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Many (un)Happy Returns
I hope that all of you survived the Christmas season and that Santa was good to you.
Were you one of the unlucky ones whose newest thing-a-ma-bob didn’t work as advertised? Maybe it was hurtled a little too vigorously down the chimney, or maybe the assembly line elf was asleep at the switch. Regardless, I’m sure it was frustrating as you agonized in the customer service line waiting to return that defective product.
If that did happen to you, my sympathies. But, as it turns out, there might not have been anything wrong with it after all.
Before the break, I read an interesting article on the ‘Retail Info System News’ website: “Consumer Electronics Returns Costs $16.7B Called Unsustainable”. You can find the original article here: http://goo.gl/Nd3Ub
This article discusses a study by Accenture which examined the high cost of returning consumer electronics. This includes receiving, diagnosing, repairing, re-packaging, shipping, then eventually re-selling. They found it amounts to $16.7 billion dollars a year.
That’s right. $16.7 billion.
Is this just a cost of doing business? Some would say so. But here’s the kicker. 68% of ‘defective’ product returns, when investigated, are deemed to have ‘No Trouble Found’. Only 5% of returned products are truly defective.
So what does this mean for the retail industry? It seems that a majority of returns are related to poor customer education. Here’s a great opportunity. Imagine implementing an in-store program that helps customers understand, setup, use and optimize the products they purchase. What a great way to improve the customer experience and turn customers into repeat, happy customers.
And, more importantly, save money.
According to Accenture “Reducing the number of NTF customer returns by just one percent would translate to roughly a 4% cut in return/repair costs. For a typical manufacturer, that represents approximately $21 million in annual savings; for a large retailer, about $16 million.”
Now that’s a kind of return we can all appreciate.
How do product returns affect your business? Do you have any programs in place to curb the amount of unnecessary returns?
Like this:
Deck the Malls
I saw the first signs on November 1st. I was at the grocery store, hunting for discounted Halloween candy when I saw the glitter. And then sparkles. And a tube of shiny coloured paper. Disbelief took hold. There was no way….was it possible…..were the Christmas products on the shelves already?! I still had a jack o’lantern on my front porch. I hadn’t even bought my Remembrance Day poppy yet. How was I supposed to get into the holiday spirit?
There used to be a very clear start to the holiday shopping rush. The day after American Thanksgiving meant the unofficial countdown to Christmas was on. When the stores opened on Black Friday there would be fancy decorations everywhere the eye could see, and the holiday muzak would start playing through the mall on a 24/7 loop. Parking lots and stores would get crowded and chaotic, and the line-up to visit Santa would wind around fake reindeer and big red SALE signs. But the last few years have seen a definite shift in the retail market in regards to when the season starts. More and more, store owners are trying to speed up the clock and get their customers looking to the end of the year. Forget Black Friday – several big-name American retailers started their seasonal sales in July!
There is sound logic behind the push towards a longer shopping season. Consumers have less money to spend, and retailers are fighting each other for every last penny. Impulse shopping is at an all-time low, and more consumers are focused on budgeting and necessity spending than ever before. Retailers need to work hard to make shoppers open their wallets. Malls and big-box retailers are being hit especially hard in recent years, with increases in local and online shopping affecting the amount of people who walk through the mall to work through their Christmas list. Spreading the Christmas shopping season over several months will allow shoppers to spread their spending out, thus spending more cash in the process. Stores are then able to spread their costs out over a greater period of time, which allows for more steady revenue over an extended period. It’s just good business sense.
