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What is "Customer-Centric" Returns Management

Peter Sobotta
Updated 05/30/18 5:42 PM

Merchandise returns are a bit of a black hole in most retail organizations: Products come in, disappear from view, and eventually surface again in the form of statistics on returns volume and recouped value, largely unseen outside the logistics department. But as a new report from Aberdeen notes, retail leaders are beginning to shed more light on merchandise returns and put that data to work across the retail organization, from merchandising to marketing to the executive suite.

"Customer-Centric" Returns Management

“Too often organizations just focus on cutting down the number of returns, but neglect finding out why product is coming back from customers in the first place,” says Aberdeen’s State of Service Management 2015: Connect to Your Customers. “Organizations must have better insight into how much and why products are coming back, control the flow of products, and avoid returns that shouldn’t clog the network in the first place.”

Unfortunately many retailers try to reduce ecommerce product returns through more restrictive returns policies, but that drives customers away. Instead retailers need to focus on customer-centric returns management. Gaining more visibility into returns does the opposite: The more the retailer can learn about why customers return product, the better they can select, merchandise and market similar products in the future.

According to the Aberdeen report:

  • 85% of leaders vs 49% of followers use customer satisfaction as a returns metric.
  • 68% of leaders vs 48% of followers track customer retention as a returns KPI.
  • 65% of leaders vs 36% of followers capture and analyze product-specific return data for forecasting future needs.
  • 63% of leaders vs 43% of followers process returns on a daily basis, themselves or through a third-party service provider.

Return rates are creeping ever higher. According to the National Retail Federation, if product returns were a retailer, it would rank #2 on the Stores magazine Top 100 Retailers list – three times the size of the current #2 retailer.

Stemming the growing tide of return rates is an important goal, and one that delivers 100% saving to the bottom line. Delivering a customer-centric experience, satisfying customers and keeping them coming back trumps reducing merchandise return rates every time. Happily, gaining better visibility into returns through customer-centric returns management and analytics does all three.