How your data can turn Black Friday into a White Christmas
Returns are a huge area of concern for many retailers; indeed, the sale has not been completed until the customer actually decides to keep the product. But with Black Friday around the corner, and all of the flash buying that entails, can you predict what products are going to cause you the most problems, or even each which customers could give you a headache?
The answer is yes – it’s all in the data.
The key is to bring all of this data together into a central area for analysis. This isn’t always easy with the plethora of systems within a retailer’s business, but with modern technology it is possible in a short timeframe, and at a reasonable cost. Once the data is together, you can begin to understand trends and patterns which affect behaviour, and build models which allow you to change that behaviour. Analytics can be delivered through clear, concise reports, designed to suit the business and delivered to those who need it most.
So where should a retailer start? When looking at returns, there are four key areas to be aware of:
Sales & Stock
It may seem obvious, but stock that is in the process of being returned is unavailable to sell. You either have to increase what you buy, or you risk being unable to fulfil the orders of loyal customers. If you look at the data pertaining to your customers, products & marketing as a whole, you can understand which areas are causing higher than normal returns, leaving you to intervene and maximise revenue from the stock you currently have and drive forward customer spend.
Understand your Customers
Shoppers have different levels of tolerance to returns – some abandon you forever after even if you deliver the perfect return. By analysing customers through either their responses on social media, or their returns history, you can deliver return-sensitive customers with the required service response. You also gain insight into shoppers with particularly expensive or fraudulent returning behaviour, and react accordingly.
Be aware of ‘Toxic’ products
It’s generally recognised that 7% of products typically drive 50% of returns. Yet, one crucially overlooked fact is that they can affect everything else in the order. By analysing your products and sales data it is possible to set up alerts about problem products even after a small number of returns, so you can prevent disappointing your customers, pro-actively fix issues within the product portfolio and inform future buying decisions.
Improve returns efficiency
The very process of dealing with returns is costly and inefficient, with the risk of drastically dropping customer margin and reducing future customer lifetime value. If you can identify and understand potential gaps or bottlenecks in your returns process, and their effect on both customers and the business, then even a small improvement in efficiency has a far higher impact on the bottom line.
So can the problem of returns be fixed? The simple answer is yes. By using your data correctly and using it in a way that brings quickly realised benefits to your business, retailers have a real opportunity solve the returns issue once and for all.
With these things in mind, why not let your data turn ‘Black Friday’ into a ‘White Christmas’?