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Driving Incremental Sales At The Point Of Return

By Peter Greene, The Retail Equation

 

Merchandise returns cost retailers more than $267 billion in lost revenues in 2013. Once considered a cost of doing business, many retailers today are rethinking the return counter to make the shopping experience better for customers, which can have big benefits to the bottom line. And now, branded manufacturers can also drive incremental sales by offering return rewards and using information about a consumer’s return transaction to instantly customize an offer for that particular person at the point of return. This provides an immediate incentive for the consumer to continue shopping at the store and for a specific product.

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In today’s retail environment, consumers are continually presented with incentives based on a web search or by simply walking down an aisle. Programs that utilize shopper insights derived from purchase and return behavior are available to cut through the clutter and influence a known category shopper while they are in the store. Branded manufacturers can now develop targeted incentive programs with customized messages and incentives to communicate directly with their consumers, or consumers of competitive brands in real-time at point-of-return and even at point-of-sale, too.  

This solution has the ability to present offers to consumers by areas within the store or by specific groups of categories, resulting in a predictable outcome designed to generate the highest return on investment. For example, when a consumer returns a coffee machine, competing manufacturers would have the ability to offer an incentive designed to entice them to switch brands, and the retailer is still able to keep the sales dollars spent in their store. Or if a consumer makes a return of a clothing item, they can be offered an incentive to purchase related items from the same brand, which helps address satisfaction issues.

These incentives are proven to drive incremental sales within the store while maximizing the budget allocated to a campaign. In retailers where this system has been utilized, purchases after a return increased nearly 60%. To put this in perspective, it is possible to achieve a 1% growth by driving an increase of dollars generated from total returns. That’s a big number and provides a significant win for both retailers and brands to keep their valued customers happy.


Greene has more than 20 years of experience in marketing and market research within the consumer durables industry. Utilizing shopper insights, Greene has assisted industry leading retailers and manufacturers achieve their marketing objectives. Prior to joining TRE, Greene was a consultant with Sharper Insights Consulting helping clients by providing critical insights into key areas such as industry trends and go-to-market strategies. His previous experience includes senior vice president for Durables Strategies at Nielsen and 17 years with the NPD Group where he served as president of the Consumer Electronics Division and also president of the Home Division.

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