Gift returns are as much a part of the winter holiday season as family gatherings, overeating, and eggnog. They are also becoming a reverse logistics and inventory nightmare for the retail industry. Returns always risk swamping brick-and-mortar retailers already contending with staffing shortages in a tight labor market.
How Product Returns Impact Revenue
Online retailers know that a liberal return policy is a must for competing with the convenience of physical stores. And e-commerce giants like Amazon have historically incurred high costs associated with return policies designed to remove any hassles that could tip the balance in favor of online and physical competitors. Similar policies from smaller online and hybrid retailers can be a difficult cost to shoulder.
The cost of maintaining those policies has grown in recent years, with inflation and energy prices adding pressure at almost all points of the value chain. How much returns will erode revenue from the upcoming shopping season will only be known in 2024. But analysts are already predicting the upcoming returns season will be as if not more costly than in recent years.
What Buy Online, Return In-Store Means for Physical Retailers
The returns season usually starts immediately after the Christmas holiday and peaks in the first week of January. The volume of returns is staggering, and the retail industry is grappling with how to process the amazing quantity of returned products. A significant challenge for physical retailers is managing in-store resources to ensure returns do not become a negative shopper experience.
Omnichannel retailers are actively looking for ways to better understand the relationship between in-store and online activity—a nexus that can help redefine Key Performance Indicators (KPIs) to more accurately reflect the hybrid shopping experience. Buy Online, Return In-Store (BORIS) is part of that puzzle and, if appropriately managed, can be transformed into an insightful sales opportunity.
Tools for Omnichannel Retailers Preparing for Returns Season
A tight labor market has increased pressure on retailers to improve staff allocation. To ensure the right staff is in the right place at the right time, retailers need accurate real-time data to know what is happening throughout the store.
In-store analytics solutions can help retailers optimize staff planning and positioning using real-time and historical data. The needs of different in-store processes are changing every minute. The ability to quickly respond to those changes is essential for transforming a visit for a return into a revenue-generation opportunity.
Brick-and-mortar retailers focused on using in-store analytics to improve performance can eliminate the friction points commonly associated with negative returns and, in many cases, turn would-be returns into value-adding exchanges. They can leverage insights from objective data to prevent excessive queuing and run quick test loops to improve store layouts.
The right analytics solution will not eliminate returns but can help prevent them from becoming a more significant drain on revenue.
Tags: | retail | people counting| staff allocation | in-store analytics | reverse logistics |