Commerce Trends

by Manhattan Associates

Returns: Could these five tips turn a cost centre into a revenue generator?

Returns is recognised as a timebomb that is ticking away under the carpet of many retailers head offices; the problem is growing daily and for most it will explode at the most inconvenient time.

Given this, it’s surprising how many of today’s big retailers still have outdated policies that don’t meet the expectations of today’s fickle omnichannel consumers. Like those fashion retailers who can’t deal with items purchased online being returned to their stores. Or those that have a different returns windows for unwanted goods, depending on whether they were purchased online or in-store.

We know that the wrong approach to returns is bad for business. A difficult experience creates a negative impression, affecting customer loyalty and return visits, but there’s also a more direct impact on sales revenue.

This isn’t just an anecdotal observation – it’s backed up by a customer survey we did shortly after Christmas:

  • 30% say they chose to buy from retailers with more flexible returns policies
  • 40% say they would have bought more products online if they could return using other channels.

So how can you make returns a positive contribution to your business?

Here are our five top tips for using an OMS to manage returns:

  1. Customers want omnichannel returns, but it also generates higher revenues from more customers. Behind the scenes, enable a user-friendly process (on both sides) by giving your staff visibility of all customer orders from any location.
  2. Getting returned items back on sale quickly means a greater chance of them selling at the highest margin. With cross-channel returns, you need to understand the most profitable selling location and quickly get items to that location.
  3. Automatically take returned items into account when making restocking decisions, so that you don’t acquire duplicate stock items and open yourself up to a greater risk of markdowns later on.
  4. Make returned items available as widely as possible as soon as the product has been returned. Items returned in-store can instantly be made available for sale across your entire distribution network, regardless of the return location.
  5. Create incremental revenue opportunities from online customers returning items to stores. Even if the product isn’t normally stocked in that store, it should be made available for sale on the website if margins allow. Make sure your stores have access to information about your online customers so they can capitalise on their visit.

Find out more about how to deliver these tips in our document, Five top tips for revolutionising returns: Delivering maximum business profit with omnichannel returns.

If you’d like to find out more about how our scientific approach to returns could deliver benefits for your business, get in touch.