Coresight Research has performed a deep dive into the returns problem with their new Innovator Intelligence Report: Solving Retail’s Most Expensive...
What’s Beneath the Surface? Reducing Returns Requires the Full Picture
Understanding Performance Through the Lens of Product Returns
Returns are a retailer's most valuable and under-analyzed customer touchpoints, and yet most retailers have an obstructed view of the role that returns can play in measuring overall performance.
Since performance metrics typically rely on sales alone, most retailers don’t consider the financial opportunities and the valuable insights they can glean by understanding which products are returned—and why. Consider this: Returns serve as the earliest signal to the retailer about addressable issues throughout the business: 73% of returns are for retailer-controllable reasons.
But, understanding the full enterprise impact of returns requires a 360-degree and 3-dimensional view of relevant returns data. With the full picture, you can identify the root causes of returns in your organization, course correct to reduce returns, and learn valuable insights to improve overall business performance.
Returns: Getting to the "Why?"
Let’s start by highlighting two of the biggest challenges retailers face when trying to achieve the ideal picture:
Data—Lots of Data
When it comes to product returns there is no single source of data that empowers an organization to measure returns impact and drive return reduction. Like a puzzle, each data source is a critical piece that must fit together to form the complete picture.
Which data sources are needed?
- Historical and ongoing eCommerce and store transactions
- Historical and ongoing product reviews and sentiment
- CRM data and product feedback
- Intelligent customer experience platforms
- Product catalog data
- Supplier data
- Customer data
- Sourcing/QC data
The good news is that retailers already generate much of this data. The challenge rests in creating a single version of the truth capable of supporting a sustained returns reduction discipline while also providing intelligence that supports the entire product lifecycle.
Not Today’s Business Priority
Returns and returns reduction have not been top-of-mind business priorities. This should come as no surprise given the intense focus on topline growth, margin improvement, and customer retention. This extends to returns management with the key objective being maximizing revenue and margin on products that are already returned.
Retailers have also adapted to customer demand for a fast, free, and frictionless returns experience. In response to these priorities, a robust and growing ecosystem has evolved to support customer experience, return logistics, and product refurbishment/remarketing. These are all valuable services, but they focus on reaction, not reduction.
According to a survey conducted by Incisiv, 4 in 5 retailers factor baseline return rates into their merchandise planning process, which they reported was the #1 challenge preventing them from reducing return rates.
A second obstacle to returns prioritization is simply a lack of resources. This is a challenge even for the largest retailers that have dedicated returns management teams. Reducing returns requires sustained vigilance to detect issues, identify the root causes, act, measure the results, and apply learned successes. Resources and investment naturally flow to the areas and initiatives that support business priorities. If returns continue to be viewed as a simple cost of doing business, nothing will change.
Newmine Meets the Challenge: You Reap the Rewards
With all these obstacles, you may be wondering if returns reduction is even possible. Fortunately, Newmine recognized both the challenges of returns growth and the tremendous opportunities offered by returns reduction. We harnessed emerging AI-technologies and sound business practices to tackle the primary challenges of disparate data and limited resources—Suddenly, returns reduction became not only possible—but easy. It was also essential to deliver a streamlined, easy-to-use platform that could start delivering results in less than 90 days, and then scale to benefit teams managing the entire product lifecycle.
Chief Returns Officer® provides a returns-centric, 360-degree view of product, supplier, and customer performance. Our cloud-based platform provides the single-source, complete picture needed to better plan, manage, and reduce returns.
While retailers are struggling with post-COVID workforce limitations, Chief Returns Officer’s powerful AI elements transform even the smallest teams into a Returns Reduction Legion, with the help of anomaly detection, predictive analytics, natural language processing, and machine learning.
The Full Picture: What does it mean for you?
- See and analyze the business in a way you never could before
- Drive greater profitability by applying the “returns lens” to product, supplier, and customer performance analysis
- Digest and distill huge amounts of data to predict, identify, prioritize, and act on returns reduction opportunities in season when it matters most
- Improve customer retention and customer KeepScore™ through more effective marketing, customer experience, and product delivery