Returns plc: the biggest supplier you didn’t know you had

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About the report

If you look at returns as a whole, they are the biggest supplier into a retailer, and yet poor management of this stock can mean taking the equivalent of a 6% hit on the RRP of all sales.

This is largely due to a lack of clear ownership and visibility of the end-to-end returns process and not knowing where the biggest opportunities lie.

Through our work with major retailers, we’ve identified five areas where a more holistic and forensic look at ‘Returns plc’ can deliver quick, measurable improvements to the bottom line. 

Returns plc: the biggest supplier you didn’t know you had

Download the report

About the report

If you look at returns as a whole, they are the biggest supplier into a retailer, and yet poor management of this stock can mean taking the equivalent of a 6% hit on the RRP of all sales.

This is largely due to a lack of clear ownership and visibility of the end-to-end returns process and not knowing where the biggest opportunities lie.

Through our work with major retailers, we’ve identified five areas where a more holistic and forensic look at ‘Returns plc’ can deliver quick, measurable improvements to the bottom line. 

The Five Priorities

1
End-to-end ownership

Ownership of returns should be made clear and supported by end-to-end visibility and, crucially, actionable insights. End-to-end means everything from the reasons for returns and the online customer journey to in-store process, merchandising and stock exit. Only then can a retailer agree clear performance metrics and start to actively manage the cost of returns.

2
The regret feedback loop

As more retailers adopt technologies to reduce the number of regretted returns, there is an opportunity to leverage this data to a) ensure tools are working, b) create a rigorous improvement cycle with buying, merchandising and supply chain teams, and c) develop intuitive customer journeys with personalised recommendations and nudges, including playing on environmental concerns.

3
Rational returns policies

Adding more returns options, extending return windows and deviating from return policies can be a false economy, as retailers end up over-indexing on costly features that customers don’t value and multichannel retailers divert people away from stores. The antidote to this is to harness the data within the business to instead make informed decisions based on customer value and cost.

4
Data-driven reselling decisions

The odds are stacked against a full-price resale due to poor control of stock placement and the time it takes to process a return. This is caused by a lack of actionable insights, inefficiencies in the returns process and a lack of integration between different returns channels. Advanced data analytics and better network capabilities are essential to maximising the value of returns.

5
Unified cost controls

Over the years, treating returns as a bolt-on to existing supply chains has resulted in spiralling costs and inefficiencies that are now impossible to sustain. An end-to-end view of true cost to serve, processing times and stock visibility – including activity within partners and 3PLs – is urgently needed. This should leverage automation and technologies like new RFID or QR/barcoding that allows retailers to track individual products through the network.

Download the report

More Insights (5)

More Insights (5)

  • Latest article

    Three ways to leverage stores for returns

    Many retailers are missing a trick by not making the most of the King of returns channels – the store – to reduce the cost and maximise the value of this stock.

    June 21, 2023
  • Latest article

    The real environmental issue with returns

    Transport is a very visible issue and therefore gets the lion’s share of attention when it comes to the environmental impact of returns; but it’s the lack of efficiency in the returns process, and the subsequent volume of write-offs, where retailers should really be focusing.

    June 5, 2023
  • Latest article

    Why returns is costing retailers 6% of the RRP of all sales

    Returns has become an unsustainable issue for retailers. In this article, we summarise the key findings and recommendations from our whitepaper 'Returns plc: the biggest supplier you didn't know you had', including five areas where retailers should focus.

    April 6, 2023
  • Latest article

    The value of being clear on what is a regretted return in retail

    Retailers need to decide what they deem a regretted return, and which returns behaviours they want to encourage or even market to customers, so that their returns proposition can start delivering value to both the customer and the business.

    April 6, 2023
  • Latest article

    Should retailers start charging for returns?

    With Zara, Boohoo and now New Look starting to charge customers for returns, other retailers are considering whether to follow suit. Our analysis suggests that for some retailers, this could make an already significant problem worse.

    April 3, 2023
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Christian Hansen
Partner
Katie Quarmby
Director
Belinda Earl
Senior Adviser
Leon Smith
Partner

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