Believe it or not, the 2019 Holiday season is coming up fast with only a couple months before consumers start opening their wallets in search of the perfect gifts (officially, the holiday shopping period starts November 1 and in some cases, sales can account for 30-50% of annual sales). NRF data shows consumers spend the most during this time of year on decorations, candy, gifts and gift-to-self.
Those Gifts are Headed Back to the Store
Gifts are the most likely purchases to make their way back to stores. Whether it’s an ugly sweater, a blender no one asked for, or the latest tech gadget that grandpa can’t quite figure out, a lot of well-intended gifts are headed back. If you’re curious, last year’s most returned items included: specialty kitchen items; Lego sets; small hand tools; dolls; and women’s trendy apparel. Read more on our Top 5 Returned Items from 2018.
It’s no secret that the apparel category is a perpetual leader in return rates; especially when it comes to e-commerce sales. These returns could translate to 10 to 40% of lost revenue, not counting the costs of shipping, processing, storing and repackaging. Though much of the inventory will be in functional and cosmetically perfect condition, putting it back on store shelves is logistically inefficient (consider this: it costs twice as much to process an online return back on shelf as it does to sell it). Plus, when it comes to Fast Fashion, styles may already be obsolete by the time they come back.
Remarketing Returns into the Secondary Market
Here’s where a recovery-generating secondary market solution can come in handy. Chances are you already have a process in place for your merchandise slated for the secondary market (post holiday or otherwise). If that plan involves selling to one or two big buyers, you may want to reassess for a couple reasons: 1) your recovery is likely much lower than it could be; and 2) manually negotiating each pallet or lot of inventory is most likely taking you away from selling primary merchandise.
An automated, B2B, auction platform is one of the best ways to earn competitive market value for returned and excess inventory. Think of it like your own storefront to auction off bulk quantities of returned, excess or other liquidation inventory to the highest bidder. Nine of the top 10 U.S. retailers are currently using this approach to achieve higher pricing, a faster sales cycle, and real data on secondary market prices. These marketplaces are customized, integrated and scaled based on a retailer’s unique needs. For example, a retailer can handle the uptick in inventory following the holidays without sacrificing recovery or velocity. They also allow total control over who is buying the inventory and how it enters the secondary market.
Using Data to Increase Sales
These days it’s all about the data and how it can help increase sales and hit goals such as recovery, velocity and brand control. The smallest adjustments can drive substantially better results. Knowing auction strategies like lot optimization, low start prices, accurate manifests, targeted marketing and leveraging brand equity all contribute to better pricing. This is where working with a company that has years of online marketplace experience – and years of compiled data – can make a big difference.
Ready to get ahead of the holiday returns craze? Schedule a demo today.Request Demo