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08/12/2021

CSA Exclusive: Combat rising returns with flexibility, analytics

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture
Marcus Shen
Marcus Shen, COO of B Stock

Although already high rates of merchandise returns are climbing during the COVID-19 pandemic, strategies are available to mitigate the impact.

Chain Store Age recently spoke with Marcus Shen, COO of B-Stock, a platform that assists e-commerce retailers by directly connecting them to online auctions for liquidations, returns and overstock. The company’s network includes dozens of online liquidation marketplaces with thousands of listings open for bidding across all product categories.

“According to the National Retail Federation, consumers returned roughly $428 billion in merchandise in 2020, or about 10.6% of total retail sales in the U.S.,” said Shen. “Clothing made up about 12.2% of that. For every $1 billion in sales, the average retailer incurs $106 million in merchandise returns.

[Read more: How to Reduce the Cost of E-Commerce Returns?]

Exacerbating the increase in apparel returns has been the closure of fitting rooms during the pandemic at many stores.

“The practice of ‘bracketing’ purchases has jumped,” explained Shen. “Without the ability to try on an item, consumers purchase multiple sizes online and send back the sizes that don’t fit, leading to an increase in apparel returns.” 

While elevated return levels have an effect on retail profits and pricing, Shen advised that retailers can actually turn the return process into a competitive differentiator, with positive financial results.

“Customer returns are a part of marketing,” stated Shen. “Convenient and flexible return policies are another tool retailers use to get you to try something, not unlike an advertisement or special offer. And like advertising and promotions, it often results in higher revenues and profits, but it certainly depends on the product.”

To effectively predict return volumes, Shen suggests retailers collect and crunch as much data as possible.

“The most interesting advances in managing returns will be data-driven,” he predicted. “That might include product-level data - merchants will want to get return insights by SKU, so as to anticipate and optimize their inventory mix, net of returns.”

Consumer-level data will also play a big role, according to Shen.

“Merchants will want to detect and address unusual consumer return behavior,” he said. “In short, returns management, as with advertising and promotions, will be far more strategically important for any retailer’s decision makers.”

B Stock offers access to auctions of returns, overstock and liquidation on retail marketplaces including Amazon, Costco, and Walmart. The company also provides access to online auctions of pallets, truckloads and mixed lots on retail marketplaces including Advance Auto Parts, Best Buy, J.C. Penney, and Macy’s. A full marketplace listing is available here: https://bstock.com/marketplaces/