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Retail Intelligence

Preventing Returns

It’s a recurring theme every year when the calendar flips to Jan 1st.

No, not resolutions, but rather the wave of returned merchandise after the holiday shopping season.

And returns are swiftly becoming a trillion-dollar event.

Retailers are also charging customers for returns to help tighten the grip on margin. Customers on local TV here in NYC were not exactly thrilled. Presumably, retailers are learning from the airlines about unbundling and charging fees for every part of the shopping experience.

The bottom line is that returns cost a retailer money. Processing a return and putting it back into inventory is costly. Returns that are destined for re-sale arrive too late and miss the selling season. In turn, that product is added to a pile of excess inventory.

So, consider the idea of preventing returns from happening in the first place.

This means getting at the root causes of why returns occur. From our perspective, the root cause is the lack of process innovation in the product development process.

For example, consider sizing as a part of the issue.

Customers frequently buy more than one size and return what doesn’t fit. This is also known as “bracketing.” Customer feedback about sizing has to be fed back to the start of the product creation process.

Oddly enough, some brands ignore customer feedback or do not have an efficient process to streamline the feedback process. This goes beyond sizing, with impacts on the design, color, fabric, and functionality of the product.

We cannot prevent all returns from occurring, it’s forever a part of the business. But, getting ahead of what can be prevented means avoiding the costly and complex returns process.