Social media is changing the way people shop while also providing retailers with a means to recoup lost brick-and-mortar sales. With the rise of...
Did High Product Returns Sink These Fashion Retailers?
Filing for bankruptcy may mean survival, but avoiding it means greater control of your destiny. Bankruptcy causes a ...
Filing for bankruptcy may mean survival, but avoiding it means greater control of your destiny. Bankruptcy causes a seismic shift among your employees, customers, and suppliers. Once you’ve filed, it is never just business as usual.
Unfortunately, bankruptcy filings are also following a disturbing trend. While not a new phenomenon, the trajectory is unsettling:
- 2018 brought more than a dozen filings including Sears Holdings, David’s Bridal, Mattress Firm, Brookstone, Gumps, Rockport, Nine West, Claire’s, and Bon Ton Stores.
- 2019 saw 17 major retailers file bankruptcy, including Barneys New York, Beauty Brands, Destination Maternity, Charlotte Russe, Charming Charlie, Forever 21, Diesel USA, and Payless.
- At the halfway point of 2020, the toll already stands at 18 major retailers. This group includes the likes of Neiman Marcus, JCPenney, J. Crew, and most recently, Lucky Brand, Brooks Brothers, and New York and Company.
How does returns reduction help retailers fend off bankruptcy? More Cash!
Ecommerce drives both sales AND returns growth. The pandemic ushered in a new boom in ecommerce as shoppers fled to online shopping, and as stores re-opened, retailers recognized that store dressing rooms would need to be closed in order to ensure the safety of their customers and employees.
The result? Higher returns are threatening the very survival of fashion and apparel retailers that may have already been struggling to keep up. Prior to the pandemic, fashion and footwear return rates could average 30%, with some categories approaching 50%. This is not sustainable. Want proof? Check out this simple returns math.
The financial impact of reducing returns is a game-changer.
We took a close look at 10 of the top apparel/footwear/accessories retailers that filed bankruptcy in 2020 and the returns impact is stunning:
- An average 30% return rate on approximately $27B in aggregate revenue results in an $8B hit to the bottom line.
- Reducing the return rate by just 2 points would have added a half a billion dollars to their collective bottom lines.
- Bankruptcy is driven by multiple reasons, but keeping more cash is a solid defense.
Returns reduction is a necessity, not a luxury
Newmine’s SaaS returns reduction platform, Chief Returns Officer, holds the key to reducing returns with comprehensive returns analytics and intelligence, as well as empowering your team to take action and reduce returns in season when it matters most.
- Integrated-AI components continuously monitor your data and then transform your team into a Legion of Returns Reduction Experts
- Chief Returns Officer targets and helps you address the 65%+ of returns that boomerang for reasons that are within your control.
- Improved product and customer intelligence results in smarter selling—Your customer wants to keep your products as much as you want them to. Returns intelligence and reduction helps you achieve that.
It may just help you keep control of your destiny.