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.
As a Private Equity firm, there is no more important mission than creating value for your investors–and there has been no more pressing challenge than the 2020 COVID-19 Pandemic. The firms you choose to work with must show strong growth potential as well as “fixable” issues. In your toolbox are financial, operational and management expertise that can take an organization to the next level. Efficiency of effort to move companies forward is always top of mind and sometimes a limiting factor that governs growth—there is only so much brainpower available.
Product-optimizing tools that can be individually and rapidly deployed to improve value across a portfolio of holdings will accelerate growth and make your firm more efficient. “Best of breed” tools operate as Artificial Intelligence (AI) that free people in your organization and your holdings to perform higher value tasks. It’s like having a digital worker to assist your staff. Not only does AI benefit existing holdings, but when it’s employed in due diligence efforts it uncovers hidden value early in the evaluation process.
For PE firms operating in the retail arena, the product returns tsunami that is engulfing most retailers is the fastest growing drag on the bottom-line. Everyone in the organization recognizes it, but no one owns it. Until now. Chief Returns Officer™ is a real-time, centralized repository for sales and returns data, creating a powerful collaboration tool that can be used across an organization (Marketing, Merchandising, Operations, Customer Service) to achieve the goal of on-going Returns Reduction and recover the lost sales revenue attributed to spiking return rates.
Chief Returns Officer aggregates data from systems into one dashboard that allows internal brand stakeholders across the value chain to interpret the data, and take action. Chief Returns Officer requires only a data feed to get up and running and operates in the cloud. Its AI-based technology immediately begins isolating anomalies, flagging them, and providing the appropriate stakeholder with prescriptive actions. For the PE firm, upside growth evaluations immediately gain more empirical data points. Your staff can cover more ground and gain efficiency.
Attacking the root causes of product returns has a positive effect on both the bottom line and the top line. Identifying the root causes of product issues will add to the bottom line by preventing on-going returns and customer disappointment as well as provide priceless directional product feedback for the future. That’s value creation for the top line by developing product excellence. That’s a competitive advantage. That drives customer loyalty and retention. And that drives improved financial performance:
- Net Margin Gains – Identifying the root causes of returns which negatively impact sales and profitability and then reacting quickly
- Improved EBITDA – A $1 M returns reduction delivers $0.5 M to the bottom line—money that can be invested back into your aggressive growth initiatives.
- Enhanced Customer Experience – Identifying, addressing, and mitigating negative customer feedback to drive retention
- Product Development Intelligence – Knowing what customers really want drives future product success.
In 2019 and beyond, it’s all about the voice of the customer. Only the brands that hear that voice and react quickly will thrive. Chief Returns Officer is a game-changing analytic tool that provides consistent monitoring of businesses, an elevated call to action, collaboration and remediation across teams, business units, and partners.
Key Takeaways from our Deployments of Chief Returns Officer
- A Returns Reduction and Intelligence platform is the essential tool for identifying the root cause of product issues in real-time so they can be resolved quickly.
- Adopting Chief Returns Officer’s cloud-based digital software is frictionless and fast.
- Our Return Managed Services (RMS) team can get your organization positive results in 90 days.
A $1 M reduction in returns contributes $0.5 M to EBITDA. And that is the bottom line.
- Newmine Selected as a 2020 Red Herring Top 100 North America Winner - December 1, 2020
- Newmine Finalist at 2020 Red Herring Top 100 North America - November 17, 2020
- Holiday 2020 Started with Coresight’s 10.10 and Returns Will Follow - October 8, 2020