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As we approach the aftermath of the Black Friday frenzy, it is essential to assess our preparedness for handling the inevitable surge in returns. According to an article posted on Reuters “the previously unreported survey results come as U.S. shoppers are expected to return $173 billion worth of holiday purchases in the U.S. this year, 28% more than last year, according to Optoro.”
In other words, according to IMRG “1 in every 3 shoppers return what they buy on Black Friday, with approximately 30 million unwanted goods being sent back to stores.”
Some are already beginning to call the 'Returns Thursday' phenomenon. This term arises in reference to the growing trend of mass returns that occur just after the Christmas holidays. As consumers pack up their purchases during the Black Friday frenzy, many find that they have impulsively purchased unnecessary or unwanted products because of irresistible deals. Therefore, 'Returns Thursday' has become a crucial date for retailers and online merchants, who must deal with a large volume of returns and efficiently manage this post-holiday rush. This new dynamic brings to the table logistical and operational challenges that will require innovative strategies to quickly process these returns without negatively affecting the reputation or finances of the companies involved.
How Metrics Can Reduce Return Rates?
In these dates of compulsive shopping, metrics play a vital role in understanding and minimizing return rates, particularly if the return window extends until January. By closely examining five key points that Return Analyze has shared in its blog, we can strive to effectively reduce returns and optimize customer satisfaction.
Analyze Black Friday data returns across sales channels
In order to ensure optimal decision-making during the Black Friday season, it is imperative for businesses to meticulously assess black Friday returns data across various sales channels. Data serves as the foundation upon which strategic actions can be effectively formulated and executed. By delving into granular details such as return rates, product categories with high return volumes, and customer demographics, companies gain invaluable insights that can inform inventory management strategies and help identify areas of improvement in their sales practices. Furthermore, analyzing this data allows businesses to comprehend the underlying reasons behind returns - whether they stem from product defects or customer dissatisfaction - thereby enabling them to rectify issues promptly. Armed with a comprehensive understanding of these trends across different sales channels including brick-and-mortar stores and e-commerce platforms, organizations can optimize their efforts towards reducing returns while simultaneously enhancing customer satisfaction levels.
Improve Customer Retention and Lifetime Value
Returns from post-holiday sales provide a wealth of information regarding customer behaviors. Metrics derived from these returns offer valuable insights that can be leveraged to enhance retention and increase customer lifetime value throughout the year. It is important to acknowledge that both loyal customers and new shoppers may take advantage of Black Friday offers, making it an opportune time to gather data on their preferences and purchasing habits. By analyzing the metrics obtained from new customers shopping on Black Friday, businesses can implement changes aimed at improving the likelihood of repeat purchases among other newcomers in subsequent months. Details like sizing, product specifications, and customer reviews all play crucial roles in influencing that initial purchase decision. Therefore, if a first-time buyer indicates through return reasons that any of these aspects influenced their dissatisfaction or inconvenience, it becomes imperative for businesses to consider adjusting those features accordingly. Moreover, by examining returns analytics closely, companies can identify existing shoppers who are having mediocre or poor consumer experiences. Granular returns data allows for precise identification of areas where even minor improvements could potentially drive higher levels of customer loyalty by addressing pain points or shortcomings observed in their buying journey.
Optimizing Product Assortment for Retailers
In order to optimize product assortment, it is crucial for retailers to determine the reasons behind product returns during the Black Friday shopping event. By carefully analyzing and understanding these return reasons, businesses can make informed decisions regarding their product offerings. For instance, information on returns can assist businesses in determining the items to replenish and in what quantities. Analyzing the high volume of sales and returns can facilitate the identification of products that are less prone to being returned by customers.
Enhance inventory management efficiency
When considering warehouse expenses, analyzing returns data can aid in maximizing warehouse capacity by pinpointing high-performing categories. By allocating more space to these categories and reducing space for underperforming products, warehouses can use space more effectively. Crucially, examining these return patterns can optimize inventory management for the subsequent year's Black Friday sales.
Leverage return information to enhance the upcoming year revenue.
When crafting plans for a prosperous Black Friday, evaluating past Black Friday performances holds crucial importance. This involves scrutinizing various aspects like marketing return on investment (ROI), comparing gross sales to net revenue, and, unsurprisingly, examining returns data. This detailed information can empower businesses to craft strategy-driven approaches aimed at enhancing performance, not just limited to Black Friday but extending across the entire year.
‘Keep it’ return policy
According to CBS News, some retailers are telling consumers not to bother sending back goods they want to return for a refund because of how costly processing, repackaging and trying to resell merchandise can be. Instead they're saying keep it, and we'll refund you anyway. This policy includes a range of options that goes from offering store credit, charging for some returns and even encouraging shoppers to bring online purchases back to physical stores. Sellers of underwear, bedding and food were among the first adopters of keep it returns due to hygiene concerns or health safety rules.
Conclusions
Mastering 'Returns Thursday' isn't merely about processing returns; it's a testament to a brand's commitment to customer satisfaction and its ability to seamlessly balance financial stability with consumer goodwill. Previous data on return rates, customer preferences, and product performance serve as a treasure trove of insights, offering invaluable guidance for brands to fine-tune their strategies. By analyzing these metrics, brands can make data-driven adjustments, optimizing inventory, refining return policies, and tailoring marketing efforts to better resonate with consumer behaviors.
