Returns – a murky state of reality

It’s the darnedest thing. We all want to know where we fit, where we belong.

When we are young, we need that someone who provides the roof over our head, the person who is accountable and responsible for our well-being. Without any intention to personify the innate, the same is true for products within the product cycle.  At every step of the way – from manufacture to sale – there is a guardian, a sponsor, an owner and an accountable figure. This may or may not be the same person.

The problem is that a sale is not always the final state of being. Sold good sometimes become “unsold”. The state of return is a murky state of reality somewhere between wasteland to wild west. No one is clambering to step up to the plate.

 

Why is it so complicated?

 

Retailers are unprepared

The objective of retailers is to sell their wares. The most predominant instinct of these retailers when it comes to returns is to avoid returns in the first place. After all, prevention is better than cure.

However, since the global average return rate is 30% retailers need to rethink this attitude. Merchants who cross their fingers and knock on wood that items will stay sold, are doing themselves, their customers, and the planet a tremendous disservice.

Returns is a space that requires planning, business logic, trial and error, and long-term growth. This means that investment in understanding and perfecting the post-purchase milieu is imperative.

 

Who owns the return?

Returns are a hybrid challenge. Returns are physical products that are derived from the Sales process. There are multiple players involved at all steps of the returns journey. The return is triggered in the e-commerce realm and handled by the supply chain. Some are internal to the organization and others are external. There are brand partners, logistics folks and warehouses who are hands that touch the item. In some cases the wholesale units are triggered, in others, liquidators, recyclers and refurbishers.

Digging deeper, it seems obvious to surmise that the folks who calculate and handle monies and do accountancy need awareness of:

  • what returns
  • how many returns occur over set intervals
  • the actual cost of the return to the margins, after the final destination of the return has been carried out, etc.

So who owns the return? It is a complex trans and extra-organisational transaction. As the return progresses in its journey it is essentially carried over from department to department like a hot potato.

 

Returns are shapeshifters

You never know what you are going to get. A swimsuit sold in winter may be rendered trash-worthy because of seasonality. A swimsuit sold in Summer, may be rushed back to the warehouse to be resold as the hottest thing there is.  From resale at the original asking price, to recommerce, to salvage, to liquidation, the identity of the product will vary depending on numerous variables. Some of these are the distance of the item from from the nearest warehouse, the season, the condition, the resaleability to mention just a few.

By the time this identity crisis is resolved, (if it is resolved) in most case Sales don’t want it. It’s no longer worth the time and effort. The warehouse want to be rid of it. It’s taking up too much space and has no buyer in sight.  The CFO would rather these items magically disappear when it comes time to make the financial reports.

These stateless items are often bandied about with no clear guardians, sponsor, owner or accountable figure.

 

Where’s my mother?

If returns could talk, they would undoubtably be troubled individuals: without control of their destiny, no one looking after them, no one safeguarding their rights/their very essence of being. Perhaps they would look out for that agent of good or ambassador to care for them. Perhaps they would remain in emotional dissolution and mourn the loss of a parent they never had.

One thing is for sure, the status cannot hold. Retailers who fail to plan for and take accountability for returns, are doomed to endless, stilted and inefficient supply chain treks and warehouse flooding.

 

The silver lining

On the other hand, retailers who see the opportunity in returns: like those who use differentiated solutions like OtailO, will stand to protect their margins, reduce their returns, and even see an up tick in revenues.

Essentially, returns management innovation like OtailO technology becomes the de facto loco parentis of the return. It makes AI-based and data-driven solution for the next-best shelf for each item. It becomes the ambassador for profit-optimal returns and a great customer experience.

No one wants to be the owner of returns when they are perceived as a persistent and ongoing flood of inefficiency and waste. But if and when returns are seen in a positive light — wherein they increase the bottom line and improve the customer experience — we are confident that many mothers and fathers will step forward and claim ownership.