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Time to Focus on Returns

It likely will come as no surprise to the high-tech and electronics industry that electronic equipment is the second highest consumer returns category after apparel. Now, with the 2012 holiday shopping season behind them, many electronics retailers and manufacturers are experiencing one of the highest volumes of returns they are likely to see all year long, during the month of January alone.

In fact, according to the National Retail Federation, consumers are expected to return nearly $63 billion worth of holiday gifts this year — equivalent to nearly a quarter of all the merchandise that is returned to retailers in a typical 12-month period.

Thanks to dramatic growth in online shopping, many returns will be shipped back to retailers and manufacturers versus being returned in-store. The highest volume post-holiday shipping day for returns for UPS was January 7, 2013, a day UPS has dubbed National Returns Day, when the company shipped more than 520,000 packages back to retailers. During that first week of January, UPS shipped more than 2 million packages back to retailers — many of these were electronics products.

There is no better time than the month of National Returns Day and the beginning of a new year for electronics retailers and manufacturers to focus on their returns process to prepare for the next big season as well as year-round reverse logistics and returns initiatives. Ignoring the importance of returns could result in lost customers, lost profits, lost business value, and potential liabilities. On the other hand, by improving returns, companies can benefit from both increased profits and happier customers.

In a coming blog I will focus on two key imperatives for electronics companies: how to reclaim value on the back-end through the reverse logistics process and how to improve the overall customer experience through a positive returns experience.

5 comments on “Time to Focus on Returns

  1. dalexander
    January 29, 2013

    Interesting series. I will follow this. IT is great to have actual numbers to impress us with the magnitude of the problem. Several months ago, I signed up for Amazon Prime for $79/year. This allows me to get all my purchased goods shipped to me for free. As Amazon gets deeper into the product mix and broadens their offerings, do you think that manufacturing companies could switch their distribution sourcing to buying direct from Amazon with free shipping? As I do have some experience in matters of freight forwarding and import and export costs, I know how troublesome handling logistics can be and how costly the fees are after everyone in the chain is paid. Imagine if Amazon offered free returns. Take your Christmas returns number and defray that cost to Amazon. Is there enough information to determine if a company like Amazon could absorb the returns cost and still make a profit on overall sales?

  2. Daniel
    January 29, 2013

    Jim, there is no doubt that consumerization habits may go up in coming years. Everybody have a good/surplus financial income and this will increase the purchasing power. Moreover the convenience of online technology made them to redefine the way of shopping too.

  3. SP
    January 30, 2013

    sometimes stores give heavy discount on online shopping to reduce rush at shop. I guess it makes lot of sense to do online shopping.

  4. FLYINGSCOT
    January 30, 2013

    Thanks for the stats.  I have often wondered how some companies make money when it is common for their goods to be returned.  I suppose that is why retailers in the UK like Comet are going out of business.

  5. _hm
    January 30, 2013

    Manufacturers and vendors with their sales representative do promise many features in product available to consumers. But when one arrives at home and read specification and operation in detail, they realise they were not exactly truthful. So option left for consumer is to return these expensive products.

    Also sales people on commission, do push product wrongly. They know product will mostly come back. Sometime quality is also problem.

    Product return is integral part of healthy business practice in consumer market.

     

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