Tuesday, February 09, 2010

Bought online and returned at store (part-ii)

The post on the best practices for buying products at the store and returning them at the store got a lot of response. I am posting this to summarize the responses.

Multi-channel retailers (ones with physical stores) are trying to get a leg up on pure web retailers by offering "(web)site to store" options and / or convenient returns at the store for their customers. What are the best practices to deal with products that were bought at the webstore, are returned to the physical store but are not in the assortment for that particular physical store?

There is a good agreement that on-line retailers should allow returns at the store and that is a competitive differentiation for them. Also there is agreement that the way returns are handled is going to be dependent on the type of product
High value, low shipping cost items might be better of returned to the DC for the on-line store.

Low value and high shipping cost items might be better of with more creative disposals:
  • donate to a cause which the store was going to be contributing to anyway.

  • markdown at a store to attract impulse shopper since the shopper is not looking for that product at that store usually given they have been trained to the assortment in the store.
One of the best answers came from Rebecca Berns, SPHR. Her comments exceeded the comment limit for blogger. So I have attached her comment below.

I agree with Tom. And I think you are right - in-store returns are a win-win for the consumer and retailer. Those who allow returns in-store will win over many customers who enjoy the convenience of a larger assortment AND the convenience of easy returns. More and more, consumers will simply refuse to buy online from a retailer if they can't return in-store.

And Tom is right, a KEY point is that the retailer ABSOLUTELY MUST have item information in POS system - seriously it's 2010 - no excuse for failure to do this. And the expense and customer dissatisfaction related to time spent by an in-store associate looking up a manual way to ring a return for products not located in the system would easily eat up any hope of ever making a profit. Trust me on this - I've seen it happen too many times for comfort.

The BEST practice most definitely would include in-store customer service training on website purchasing/offers. If I hear one more retail store associate tell me, "Well, the online site is really a "different company", or, "I can't honor any of the prices you may have seen on the website", or , "That's separate from the store, I don't have any idea what sale/promotion/ picture you are talking about." I think I'll gag. Why on earth would a retailer EVER want a customer to hear THAT?!? And yet, it is the script they've created! Amazing - and appalling!

The BEST online practices (whether they be for purchasing or returns) are those that are totally integrated with the in-store service. Store associates should have easy/quick ways to access any emails/pictures/marketing/etc that are sent to consumers or shown online. If a retailer puts their logo on a website... then to the consumer, it is ONE AND THE SAME as the brick and mortar stores.

As per Roberta's suggestion and the suggestions from your link, I agree, there are several good options, but I believe the answer will vary greatly depending on the retailer, the volume of returns, and even the type of merchandise sold. For apparel, books etc. for example, I would suggest there may be a way to keep the merchandise in-store for sale. A small "token" mark-down would allow the retailer to merchandise the item in the "clearance" section - often a hodge-podge or merchandise already. The retailer "wins" as long as markdowns taken would be small enough to come in under the cost of packing and shipping the merchandise back to the distribution center.
I'd poll distribution center managers - even merchandise that is returned in "perfect" condition that is housed on an over-crowded stockroom shelf for a month, then packed by an already over-worked retail store associate and then shipped across the country back to a distribution center, unpacked by a warehouse associate and re-stocked is unlikely to be in the condition necessary for re-purchase. And something to keep in mind... RTVs may not be the most "green" option either.

Save the time and headaches for your staff, mark it down and stick it in clearance. If you think it stands a chance of re-sale once it gets back to the distribution center, then surely, it will sell out of the mark-down section.

For items where in-store merchandising is not feasible, you may find that shipping from the store to a regional "outlet" or 3rd party retailer is a better option. Again, weigh the odds that the merchandise will arrive at the warehouse in saleable condition and the burden you are putting on your in-store team.

As tech-savvy as some retailers have gotten, some may still be woefully behind in back-of-house RTV processing technology. Before suggesting RTVs to a retailer, I suggest you go to one of their stores and personally ship something out using the tools currently in-place.
Do they have the capability to scan bar-codes when procesing RTVs or are shipping lists created by hand?
Do RTV systems automatically feed into POS on-hand inventory systems or must another step be taken by hand or mailed to an administrative team for processing?
How long does it take the on-hand information to be uploaded into the inventory system?
Will sales be lost because inventory is in "limbo" for extended periods of time?
How will accuracy and shortage in RTVs be monitored and controlled?
Are stores set up for easy online integration with outbound shippers?
Does the store associate have to take the time to call for a pick up or does the shipper get notified of a pick-up automatically?
How much storage space does the average stockroom have? The quantity and size of return items may dictate how often shipping must occur.
Is there stock help for outbound RTV shipments in place currently or will sales/customer services have to take time away from the customers to process RTVs?
Where will shipping equipment and boxes be housed until returns are processed?
What are the costs of purchase and storage be for shipping supplies?

Until you have personally shipped returns outbound in the smallest of stockrooms in the company in a store with the bare-bone staff on hand you will be unable to recommend a solution to any retail client.
Given the move towards store level customization of assortments, this is going to happen more frequently even in cases where a product is bought at a physical store and returned to a different physical store. 

Any other creative suggestions for "returns that are not in the store assortment"?

Karthik

2 comments:

  1. Customer experience has become a critical consideration in multi channel retail and the ability to return cross-channel is one of the benefits shoppers nowadays expect.
    From the store perspective, returns from other channels should be encouraged as they generate further selling opportunities: why not replacing the product by another one from the store assortment.
    This is generally a cultural change that must be rippled through the retailer, all the way to shop floor employees. Educating them on the process and its benefits (more sales for the store) will make the difficult management of returned products easier, whichever way: return to DC, ship to another store, sell in store, give away...

    Posted by Nicolas Pansier

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  2. An interesting variation to this is lands' end and sears. According to Lands' end website, "Today we're a proud member of Sears Holdings Corporation, one of the largest broadline retailers in the US."

    If you go to lands' end website you got a broad assortment and if you go to lands' end website through Sears, you get a much narrower catalog.

    Even though owned by the same company, they choose to have different assortments on their webstore based on which URL you came in through.

    This is one way to keep a narrower assortment of products when dealing with returns at a Sears store.

    - Emma

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