Alex Blaker, President at Tech Supplier, Inc. Talks Holiday Shopping and Returns with Cheddar Life
Holiday shopping can lead to record sales for retailers but returns are also a major part of the holiday season and they wreck havoc with stores. Online shopping is up, e-commerce will account for 10% of retail sales in 2018. Shoppers are more prone to returning items purchased online because they aren’t sure exactly what they’re getting.
Buying or receiving merchandise as a gift, then bringing back is a problem all year long. Americans returned $284B worth of merchandise last year and we expect that number to rise for 2015. Policies have gotten more liberal, stores are more competitive with one another, Wal-Mart and Target for example allow you to purchase online and return to the store and Amazon and Zappos has always had an extremely liberal return policy.
Problems caused by having to restock items, being left with merchandise post-December that won’t sell and fraud is also a significant problem. Alex Blaker is the president of Tech Supplier, Inc., a New Jersey based company specializing in reverse logistics and provides insight on a few of the reasons behind holiday shoppers returning of gifts.
Cheddar Life (CL): What are some of the most popular items you expect to be purchased and returned?
Alex Blaker (AB): Any new technology tends to have higher return rates. For example last year we saw drones (the hobby/photography helicopter type devices) have very high return rates. It’s a totally new technology and a lot of people are just curios what they are and how they work. So with the very accommodating return policies that most online retailers have adopted, you get a lot of people “renting” these items. They buy it, don’t really like it, and send it back. Or in the case of drones, they crash it into a wall, and then return it.
CL: Where are most returns coming from: items people are buying online or the store?
AB: Returns through online channels tend to be higher. People don’t get to see the item in person, so they are sometimes surprised when it arrives. Online retail outlets also understand that they have to appeal to a customer over a brick and mortar store so they have very lenient return policies, take Zappos for example, who will take anything back for an entire year.
CL: Do you think people get over-excited to shop on Black Friday and then when the items arrive they have regret?
AB: I don’t think that’s a big component of holiday season returns. In general holiday season return rates are roughly the same as all other times of the year. Any spike tens to be because someone is buying an item for someone else, and they don’t always get it right when guessing what the other person wanted.
CL: What are the main reasons people aren’t happy with what they order online?
AB: What arrived is in some way different than their expectations. This is why, as an online retailer it’s so important to properly set expectations, and to provide a plethora of detail about the item. It increases customer knowledge about the item, and decreases the return rate.
CL: What needs to be done before something can be put on the shelf to be sold again?
AB: The most important thing is to understand your customer and what you want to sell them. In the case of pre owned product, you need to think about the customer experience in exactly the same way you would with a brand new item. Apple devices for example were some of the original innovators in product packaging. The experience of opening an apple item is so enjoyable that there has even become an entire culture around unboxing items, with thousands of YouTube unboxing video’s being posted every day. Often times manufacturers or retailers think that just because someone is buying a second hand item, they should be treated like a second tier customer, and that’s exactly what you want to avoid. The target customer for a pre owned item is someone who loves your brand, and your product but doesn’t have the means to afford a brand new one. As a manufacturer or retailer, you want the customer to have exactly the same experience they would if they were buying a brand new item. This is your opportunity as a manufacturer to convert a lower price bracket shopper to be a core customer of your brand. Provide them an enjoyable buying and unboxing experience and earn their business next time. Make them feel like you are trying to find a trash receptacle for your garbage and they’ll never respect the your brand.
CL: How does a reverse logistics company that specializes in dealing with returns from stores help?
AB: Our engagement with a brand can be as limited or involved as they want. Often times we work with brands to provide valuable insight into the customer experience, from small details like product packaging all the way up to topics like price points. For brands that don’t want to deal with customer service we offer the use of our customer service and warranty department to directly handle all customer returns and customer service needs. As a direct retailer of pre-owned inventory and a reverse logistics facility we have vertical integration over the entire spectrum of return logistics and re marketing activities. This means we can achieve higher asset recovery values, provide more control of the re marketing process, ensuring channel segregation, and we directly control the customer experience allowing for a complete feedback loop for process improvement.