Holiday survival guide for small-business retailers
Returns during the holiday season are inevitable, so the name of the game is retention optimization—of customers, dollars and product.
In addition to roasted turkey, festive cheer and a jolly old man in a red-and-white suit, the holiday season also brings a host of challenges for small-business owners to navigate, including an increase in customers returning products they’ve bought or received from loved ones.
Here’s what Spencer Kieboom, founder and CEO of Pollen Returns, said the retail sector should do now to prepare.
What should retailers prepare for ahead of the holiday season?
Returns during the holiday season are inevitable, so the name of the game is retention optimization — of customers, dollars and product.
Retaining and driving new customers by capturing them during the returns process. Simply sending a label won’t cut it.
Retaining the dollars spent from the customer by driving them back to a website, app or store to make a seamless exchange. Fast exchanges win retention.
Retaining the value of reselling the product. Recovering returns faster to resell items at full value.
What are the emerging trends reshaping inventory management ahead of the holiday season?
Brands and retailers have an increased focus on D2C (direct to consumer) and digital commerce and, as a result, they have been stretching their inventory to great lengths as they simultaneously are meeting the demand of consumers with options like hyper-fast delivery.
Putting the strategic importance of supply chains at the forefront to utilize existing product and better predict inventory needs to mitigate millions in liquidations due to excess.
How can businesses effectively navigate the dreaded returns process this holiday season?
On average, 20% of product sold is returned, but returns are effectively part of 100% of every customer’s buying decision. The stage is pretty much set on the logistics front, so focusing on customer capture is something that can still be accomplished.
What should businesses be doing now to increase efficiencies in inventory management, shipping and returns ahead of the holiday season?
Look to marketing to drive retention in some fashion for faster recovery while pushing 2022 projects to improved outcomes, and begin strategizing for 2023 peak return season now.
What else do you think small-business owners should know?
Online shopping is freakishly convenient. There is unlimited selection and price comparisons, options for same or next-day shipping, and the list can go on and on. Say a consumer walks into a Kohl’s to make an Amazon return, would that consumer buy anything from Kohl’s on the way out?
I can confidently say chances are slim, because I tracked thousands of people making Amazon returns at my local Kohl’s for weeks and recorded a 4% buy rate on their way out. Those same customers, 24% of them to be exact, also walked across the street to a Whole Foods.
This coming year is a pivotal one for retailers and they should be asking themselves: how am I using my 20% (of customers who return) to my advantage?
Join our LinkedIn group, ALM’s Small Business Adviser, a space where owners of small businesses can gather to network, have discussions and keep up with the trends and issues affecting their industries.
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