Coresight Research has performed a deep dive into the returns problem with their new Innovator Intelligence Report: Solving Retail’s Most Expensive...
7 Retail Buzzwords That Didn’t Exist a Decade Ago
It’s no secret that the retail industry has changed dramatically in the last decade, so much so that the entire lexicon surrounding retail has flourished. If you’re feeling a little lost in the world of retail buzzwords, or if you’re feeling a bit nostalgic, we’ve written a blog covering 7 buzzwords created in the decade since the eCommerce boom and mobile commerce’s infancy. Just in time for peak season.
A type of commerce which integrates different methods of shopping available to customers, including in-store, mobile, or by phone, omnichannel is arguably the biggest buzzword on our list, having a steady increase in Google searches since 2013.
Retailers recognized that customers began to engage with a company through multiple channels (both digital and physical), therefore requiring retailers to support multiple channels of selling depending on their target consumer. Read Omnichannel Fulfillment: Lynchpin in Retail to learn more. However, as customers have shown to use multiple channels simultaneously during their shopping journeys, experts have been calling for the “upgrade” of omnichannel, instead of saying retailers should focus on unified, or harmonized, commerce.
When retailers enable customers to virtually browse and purchase merchandise that is not typically stocked or not carried solely in-store. Virtual browsing can take place via a customer’s mobile device or through an in-store kiosk. Items are then shipped to the customer’s home. Endless aisle enables stores to compete with online product assortments. As a fulfillment model, it’s similar to drop-shipping in that items are sent from a fulfillment location directly to the customer’s door. Endless Aisles are a great option in a world where customers want to shop anywhere, anytime.
One of the hot topics of NRF 2019, BOPIS enables customers to do exactly what the name says. Adweek calls it “a key part of what’s driving growth for retailers like Home Depot in the fast-fulfillment Amazon era.” Retailers like Michael’s, Home Depot, Zara, and Kohl’s have adopted the process, which enables customers to pick-up purchases from a specific store location or in pickup lockers. Retailers win because it both leverages in-store inventory and saves on shipping costs and provides an opportunity for stores to increase foot traffic and sales when customers visit the store to retrieve their purchases. Customers win via the confidence and convenience of knowing the product will be there and ready for them when they arrive.
Customers return 15-35% of all merchandise purchased (depending on product category) when engaging via the retailer’s eCommerce platform. According to eMarketer, only 25% of customers prefer to ship back their eCommerce purchases. The rest would prefer to handle the return in-store. Furthermore, customers have come to expect the ability to return in-store. In fact, 62% of shoppers are more likely to shop online if they can return an item in-store. Customers view printing return labels and going to the post office to be a cumbersome and time-consuming process. In all likelihood, customers are also motivated by a sense of urgency for a refund or exchange. Because of this, retailers have adopted omnichannel return policies to suit customer expectations.
Artificial Intelligence (AI)
Artificially Intelligent systems enable retailers to automate processes from assembly to post-sales customer experience. For more on AI, check out our blog “Demystifying Artificial Intelligence.” AI’s applied use in retail is still in its early stages, but some organizations have seen the potential to optimize aspects of their business. AI not only automates mundane tasks and performs them consistently, it allows for the processing of vast and voluminous amounts of data in real-time–Something that would be impossible for human beings to do alone.
Ok, you caught me. This isn’t a new one, but it has evolved. Wardrobing is a specific type of return fraud that stems from a customer purchasing a product, using it, and then returning the item for a full refund. In apparel, shoppers purchase and wear clothes for a night out, only to return it thereafter. In addition, driven by Influencer-culture in social media like Instagram, some shoppers buy clothes to attain likes on their #OOTD (“outfit of the day”) posts.
This phenomenon is not just clothing. We’ve heard tales of customers buying expensive televisions for a big game and returning for a full refund. Unfortunately, the product once unboxed and used loses significant resale value.
For many years, returns were just a given in retail. “The cost of doing business.” But given the significant change we’ve seen in shopping behavior due to the digital economy, customer returns behavior has also changed. Demand for fast, free, and easy returns have never been higher, and because of this, product returns have become one of the industry’s most expensive problems. But, new AI and natural language processing technology makes returns reduction possible. A returns reduction platform can help retailers achieve a reduction in returns, with all the financial benefits that come with it, by diagnosing root causes and automating workflows across silos in near-real-time, making returns reduction an attainable goal for retailers in the new decade.
If you think back to 2009, the iPhone was only in its 3rd generation, Amazon acquired Zappos for $1.2 billion, and most shoppers hadn’t even heard of bitcoin. Given the speed of technological advancements, we predict there will be no slow down with the pace of change. Retailers will live or die not only by their ability to meet their customers where they are but also by their ability to embrace the change and implement sustainable operational strategies that are cost-efficient and add money back to the bottom line. Keep those buzzwords coming.