It’s the week after Christmas and retailers have one big challenge left for the year: Returns. We all know strategic return policies and logistics are key to maintaining customer loyalty and the bottom line. Yet the deluge of Christmas returns leaves many retailers at a loss. Interestingly, retailers and brand manufacturers are finding that Product Information Management (PIM) is a secret weapon in preventing returns before seasonal shopping even starts. Could it be your secret weapon for 2017?
Return Rates Are Rising
Consumers plan to hit the stores once again to exchange and return gifts for “better” items. For some it’s actually part of the holiday experience. A chance to shop again while securing after-Christmas sale prices. It’s this consumer mindset that makes the next few weeks the busiest time for merchandise returns.
According to statistics from Optoro, the growth of omnichannel and ecommerce has accelerated a rise in returns overall. While brick-and-mortar stores see 5-10 percent return rates, ecommerce businesses experience return rates between 18-35 percent.
About 23 percent of all returns take place during the holiday season, estimated at approximately $60 billion worth of goods.
While it’s not all doom and gloom when handled correctly, returns create a logistical headache for retailers and suppliers. And then there’s the expense.
Retailers often take on the cost of return shipping, or reselling and restocking the item at lower prices. The labor costs involved can be staggering. To dig even further, there are environmental implications that can result in EPA fines. Millions of returned products that are not resold or repurposed end up in landfills.
And yet consumers demand returns. It’s a vital part of the shopping process, and critical to satisfaction and loyalty. Understandably so, retailers focus on making the process more convenient for shoppers. Yet, is there a better way? Perhaps the more important goal is to prevent consumers from needing to return items in the first place.
Product Information Management Helps Curb Returns
The majority of consumers use online channels as the first resource for product research. Even customers who prefer to shop in-store rely on digital content to research products before purchasing. Shoppers also access content on mobile phones while in the physical store to help with purchasing decisions on the spot. For retailers and brand owners who are prepared with a PIM system, a savvy customer is very good for business. Because a savvy customer is more informed, and less likely to return a purchase.
Using a Product Information Management system, companies can curb returns by providing accurate, up-to-date, seamless product content including:
- Fit predictor tools that help shoppers determine the correct size.
- Verified, accurate product details and specifications, shared seamlessly across touchpoints.
- Compelling videos and photos to help consumers fully understand the look and feel of products.
- Peer reviews, which can be improved when consumers fully understand what they are purchasing and have higher satisfaction rates.
- Information and feedback from consumers that provide retailers and brand manufacturers with information that can help improve merchandising plans and product quality.
- SmartLabel™ sites, where shoppers learn what their products are made of, how they were produced, country of origin, genetically modified organisms (GMO) inclusion, allergens, and nutritional information.
Product Information Management systems also help retailers quickly and seamlessly integrate with new processes and regulations, like GS1’s Global Data Synchronization Network (GDSN), including the recent GDSN Major Release 3, and the Google GTIN update.
Along with curbing return rates, deploying a PIM and master data management (MDM) solution can help you power through the constant barrage of industry and marketplace changes. An advanced PIM solution drives sales and margin growth with compelling, differentiated experiences through a single view of content across suppliers, partners, customers and marketplaces.
Contact a PIM expert to learn more.