As we approach Q4 of 2020, we decided to do a Newmine Rewind series and republish some of our most visionary content. We’re calling it “Product Returns Reduction: The Time is Now.”
In 2019, retailers still considered returns as a “cost of doing business,” but Newmine spearheaded thought leadership around Returns Reduction, knowing that simply mitigating the costs of returns is insufficient and unsustainable. With the sharp rise of eCommerce due to coronavirus, product returns have risen to an even greater drain on retailers’ bottom lines and are threatening their very survival. This series is a great place to start if you’re looking to familiarize yourself with product returns as well as understand the financial and operational rewards of a persistent returns strategy.
Coronavirus has shaken an already tumultuous industry. At the halfway point of 2020, the bankruptcy toll already stood at 18 major retailers, including the likes of Neiman Marcus, JCPenney, J. Crew, Lucky Brand, Brooks Brothers, and New York and Company. In 2020, CFOs can further improve and reduce their returns to gain a competitive advantage in the global marketplace.
Financial Benefits of Returns Reduction
- Net Margins – Identifying the root causes of returns which impact sales and profitability
- Improved EBITDA – A $1 M returns reduction delivers $0.5 M to the bottom line
- Reduced OPEX – Returns impact labor, transportation, and DC square footage
- Enhanced Customer Experience – Identifying and addressing negative customer feedback
In-depth analysis of your existing annual return data from multiple internal sources is the key to identifying Returns Reduction Opportunities. Our platform, Chief Returns Officer, integrates sales and returns data from multiple sources and systems into one centralized repository, allowing internal brand stakeholders across merchandising, marketing, and your supply chain to interpret the data and take action to recover the lost sales revenue attributed to returns.
Management will endorse Chief Return Officer’s non-invasive cloud-based, AI-driven analytics tools that support collaboration across the business to reduce returns, improve the customer experience, and understand the voice of the customer.
The Chief Returns Officer® tool created by Newmine should really be called “Chief Profit Officer” because it can be utilized in so many more ways than just returns. I use the executive dashboard which gives me a good snapshot of the business and potential problem areas… I know “game-changing” tools are touted all the time, but this one is the real deal.
President, Athleisure Retailer that achieved an overall 4% reduction in return rate in Y1 of using Chief Returns Officer.
As CFO, you know ascertaining insights from vast data sources is what business leaders need to run their business effectively. By providing your organization with timely visibility to returns reduction opportunities and actionable information, you will empower business leaders to make informed decisions that will affect long-term corporate goals. Decisions can be made in-season to prevent on-going returns and customer disappointment.
Chief Returns Officer is a game-changing analytic tool and workflow developer that provides consistent monitoring of the business, an elevated call to action, and collaboration and remediation across teams, business units, and partners.
Key Takeaways from our Deployments of Chief Returns Officer
- Retailers are managing the returns process using manual methods, which is inefficient and costly, especially with the limited resources retailers have amid the pandemic.
- A Returns Reduction platform is essential to identifying the root cause of product issues, so they can be resolved.
- Adopting Chief Returns Officer’s cloud-based software is easy, fast, and requires low-IT involvement.
Engage our team to analyze and reduce your returns in 2020. A $1 M reduction in returns contributes $0.5 M to EBITDA.
And that is the bottom line.
Originally Published in 2019.