Dec 5th 2017
Black Friday Returns
The total online retail spend for Black Friday in 2017 totalled a huge £1.39 billion, 11.7% up on the previous year*. But how many of these purchases have actually been kept by customers and how many are currently being returned? And is this simply lost profit or is there still value to be gained? In an industry driven by intuition, at what point are retailers introducing the facts in order to learn from the sale and return trends of discount days?
With an estimated total cost of returns sitting at around 20% of what businesses are selling as a whole, when it comes to key events such as Black Friday and Cyber Monday, retailers are struggling to cope with the sheer demand for products and the corresponding returns process that comes with it. Currently, this all too common scenario comes with piles of returned goods being sold off by the pallet to the highest bidder because they don’t make it back to the shop floor. Not only that but it often takes businesses months to realise that a product that may have sold 100 units, may have also had all 100 returned, which is a huge loss of revenue. Retailers must be able to get this data back within a matter of days, to allow them to swap out stock or move it instore and online accordingly.
There is often reluctance to rely on technology over intuition from the retail sector. But by using a solution that can cost-effectively and efficiently track, monitor and preempt stock movements and returns, retailers will gain extensive insight into their stock and on the shelf product trends.
The key to unlocking value from returns is the data element. By consolidating all the data collected from systems currently in place, retailers can obtain a single, clear view of all their products and their corresponding trends. Analytical systems can create this singular view, so retailers can quickly and easily detect issues within the returns process and adapt accordingly, such as stocking less of those items that have suffered more frequent returns and visa versa.
It’s clear that a problem still lies within the returns process for the retail sector; organisations need to align their returns process to the rest of the business and complement their intuition with the hard facts if they’re to gain value from their returns that can influence future sales.
- Peter Ruffley, Chairman, Zizo