It is no industry secret that the last decade has seen unprecedented transformation in retail. Not only have consumer demands never been higher, but there has never been more pressure on the value chain to minimize cost and maximize productivity for omnichannel brands. That’s why we’ve decided to partner with The Retail Value Chain Federation (RVCF).
RVCF provides key retail industry stakeholders with the opportunity to share innovative solutions, build strong trading partner relationships, and promote research, initiatives, and best practices that enable the industry to move forward into the future.
As part of their 2019 initiatives, RVCF has expanded their focus from the “Perfect Order” to include “Perfect Handling of the Reverse Flow of Product” –a result of the rising merchandise returns crisis.
Returns have a drastic effect as accounting departments must seek new ways to manage the reconciliation nightmare of debit/credits on returned products shipped on behalf of the retailer or .com. From merchandising to payment, companies are struggling to find ways to stem the tide of returns (that can equate to 15-40% of all online sales) and protect their margin.
Surveys, coupons, pre-authorizations, reducing purchase dollar credit over an extended period of time before returning, time limits on returns and more are being deployed with mixed results. These actions mean increased costs and less profit. Is the answer to take the draconian step of shutting off the consumer from future purchases?
As part of this initiative, RVCF has commissioned a Returns Reduction Survey and white paper, which will extend through the RVCF Spring Conference, where Newmine will be hosting a conference session dedicated to returns.
We are excited to be working with RVCF to spark a Returns Reduction Movement in 2019! You can read more about it in our blog we wrote for RVCF called “Returns: The Bottom Line Bully” Take a look below for a sneak peek:
Ensuring Your Returns Reduction Initiative is Successful
Shared Vision: Build your movement around a shared Returns Reduction vision and strategy that is communicated relentlessly throughout the business. Start with a two-year retrospective of your returns data and identify a few of the largest returned items where the need for change is clear.
Accountability: Hold sponsors, process owners, project managers, and team members accountable to deadlines and deliverables.
Processes, Metrics, and MBOs: In order to preserve the new improvements and reduction in return rates, establish and monitor “at risk” products, set return rate goals, and create return reduction MBOs. Every $1 M in reduced returns, contributes $0.5 M to the bottom line EBITDA.