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Sales, Returns, and Sales: A Virtuous Retail Cycle

Where in your store is the returns desk? Its placement, and everything about it, may be a very clear indicator of your readiness for the future of retail.

In my article, entitled Buy-Now-Wear-Now - A New Approach to Fashion, published inWomen’s Wear Daily (WWD), I talked about a concept I call “Returns-Based Economics.”

Stores absorb the costs of returns handling in exchange for prominent placement of their products, access to customer information, and new opportunities to make additional sales. The retail cycle is not a linear process that starts with an advertisement and ends with a sale.

Rather, the end of one sale is the beginning of the next.

Retailers and shopkeepers primary goals for customers to come back into the store again and again. This should always be focused on the positive, since satisfying experiences make for happy and loyal customers. Often, anything that smacks of disappointment, like a returned product, is viewed as a failure and a stain on the relationship. But this does not have to be.

One of my goals when I visit a retail store is to check out the returns desk. Often I see a place that is not designed for advancing the relationship with the customer. It sometimes appears that customers and staff are bracing themselves for unpleasantness, or possibly a confrontation.

There is an immense amount of potential to unlock here. Customers are coming back to the store, with their wallets in hand. But the process is sometimes treated by retailers as a chore or an afterthought rather than an opportunity to showcase their commitment to extraordinary customer service.

The returns desk should be a premier clienteling zone, a place where continuing relationships are nurtured. It should be a place to harvest  additional customer data, where the individual shopper can be introduced to new and tailored purchase opportunities, with discounts and other perks thrown in. Most importantly, it should be a place where the customer can feel a genuine sense of satisfaction.

We are in the the age of mobile commerce. Consumer data is more valuable than the margins gained from any one sale. Convincing a customer to download and use a native mobile app has more value than a restocking fee does. Ultimately, the relief a customer feels after having mentally prepared for a fight that did not happen is a double joy, and an open door to new transactions that further the customer relationship.

When I visit a store that has invested resources into a tasteful, welcoming, technology-enabled returns desk, complete with strategic upsell and app features – I see an enterprise that is on its way to crafting an omnichannel solution that makes customers feel well cared for at every point in their journey. I see a store that recognizes the customer journey as a continuous, infinite loop.

Take part in our 30-minute webinar where Phil Granof, CMO, NewStore will discuss why empowering your brand ambassadors (aka store associates) with mobile is what's missing in your relationship retailing strategy. Register here>>

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Stephan Schambach, Founder & CEO

Stephan is a serial entrepreneur with a proven track record of creating and growing successful tech companies in the United States and Europe. Under his leadership and vision, he brought Intershop and Demandware to IPO's with multi-billion dollar market caps. As Founder and Chief Executive Officer of NewStore, Stephan is setting out to change the market once again. This time by solving the omnichannel problem facing so many retailers and brands.

Topics: Retail Cycle

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