Retail is for keeps

Retail is for keeps

Technology firm Clear Returns, based in Glasgow, uses analytics to help retailers handle the thorny issue of ‘returns’, ensuring more items are for ‘keeps’ - and making better margins. Kenny Kemp reports

Vicky Brock knows about customer habits. After all, she is a customer too. She says there is a new ‘point of sale’ when the purchase is made. And it’s not where you have your credit card swiped in the store, or even once an e-commerce transaction has been completed and you get the email confirmation. No, not at all.

It is when – in the privacy of your home – you actually decide to keep the product.
This is the bold assertion that Vicky Brock, chief executive officer of Clear Returns, made at an IBM Business Connect Conference, but she maintains it is absolutely true.

Clear Returns are experts in working out how to sort out the ‘returns’ of many major players, which is a fundamental pillar of customer service. If, as a customer, you are unhappy with what you’ve bought, then you simply send it or take it back. This is a ‘return’. And with e-commerce increasingly a major part of fashion retailing, more people are ordering online – and then finding out that the product doesn’t match their expectations or needs.

Vicky co-founded digital agency Highland Business Research, which went on to become Scotland’s first Google Analytic Certified partner and the first authorised trainer outside of the US, has been at the forefront of using data to provide actionable insight. She has taken this expertise into Clear Returns, now helping international clients save money by highlighting the processes and customer behaviour causing costly returns. The company is being helped by Scottish Development International to break into overseas markets.
The ‘returns’ question is a major issue for retailers, so anything that can be done to help this is welcome.

“At Clear Returns we have the data to prove that for several sizeable segments of online shoppers, the real shopping process actually starts post transaction – where the retailer’s influence is minimal at best. The sale is just the short list,” says Vicky Brock.

The whole retail experience is geared to enticing the shopper to buy more than they require. When you include the generous free delivery terms that customers now expect, then this can become a massive drain on resources.

“Many are aware of the marketing tactics encouraging them to buy more and buy more often, and they are fully aware of the discounting cycles of their preferred retailers. When the goods arrive the tables turn. In their own home, with only minimal retailer influence, customers can then actually make the decision on what they’re going to keep, and if they’ve paid by credit card chances are a penny won’t even leave their account, so even cash flow is not a constraint.”

This is creating a huge amount of waste. She says ‘real satisfaction for customers is about keeps, not returns.”

“The shopper may assume the returned item goes straight back on sale (or as our research shows they have simply never thought about it) – but that is rarely the case. Goods have to get moved to central warehouses, they may require repacking and cleaning, they may simply not be worth selling again and go to outlet or disposal. Additionally, an item that has been returned is more likely to get returned again, so is less likely to keep its margin.

“The reason I founded Clear Returns and the rationale behind our technology is that I believe we should optimise for profit, not simply revenue. Let’s judge a sale and let’s judge product performance by when it is kept, not when it starts the fulfilment process,” she says.

Clear Returns’ technology includes Echo, which forecasts product returns and alerts retailers quickly to the most crucial issues, while Seer allows retailers to understand customers based on what they keep and tailor responses accordingly. Smart Exchange, which is in development, retains more spend post sale. Because the sale is just the beginning.
Returns may be a headache for retailers so ‘keeps’ are in everyone’s interest.