable level on their corporate agenda.”
Returns kill retail profits. Clear Returns offers a pro-active solution. So, why not get in touch?
Clear Returns are delighted to be featured on Consultancy.uk, the online platform for the consultancy industry.
This piece is dedicated to our work with IBM to improve the retail analytics landscape for numerous retailers around the globe. Since victory at the IBM SmartCamp in Dublin, Clear Returns have gone from strength to strength in helping some of the biggest names in retail save thousands on their return rates.
“The effects of returns can be relatively negative on the business from which the clothes were sourced. According to Clear Returns, in some retail branches 80% of customers that undergo a return experience, do not shop at that retailer again, while 1% of serial returners come to drive 10% of total return costs. The most interesting aspect of the research is that it is a relatively small number of products (7%) that account for a large part (50%) of total returns…”
Stephen Budd and Vicky Brock of Clear Returns talk with IBM on retail analytics, big data and how insights into returns data leads to big uplift in retail profits.
IBM is a multinational and consulting corporation from the United States of America, with headquarters in locations such as New York. IBM manufactures and markets computer hardware and software, and offers services in hosting and consultancy.
The video can be found below from our official Clear Returns Youtube channel:
Clear Returns is proud to say that we were nominated for the title of Customer Insight Project of the Year for our unique work one of our clients. The nomination was part of the BT Retail Week Tech & Ecomm Awards, which were announced at the Hilton Hotel in Park Lane, London this past Wednesday, June 10th. This year there was a 75% increase in applications to the awards, showing the amazing growth in ecommerce and that Clear Returns has proven its commercial impact alongside the biggest players in retail technology and multichannel shopping.
We would like to extend a big congratulations to all of the winners of the BT Retail Tech & Ecomm Awards!
The BT Retail Week Tech & Ecomm Awards is a celebration of the retail technologies and innovations that are paving the way for the growing and dynamic multichannel retail landscape. By working with companies like Clear Returns, retailers are able to meet the changing demands of consumers and completely exceed customer expectations while growing their commercials. Clear Returns is dedicated to enhancing customer experience by using revolutionary software to analyse the reasons behind product returns and develop proactive returns solutions – it’s a problem that’s industry-wide and has been growing alongside the popularity of online shopping.
Clear Returns delivers major retailers at least £1 million of additional revenue for every £10 million returned, and our award nomination for the company’s outstanding work has proven Clear Returns’ commercial impact alongside the biggest players in ecommerce and multichannel shopping.
The Returns Problem
With online shopping seeing significant growth and changing customer demands, return rates for some distance sellers have been climbing well over 30%, and in some countries, such as Germany, return rates up to 60% are all too common. Clear Returns provided this leading TV shopping channel with returns analyses and solutions that caused them to achieve an even more competitive edge in the retail market, maximise customer lifetime value and grow revenue.
A bit about Clear Returns
Clear Returns began when CEO Vicky Brock noticed the increasing complexity of managing returns, especially among the growing popularity of ecommerce shopping. This lead to the development of Clear Returns’ groundbreaking returns intelligence software, which aggregates and analyses the reasons products were brought back to the store, allowing retailers to take fast and proactive action against returns issues. This technology lead the company to win a number of highly esteemed awards, including Tech All Stars, IBM SmartCamp, Innovation of the Year, the Angel Investment Award, and the FDM Everywoman in Technology Award. We’re very happy that the Retail Week Tech & Ecomm Awards had recognised the value in our innovative way of looking at retail – it’s not a sale until the customer decides to keep it.
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.
Yet 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
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 email@example.com to discuss how we can help your retail business grow its profits by helping your customers keep more of what they buy.
CEO Vicky Brock gives a brief update on Clear Returns journey over the last year: from Top Tech Startup in Europe, to scaling with the UK’s leading High Street & TV Shopping retailers and Germany’s fastest growing ecommerce firms.
Clear Returns is proud to announce that our innovative work with leading UK TV shopping channel, The Jewellery Channel (TJC), has been nominated for Customer Insight Project of the Year, part of the Retail Week 2015 Tech & Ecomm Awards. The winners of these premier IT awards will be announced at the Hilton Hotel in Park Lane, London, on June 10th.
The Retail Week Tech & Ecomm Awards are a celebration of the very best of technology and digital ideas that are leading the way through the fast changing retail landscape. With increasingly more applicants each year, retailers are recognising the importance of innovative technology that is dedicated to changing customer experience for the better.
Clear Returns’ award nomination has proven the company’s commercial impact alongside the biggest players in ecommerce and multichannel shopping. Broadcasting to over 30 million homes, The Jewellery Channel is one of the UK’s largest shopping channels. Clear Returns has helped this already innovative retailer gain a competitive edge by focusing on what its customers keep – not simply what they order. Together, we’re ensuring TJC leads the way in customer experience, by helping customers keep even more of what they buy.
Clear Returns’ groundbreaking returns intelligence software has already been named Ecommerce Innovation of the Year 2014 and Top Tech Start Up in Europe. We consolidate and analyse data from across a retailers’ business and the wider market, in order to provide the highest impact intelligence and proactive alerts on returns. Clear Returns typically delivers £1 million of additionally retained revenue for every £10 million in refunds. Do get in touch directly, or with the Clear Returns team, if you’d like to learn more.