Retail: "All Sales Final" is dead. Here's what retailers should do.
Retail: "All Sales Final" is dead. Here's what retailers should do.
Guy Courtin was formerly Vice President and Principal Analyst at Constellation Research covering Matrix Commerce and how the Internet of Things drives the evolution of commerce. Guy has over 15 years experience in the technology space and specifically in the supply chain space. Most recently he was the Vice President of Research at SCM World. Where he focused on the service providers that empowered supply chains. Prior to SCM World, Guy held numerous senior positions. He was responsible for product marketing at RSi, a retail supply chain solution provider. There managed RSi’s go to market strategy around their leading cloud based supply chain solutions. He also spear headed Progress Software’s supply chain group. Where he was responsible for driving revenue and market share as well…...
Read moreA few months ago I wrote a piece of research that broached the subject of the after market supply chain (The After Sales Supply Chain: New Tools for Customer Experience). This topic continues to grow in importance, especially for retailers. Why? Primarily due to the growing importance of the consumer’s voice within the retail supply chain. The saying “the customer is always right” has taken on a whole new degree of importance. Previously this statement's relevance was confined to a finite number of interactions between consumer and retailer; in today's connected retail ecosystem this saying carries much more gravitas.
Consumers have a greater awareness of a larger portion of the retailer supply chain, and with that awareness comes greater expectations. These days retailers are starting to feel the impact of the informed customer in the after sales supply chain. Consumers want choice 
not only prior to the moment of truth, at the point of making a purchase, but also expect it post sales.
The notion of “all sales are final” is rapidly becoming a dated concept. So what are retailers to do?
- Make sure you have a strategy…okay this might seem too simple, but there are number of retailers ranging from Nordstrom to Target that offer free returns. In 2015, close to 50% of retailers offered these services, placing a massive strain on their cash flow statements. So have a plan. Providing free returns, just because the likes of Amazon and Zappos are doing it, does not necessarily make business sense for your business. Consider creating a tiered returns policies. Big spenders or loyal customers can qualify for free returns, other customers fall into different levels. Perform some ABC cost analysis on the entire supply chain – figure out the true costs. Because nothing is truly “free.” Then create a logical strategy strategy of how to deal with the reverse supply chain.
- Can you turn the after sales into a strategic advantage? The after sales supply chain should be seen as an extension of your relationship with your customer. Returns are not a negative – the customer is not saying they don’t like your product – rather it is part of the customer journey. Can you learn from why the customer returned the item? Is there something that you could alter to the process? How far back in the supply chain can you change procedures to ensure returns are lowered? And you can make returns another revenue opportunity? There are some retailers that seek to incentive customers to return in store, knowing that over 50% of these will convert on another purchase. Could retailers drive those numbers higher? Viewing after sales supply chain as part of your customers’ journey is crucial to unlocking some strategic opportunities with post sales supply chains.
- Another data source – mine it! Why are consumers returning the product? Wrong size, color, style…the number of reasons is endless. Retailers need to embrace this level of data that could be ingested back into the supply chain. Can the product be redesigned? Is the marketing of the product not appropriate? Was there a better way to promote the item? Was the style just wrong? Retailers must embrace the data and information that the after sales supply chain can render. The ability to take the information, processes it quickly and render better decisions based on this information could prove to be a data lake worth swimming in.
- Don’t hesitate to lean on your solution providers to offer solutions. One theme I saw at NRF was some innovative thinking about how to handle the after sales supply chain. From software players such as JDA and IBM to service providers such as Wipro. Retailers shouldn’t hesitate to look their existing service and solution providers to assist with this journey. Don’t be shy about expecting your software and service providers to become a true partner when it comes to handling the post sales supply chain.
The after sales supply chain is evolving beyond being a cost center and a “nuisance” to retailers. It is part of the consumer journey and consumer expectations. Retailers, service providers and software vendors all have an opportunity in the after sales supply chain. Consumers are already there expecting better post sales service, it is up to the savvy retailers to meet those expectations.
Download an excerpt of my research report, The After Sales Supply Chain
