(Picture credit: Ace Turtle)
Major retailers adopt an omnichannel approach for three main reasons: to increase sales, increase market share, and improve customer loyalty. By using an omnichannel approach, retailers are making the online, mobile and in-store experiences universal for the customer. A positive customer experience builds loyalty, which in turn leads to increased sales and market share. At the sales level, the omnichannel approach is working great for companies like Crate & Barrel, Starbucks, Chipotle, Sephora and others; but what about when it comes to returns?
When a customer makes a return, it triggers a series of cost inducing events: shipping, storing, processing and determining final destination (refurbish, repackage, recycle, liquidate, etc.). To reduce these costs, many retailers take the approach of charging shipping fees for expedited service at the point of sale. It is becoming increasingly uncommon for retailers to process fees or charge for shipping during the returns process. While retailers are placing importance on the ease of returning items, it appears that nearly half of all retailers are not effectively measuring the cost of returns. A recent study by DC Velocity and ARC Advisory Group reports that, “far less than half (42 percent) of respondents said they were able to measure the full financial impact of returns. Another 32 percent said they had only a general idea of that impact, while 27 percent admitted that they could only guess at the financial impact of returns or could not measure it at all.”
By not including the cost of returns as part of the omnichannel process, retailers are missing a large part of the puzzle. And, as retail returns continue to increase alongside increased expectations of cross-channel return policies, how to effectively process omnichannel returns will become an even larger part of the overall picture.
Research consulting firm Fung Global Retail & Technology states that, “re-commerce is currently one of the fastest-growing sectors in retail. The total apparel resale market (brick-and-mortar and online) is expected to grow at a CAGR of 13% from $18 billion in 2016 to $33 billion in 2021.” When implementing an omnichannel process – for both the forward and reverse supply chain – it is important to include how to resell the returned items at a high recovery rate to offset the cost of returned items.
Many retailers, including nine of the top 10 U.S. retailers, use B-Stock’s online auction marketplace solution for re-selling their returned items and are seeing a significant impact on efficiency and pricing. Learn how a Fortune 500 retailer tripled its recovery rates by leveraging B-Stock’s online marketplace platform. Want more information on how we can help you tackle your returns? Contact us today.