Recommendation and Return Rates out of Control?

Experienced just this during the holiday buying season.  Due mainly to the fact that a product recommendation was greatly overstated on Amazon,  discovered later by a closer look at reviews, which led to what looked like a very expensive refund.  Made me think, if the recos are unreasonably meant to drive saves, but too often lead to returns or refunds,  lots of waste emerging.

Are return rates out of control?   by Tom Ryan in Retailwire.  With further comments.

UPS expects a whopping 26 percent year-over-year surge in the number of returns it processes on January 2, National Returns Day. Those levels would represent the seventh consecutive record number of returns.

The surging rate of returns is occurring largely due to strong online growth. Estimates for returns of online purchases range from 15 to over 30 percent, with items such as apparel and footwear at the high end of that range. The return rate for physical stores ranges from three to 10 percent.

UPS touted solutions it provides to manage the return process, including numerous drop-off points and pre-paid labels for consumers. For retailers, UPS offers visibility to anticipate impacts to inventory and the ability to route returns for repair, repackaging or restocking.  ... '

Augmented Reality Try-it-on App

So here is, at least in theory, the ideal augmented reality App.  We tested a number of such related methods in the past with limited success.  Except in its novelty.  But will it succeed because of fewer returns?  See especially the attached expert discussion.  In Retailwire:

Will an AR try-on app cut down on online clothing returns?     by Matthew Stern

Part of the reason returns have become such a significant part of the online apparel shopping experience is because there’s no great way to get a feel for how clothing fits without first trying it on. But an augmented reality solution that’s been gaining popularity abroad has gotten some funding, and made some partnerships, that might make it easier for U.S. shoppers to make the right choice the first time around.

The Metail app allows users to virtually try on clothing by superimposing digitized versions of garments onto a virtual “body” within the app, according to Business Insider. The 3-D modeled version of the clothing is created taking into account features such as fabric texture while the simulated body created in the app factors in size and weight. The U.K.-based startup received a round of funding led by TAL, a Hong Kong-based apparel manufacturer that purports to make one in every six dress shirts sold in the U.S. Metail hopes to use this as the foundation for a U.S. expansion.  ... " 

Measuring Omnichannel in Retail

With some good expert discussion:

Are retailers measuring omnichannel all wrong?     by Nikki Baird

Through a special arrangement, what follows is an excerpt of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.

There is a point where customer engagement leads to more sales. But there is also a point where it leads to diminishing returns. That’s the beauty of the sales per engagement-minute spent metric.

This metric enables a breakdown to identify causal factors. If an employee is spending a lot of time with customers but not selling much, they need some sales training help. If a store is getting a lot of traffic and employees are spending less and less time with customers, they need sales help. If a store is spending more and more time fulfilling orders instead of helping the customers who walk through the door, they need more fulfillment staff. Where are the engagement minutes coming from, and where are they delivering value vs. detracting from value? .... " 

Computing What Looks Good and Fits

Have been involved in virtual makeover projects in retail since the 80s.  And have seen attempts to take this beyond just how things look, to see if we can understand if a piece of clothing will fit via some virtual model. A look at a number of Apps and applications that do this.   At very least reducing the expensive process of returns.  And improving the level of consumer satisfaction.

In CACM:   ' ... "Creating a digital relationship with a customer ... could theoretically influence a large share of their consumer spending."  .... Technically, all of that is possible today, he says, but businesses have to figure out how to get there. "It will be a mad race to that point because there is so much to be won—or lost—in this race, creating a digital relationship with a customer that could theoretically influence a large share of their consumer spending."  ... ' 

Managing Supply Chain Risk

In CGMA Mag:   Good ideas here.   You can can manage your risks, often by simulating alternatives.

  " ... A global poll of more than 1,000 senior executives by consulting firm Accenture found that managing operational risks related to the supply chain was important or very important to 76% of respondents.

But results of the efforts differed as widely as the approaches, which included monitoring risks, defining capabilities to fill potential gaps, and building excess capacity.

Nearly three-fourths of the companies represented in the Accenture survey reported returns on investment on their risk management efforts of 50% or less. Twenty-one per cent of participants reported a 51% to 100% return on investment and 7% had a return on investment of more than 100%. ... "  

Amazon Anticipatory Shipping

In TechCrunch, a quick look at Amazon's patent, and implementation of what is being called 'anticipatory sales'.   Or shipping before you choose to buy.  While this is seen as madness in the press, in a general sense it is used in many supply chain models.  Which seek to stage shipments to make them most efficient. Such models consider both shipments and the returns.   So its not quite like reading your mind.  Consumers will not be be getting completely unanticipated shipments from Amazon.  Also note that the concept of 'big data' allows this to be done at more complex and smaller levels of detail.

Examining Online Returns

In Retailwire:  A discussion of online returns.  Easy returns are becoming a big issue for online purchases.  How can they be better addressed?   " ... With free shipping and other lenient return policies becoming common practice, as much as a third of all online sales gets returned, according to a report from the Wall Street Journal. ... Interviewing retailers such as Rue La La, QVC and fashion retailing startup Modnique.com, the article explored many ways e-commerce companies are trying to reduce returns based.  ... " 

Customer Rewards Programs

The latest on customer rewards programs from  Progressive Grocer.   The overall return on investment has been increasing.  The sophistication of the methods to focus on returns seems to be paying off.

Store Scanning Devices vs Apps

A short piece in the Boston Globe which notes that Stop & Shop is still the only major company that is generally providing in-aisle retail scanning.    I worked in this area for years and we experimented with the design of such devices in the lab.   These ideas ultimately led to the Modiv design.   Which now also has a Smartphone based system.  But retailers were always reluctant to take on the care and feeding of new devices without clear returns.  Now with the advent of Smartphones, there is room for the shopper to own the cost.   See Aislebuyer for another  example, developed by a former colleague, Andrew Paradies.