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How to Manage the Post-Holiday Returns Chaos

Jennifer Polumbo
Solution Manager, Stores and Commerce

A return is no different than a purchase in many ways when it comes to building customer loyalty. The ease of the return transaction can make or break a customer’s loyalty to a brand. If the return process is quick and easy then I am more likely to shop with that retailer again. If the return transaction involves too many steps, this can be a deterrent to future purchases. In fact, 57% of consumers say that returning products is a complete hassle/could be easier. At the end of the holiday season, retailer’s want to end up on the nice, not naughty, list when it comes to ease of returns.

In our recent consumer research, we learned 77 percent of consumers plan to return a portion of their holiday gifts, with nearly 20 percent expecting to return more than half of their presents. While 32 percent of consumers noted they plan to return gifts via mail, 65 percent intend to return them to the store. With this number of consumers and merchandise returning to stores, retailers must find ways to come out on top.

The 'Upside' to Returns

  • Extended Return Window: An extended return window can be a benefit for both the retailer and the consumer. This can lessen the pressure on the store staff who are struggling to keep a long queue moving and offer more of an engaging experience to the shopper. Instead of just going through the motions and hitting those keystrokes, the associate has the time to out from behind the cash wrap to assist the shopper with another purchase they have their eye on. Personally, I was pleasantly surprised by some of the extended returns periods when I was doing my holiday shopping for those on my list as well as a few purchases for myself.  
  • Buy Online Return In Store: Count me as supporting what the buy online return in store numbers tell us, I too will ship a package back if necessary, but my first choice is to be able to return in the store. Nearly a quarter of consumers surveyed say that having to repackage an item is one reason they dislike the returns process. It often saves me time and money when trying to get to post office during set hours and the cost of shipping the return. While in store, the fact that I am checking out the merchandise in the store is a retailer’s dream. There is greater chance that this transaction will be an exchange and maybe even an upsell with me purchasing additional items beyond the return.

As CNBC reports, some retailers are proactively taking steps to try to ease the pains that come with returns: 

  • Amazon purchases can be returned at Kohl’s. 
  • Nordstrom is opening small shops that don’t house any inventory but are meant for services like alterations and handing online returns.
  • Target and Walmart have heightened marketing around the fact that shoppers can make their online returns in stores, at kiosks that they’ve positioned at the front to make it more convenient for people who would rather mail the items in. 

Turning Downside of Returns Around

  • The downside to the return is the unplanned merchandise in the store, as we have discussed previously. The retailer may not be able to resell the item in the current market. A bathing suit this time of year may have be a sensible purchase for someone who was going to be having a fabulous winter break in a warm destination, but it won’t be the item that the rest of us in New England are looking to buy immediately if they return it to a store here.  
  • Then there is just the sheer volume of merchandise even if it’s product that would sell. Is there enough space on the floor to add these returned items? Is there space in storage until room is available on the floor? Should they be put on the truck during a restock delivery to route them back to the warehouse where there is more capacity?
  • Retailers don’t want to have to markdown the return just to make space for the new merchandise coming in. Bargain hunters would love it, but it would not necessarily gain them loyal customers to the brand. This is where retailers look to take advantage of systems that can route their orders to the stores for fulfillment to utilize the merchandise and avoid the markdown.

Leverage Brokering Options to Help with Returns

A modern order management system profitably fulfills orders by leveraging brokering options such as:

  • Weigh your Options: Weighted assignments allow you to use multiple criteria such as sale velocity, proximity, and margin, to make any given fulfillment decision.
  • Make a U-Turn: Use probability rules to override your standard fulfillment rules for products or product classes when it makes more sense for the business.
  • Prioritization: Take advantage of the various rules options to prioritize where you look to fulfill orders from.

Come visit us at Shoptalk in March to learn how Oracle Retail’s Store solutions can help you manage the returns chaos.

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